UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-27618
Date of Report (Date of earliest event reported): March 31, 1998
COLUMBUS McKINNON CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 16-0547600
------------------------------ ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
140 JOHN JAMES AUDUBON PARKWAY, AMHERST, NEW YORK 14228-1197
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 689-5400
--------------
NOT APPLICABLE
-------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>
ITEM 2. - ACQUISITION OR DISPOSITION OF ASSETS
(a) On March 11, 1998, the Registrant entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement" among the Registrant, as Buyer, and the
shareholders of LICO, Inc., as Sellers. Effective at the Closing on March 31,
1998, the Sellers sold all of the shares of LICO, Inc. to the Registrant for
$155 million less the greater of (x) the sum of $7.059 million and all costs or
expenses paid by the Registrant or any Subsidiary relating to or incurred in
connection with this Stock Purchase Agreement or (y) Funded Debt of LICO. The
acquisition was financed by the proceeds from the New Credit Agreement and the
Private Placement of 8 1/2% Senior Subordinated Notes due 2008, described in
Item 5 (a) and (b) below, respectively.
(b) LICO, through its subsidiaries, is a designer, manufacturer and installer of
custom conveyor and automated material handling systems with its primary
fabrication facility and headquarters in Kansas City, Missouri.
ITEM 5. - OTHER EVENTS
(A) NEW CREDIT AGREEMENT. On March 31, 1998, the Registrant entered into a
Credit Agreement (the "Credit Agreement") among the Registrant, as Borrower, the
banks, financial institutions and other institutional lenders named therein, as
Initial Lenders, Fleet National Bank, as the Initial Issuing Bank, Fleet
National Bank, as the Swing Line Bank, and Fleet National Bank as the
Administrative Agent. The terms of the Credit Agreement provide for a five year
revolving credit facility with initial borrowing availability of $300 million.
The proceeds of borrowings under the Credit Agreement, together with the
proceeds from the sale of the Notes described in (b) below, were used to fund
the acquisition of LICO, Inc. and repay borrowings under the Registrant's former
credit facility.
Borrowings under the Credit Agreement bear interest at a rate per annum
equal to, at the Registrant's option, either (i) the greater of (a) Fleet
National Bank's prime rate or (b) the Federal Funds Rate plus one-half of 1% or
(ii) LIBOR plus a margin (the "Applicable Margin") ranging from 0.375% to 1.25%,
depending upon the Registrant's ratio (the :"Leverage Ratio") of Funded Debt (as
defined) to EBITDA (as defined). The Registrant is also required to pay a
commitment fee at a rate per annum ranging from .125% to .275% of the total
borrowing availability under the Credit Agreement (the "Facility Fee Rate"),
determined on the basis of the Company's Leverage Ratio. Based upon the
Company's most recently determined Leverage Ratio, the Applicable Margin and
Facility Fee Rate are 1.25% and .275% respectively. The Credit Agreement
contains customary affirmative and negative covenants, including financial
covenants requiring the maintenance of specified consolidated interest coverage
and leverage ratios and amounts of consolidated net worth.
Borrowings under the Credit Agreement are secured by a first priority
security interest on all personal property of the Company and certain of its
subsidiaries, and a pledge of stock of stock of subsidiaries (limited to 65% for
foreign subsidiaries). In addition, certain subsidiaries of the Company have
jointly and severally guaranteed the obligations of the Company under the Credit
Agreement.
(B) PRIVATE PLACEMENT OF 8 1/2% SENIOR SUBORDINATED NOTES DUE 2008. On March 31,
1998, the Registrant completed the sale of $200 million principal amount of its
8 1/2% Senior Subordinated Notes due 2008 (the "Notes") in a private placement
under Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and
Rule 144A thereunder, at a purchase price of 99.734% of the face amount thereof.
The net proceeds from the sale of the Notes, together with borrowings under the
Registrant's new credit facility described in (a) above, were used to fund the
acquisition of LICO, Inc. and repay borrowings under the Registrant's former
credit facility. The Notes bear interest at the rate of 8 1/2% per annum,
payable semi-annually, and will mature on April 1, 2008. Upon a change of
Control (as defined) of the Registrant, holders of the Notes will have the
right, subject to certain restrictions and conditions, to require the Registrant
to purchase all or any of their Notes at 101% of the principal amount thereof
plus accrued interest thereon. The Notes are general unsecured obligations of
the Registrant and are subordinated in right of payment to all existing and
future Senior Debt (as defined) of the Registrant. The Notes are guaranteed on a
senior subordinated basis by certain of the Registrant's existing and future
subsidiaries (the "Guarantors"). The Indenture pursuant to which the Notes were
issued contains various restrictive covenants, including covenants restricting
the payment of dividends, the repurchase of capital stock and the making of
certain other Restricted Payments
(2)
<PAGE>
(as defined), the incurrence of additional indebtedness, the incurrence of
certain liens and certain mergers, consolidations or sales of assets. Pursuant
to a registration rights agreement relating to the Notes, the Registrant has
agreed to make an offer to exchange the Notes (the "Exchange Offer") for a new
issue of debt securities registered under the Act with terms substantially
identical to those of the Notes. The Registrant will become obligated to pay
specified amounts of liquidated damages to holders of the Notes if the Exchange
Offer is not filed, commenced or consummated by specified dates.
The foregoing summary of the terms of the Notes does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the provisions of the Notes and the Indenture, dated March 31, 1998, among the
Registrant, the Guarantors and State Street Bank and Trust Company, N.A., as
Trustee, pursuant to which the Notes were issued, a copy of which (with the form
of Note certificate) is filed as Exhibit 4.1 to this Current Report.
Pursuant to Rule 135c under the Act, copies of the press releases issued by
the Registrant on March 11, 1998 and March 31, 1998 relating to the offering and
sale of the Notes are filed as Exhibits 99.1 and 99.2, respectively, to this
Current Report.
ITEM 7. - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(3)
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
LICO, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheet of LICO, Inc.
and Subsidiaries (the Company) as of September 30, 1997, and the related
consolidated statements of income, shareholders' equity and cash flows for the
year then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
LICO, Inc. and Subsidiaries at September 30, 1997, and the consolidated results
of their operations and their cash flows for the year then ended in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Kansas City, Missouri
November 21, 1997,
except for Note 11, as to which the date
is February 13, 1998
(4)
<PAGE>
LICO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
ASSETS
Current assets:
Cash.................................................. $ 959,686
Accounts receivable, net, including retainages
of $4,997,093 in 1997............................... 25,992,204
Revenues earned in excess of billings
on uncompleted contracts............................ 13,475,892
Raw materials inventory............................... 3,449,061
Prepaid expenses...................................... 56,159
Deferred income taxes................................. 246,915
----------
Total current assets............................. 44,179,917
Property, plant and equipment, at cost:
Land and buildings.................................... 7,010,020
Machinery and equipment............................... 3,344,080
Office furniture and fixtures......................... 1,709,260
----------
12,063,360
Less accumulated depreciation and amortization (3,029,380)
----------
9,033,980
Cash surrender value of officers' life insurance...... 1,015,331
Deferred income taxes................................. 353,166
Other assets.......................................... 76,000
----------
1,444,497
----------
Total assets..................................... $54,658,394
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable......................................... $ 7,500,000
Current portion of capital leases..................... 90,159
Current portion of long-term debt..................... 517,849
Accounts payable...................................... 17,514,795
Billings in excess of revenues earned on uncompleted
contracts.......................................... 1,867,031
Payroll taxes and fringe benefits accrued
and withheld....................................... 1,141,014
Income taxes payable.................................. 399,711
Accrued compensation and other expenses............... 2,782,187
----------
Total current liabilities........................ 31,812,746
Long-term debt, less current portion....................... 4,248,919
Accrued retirement benefits................................ 872,878
Capital lease obligations, less current portion 102,706
----------
Total liabilities.......................................... 37,037,249
Shareholders' equity:
Preferred stock, $.10 par value:
Authorized shares - 200,000, none issued........... -
Common stock, voting, $.10 par value:
Authorized shares - 300,000
Issued shares - 256,250............................ 25,625
Common stock, nonvoting, $.10 par value:
Authorized shares - 2,700,000
Issued and outstanding shares - 2,306,250.......... 230,625
Additional paid-in capital............................ 119,621
Retained earnings..................................... 17,380,778
Treasury stock, at cost, 2,400 shares................. (135,504)
----------
Total shareholders' equity....................... 17,621,145
----------
Total liabilities and shareholders' equity....... $54,658,394
==========
See accompanying notes.
(5)
<PAGE>
LICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED SEPTEMBER 30, 1997
Contract revenues..................................... $126,551,381
Contract costs:
Direct costs..................................... 102,812,871
Indirect costs:
Fabrication................................. 1,773,540
Field....................................... 448,144
Engineering................................. 1,526,269
Other....................................... 162,934
-----------
106,723,758
Income from contracts................................. 19,827,623
Selling, general and administrative expenses.......... 11,841,477
Litigation costs...................................... 1,127,600
-----------
Income from operations................................ 6,858,546
Interest expense...................................... (1,396,331)
Other income.......................................... 60,223
-----------
Income before income taxes............................ 5,522,438
Income tax provision.................................. (1,705,009)
-----------
Net income............................................ $ 3,817,429
===========
See accompanying notes.
(6)
<PAGE>
<TABLE>
<CAPTION>
LICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
YEAR ENDED SEPTEMBER 30, 1997
Voting Nonvoting Additional Total
Common Common Paid-In Retained Treasury Shareholders'
Stock Stock Capital Earnings Stock Equity
------ --------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1996........... $25,625 $ - $119,621 $13,793,974 $ (16,444) $13,922,776
Purchase of 2,000 shares of voting
common stock......................... - - - - (119,060) (119,060)
Issuance of 2,306,250 shares of non-
voting common stock.................. - 230,625 - (230,625) - -
Net income.............................. - - - 3,817,429 - 3,817,429
--------------------------------------------------------------------
Balance at September 30, 1997........... $25,625 $230,625 $119,621 $17,380,778 $(135,504) $17,621,145
====================================================================
See accompanying notes.
(7)
</TABLE>
<PAGE>
LICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1997
OPERATING ACTIVITIES
Net income............................................... $ 3,817,429
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization....................... 847,394
Deferred income taxes............................... 760,271
Changes in assets and liabilities:
Accounts receivable............................ 14,985,364
Revenues earned in excess of billings on
uncompleted contracts....................... (8,399,723)
Refundable income taxes........................ 542,678
Raw materials inventory........................ 743,371
Prepaid expenses............................... (1,600)
Accounts payable............................... 1,086,927
Billings in excess of revenues
earned on uncompleted contracts............. (1,069,984)
Income taxes payable........................... 399,711
Accrued expenses............................... (3,797,618)
Accrued retirement benefits.................... 113,623
----------
Net cash provided by operating activities 10,027,843
INVESTING ACTIVITIES
Capital expenditures..................................... (7,547,079)
Increase in cash surrender value of officers'
life insurance...................................... (121,067)
----------
Net cash used in investing activities.................... (7,668,146)
FINANCING ACTIVITIES
Net repayments under line-of-credit agreement (6,650,000)
Proceeds from issuance of long-term debt................. 5,050,000
Principal payments on long-term debt
and capital lease obligations......................... (364,587)
Purchase of common stock for treasury.................... (119,060)
----------
Net cash used in financing activities.................... (2,083,647)
----------
Net increase in cash..................................... 276,050
Cash at beginning of year................................ 683,636
----------
Cash at end of year...................................... $ 959,686
==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest............................................ $1,328,110
==========
Income taxes........................................ $ 184,186
==========
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES
Additions to property, plant and equipment through
issuance of capital lease obligations................. $ 117,083
==========
Issuance of nonvoting common stock....................... $ 230,625
==========
See accompanying notes.
(8)
<PAGE>
LICO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of LICO, Inc.
(the Company) and its wholly-owned subsidiaries, LICO Steel, Inc. (LSI), LICO
Conveyor Company (LCC), Automatic Systems Conveyors Limited (ASCL), ASI of
Australia Pty. Ltd. (ASIA), and Automatic Systems, Inc. (ASI), including ASI's
wholly-owned subsidiary, LICO International Corporation (LIC). All significant
intercompany transactions are eliminated.
EARNINGS ON CONTRACTS
ASI, including LIC, is engaged principally in the manufacture and
installation of industrial conveyor systems and other materials handling
products under fixed-price contracts. ASIA is engaged in negotiating customer
contracts on a fixed-price basis of contracting for the installation of products
principally manufactured by ASI in Australia. ASCL acts as a sales agent for ASI
in Canada and is reimbursed for expenses on a cost plus basis. LSI is engaged in
steel erection and general contracting under fixed-price and time and material
contracts. LCC is engaged in the manufacture and installation of portable and
stationary belt conveyors under fixed-price contracts. Contract revenues are
recognized under the percentage of completion method, measured by comparing
direct costs incurred to total estimated direct costs.
Changes in job performance, job conditions and estimated profitability,
including those arising from final contract settlements, may result in revisions
to costs and income and are recognized in the period in which the revisions are
determined. In the event that a loss is anticipated on an uncompleted contract,
a provision for the estimated loss is made at the time it is determined.
Billings on contracts may precede or lag revenues earned, and such
differences are reported in the balance sheet as current liabilities and current
assets, respectively.
INVENTORY
Steel inventory is stated at the lower of cost, determined using the average
cost method, or market. All other inventory is stated at the lower of cost,
using the first-in, first-out method, or market.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. When properties are
retired or otherwise disposed of, the related cost and accumulated depreciation
are removed from the respective accounts and any gain or loss is credited or
charged to income. Maintenance and repairs are charged to expense in the year
incurred, and additions, improvements and betterments are capitalized.
Depreciation and amortization of property and equipment is computed over the
estimated useful lives of the assets using the straight-line method for assets
purchased prior to 1992 and an accelerated method for assets purchased
thereafter. The depreciation and amortization periods range from three to 39
years.
(9)
<PAGE>
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes."
Under SFAS No. 109, the liability method is used in accounting for income taxes,
whereby deferred tax assets and liabilities are determined based on the
differences between financial reporting and tax bases of assets and liabilities
and are measured using enacted tax rates and laws that will be in effect when
the differences are expected to reverse.
The Company files a consolidated federal income tax return with ASI, LSI and
LCC. LIC, ASCL and ASIA file separate returns.
USE OF ESTIMATES
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.
2. REVENUES AND BILLINGS ON UNCOMPLETED CONTRACTS
At September 30, 1997 revenues and billings on uncompleted contracts
consisted of:
Costs incurred on uncompleted contracts..... $138,821,673
Estimated earnings.......................... 24,467,281
-----------
Revenues earned to date..................... 163,288,954
Less billings to date....................... 151,680,093
-----------
$ 11,608,861
===========
Such amounts are included in the accompanying consolidated balance sheets
under the following captions at September 30, 1997:
Revenues earned in excess of billings
on uncompleted contracts................ $ 13,475,892
Billings in excess of revenues earned
on uncompleted contracts................ (1,867,031)
-----------
$ 11,608,861
===========
3. NOTES PAYABLE AND LONG-TERM DEBT
The short-term bank note represents the balance due on demand under a
$22,000,000 revolving line of credit which bears interest at the prime rate
(8.5% at September 30, 1997). The credit line is collateralized by accounts
receivable and inventory and is partially guaranteed by certain shareholders of
the Company.
Long-term debt at September 30, 1997 consists of the following:
Real estate note, interest at 8.85%, collateralized
by real estate, maturing November 2006........... $2,426,805
Equipment note, interest at 8.25%, collateralized
by equipment, maturing March 2004................ 1,537,354
Equipment note, interest at 8.15%, collateralized
by equipment, maturing March 2002................ 802,609
---------
4,766,768
Less current maturities.............................. 517,849
---------
$4,248,919
=========
(10)
<PAGE>
LICO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The aggregated principal amounts of long-term debt maturing in each of the
next five years ending September 30 and thereafter:
1998...................................... $ 517,849
1999...................................... 563,210
2000...................................... 612,550
2001...................................... 666,219
2002...................................... 615,938
Thereafter.............................. $1,791,002
---------
$4,766,768
=========
4. LEASES
The amounts of manufacturing equipment under capital lease obligations
included in property, plant and equipment at September 30, 1997 are as follows:
Cost of assets held under capital leases $405,672
Accumulated amortization................... (196,057)
-------
Net assets held under capital leases $209,615
=======
LICO, Inc. also leases offices and operating facilities, machinery and
equipment, and automobiles under operating leases expiring through July 2001.
Rental payments amounted to $1,930,143 for 1997. Certain property and equipment
was purchased from a partnership owned by certain of the Company's shareholders
during 1997 for $6,350,811, its approximate fair value, and recorded as an
addition to property and equipment for that amount.
Future minimum lease payments under the capital leases and noncancelable
operating leases for the next four years ending September 30 are as follows:
Capital Operating
FISCAL YEARS ENDING Leases Leases
------- ---------
1998.......................................... $ 92,339 $118,835
1999.......................................... 71,106 56,589
2000.......................................... 46,189 14,205
2001.......................................... 8,404 7,750
------- -------
Total minimum lease payments.................. 218,038 $197,379
=======
Less amounts representing interest 25,173
-------
Present value of net minimum lease payments 192,865
Less current portion.......................... 90,159
-------
$102,706
=======
(11)
<PAGE>
LICO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. These items consist
principally of research and experimentation credits, accrued liabilities,
accrued bonuses, accrued retirement benefits and basis differences in accounts
receivable. The components of the Company's net deferred tax assets and
liabilities at September 30, 1997 are as follows:
Total net deferred assets.......... $600,081
Less current portion............... 246,915
-------
Net noncurrent deferred assets..... $353,166
=======
The income tax provision (benefit) for 1997 consists of the following:
Current:
Federal........................ $ 651,870
State.......................... 282,868
Foreign........................ (10,000)
---------
Total current....................... 944,738
Deferred:
Federal........................ 635,715
State.......................... 124,556
---------
Total deferred...................... 760,271
---------
Total provision for income taxes.... $1,705,009
=========
A reconciliation of the income tax provision to the amounts computed at the
federal statutory rate is as follows:
Provision at statutory rate.................. $1,932,853
State income taxes, net of federal benefit... 180,000
Federal income tax credits................... (560,000)
Other, net................................... 152,156
---------
Net tax provision............................ $1,705,009
=========
At September 30, 1997, the Company has unused research and experimentation
credits of approximately $400,000 for income tax purposes which may be used to
offset future taxable income through the fiscal year ended September 30, 2007.
The Company believes it is more likely than not that the research and
experimentation credits will be utilized prior to their expiration and,
accordingly, has not provided a valuation allowance to reduce the carrying value
of deferred tax assets.
(12)
<PAGE>
LICO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. SHAREHOLDERS' EQUITY
In September 1997, the Company amended its Articles of Incorporation to
create two classes of common stock designated as Voting Common Stock and
Nonvoting Common Stock. In effect, all existing voting common stock shareholders
were issued nine shares of the newly created Nonvoting Common Stock for every
share of Voting Common Stock owned. Each holder of Voting Common Stock shall be
entitled to one vote for each share of voting stock owned. Holders of Nonvoting
Common Stock shall have no voting rights. Except for voting rights, both classes
of common stock share the same preferences, qualifications, limitations,
restrictions, special rights and general rights.
7. COMMITMENTS AND RELATED-PARTY TRANSACTIONS
STOCK REDEMPTION AGREEMENT
The Company's stock is principally owned by two individuals (major
shareholders) accounting for approximately 80% of the outstanding voting and
nonvoting common stock. Upon the death of any minority shareholder, the Company
will purchase all of the shareholder's shares at the greater of $10 per share or
the book value of such shares. Similarly, upon disability, retirement or
termination without cause of any minority shareholder, the Company may purchase
the shares at book value. The two majority shareholders have entered into a
separate cross purchase agreement to purchase each others stock in the event of
a death of either major shareholder.
RECEIVABLES
Included in accounts receivable at September 30, 1997, is advances of
$42,335 to certain officers and employees.
8. EMPLOYEE BENEFIT PLANS
The Company provides a defined contribution 401(k) plan for all employees
not covered by union-sponsored plans. Under the plan, employees may elect to
contribute a percentage of their annual salary subject to Internal Revenue Code
maximum limitations. Regular accruals are recorded by the Company in amounts up
to one half of the employees' contributions but not exceeding a maximum of 3% of
the employees' base compensation. The Company's contribution for 1997 was
$160,193.
In addition, the Company has an agreement with certain officers under which
the Company is obligated to pay specified amounts upon retirement or lesser
amounts if termination occurs prior to age 60. The Company has acquired certain
life insurance policies that will accumulate cash value to fund this plan. The
Company's liability under this plan is recorded at its present value (assuming a
7.5% interest rate) and presented in the balance sheet as accrued retirement
benefits.
The Company also participates in various multiemployer, union-administered
pension plans that principally cover production workers. Union compensation
arrangements provide a stipulated amount per hour for fringe benefits including
pension benefits. The Company recognizes as an expense the required contribution
for all such fringe benefits, and any amounts due and unpaid are included in
current liabilities. The portion of the total fringe benefits related to pension
benefits has not been separately determined.
9. SIGNIFICANT GROUP CONCENTRATION OF CREDIT RISK
At September 30, 1997, substantially all of the Company's receivables are
obligations of automotive manufacturers. The Company generally does not require
collateral or other security on the accounts. The credit risk is controlled
through credit approvals, limits and monitoring procedures.
(13)
<PAGE>
LICO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The accounts receivable, including retainage, at September 30, 1997 from
these major customers are as follows:
General Motors................................. $11,476,393
Ford........................................... 5,494,280
Lesco Design and Manufacturing Company
(contractor to Ford)....................... 2,086,529
----------
$19,057,202
==========
Sales to two customers accounted for 52% and 26%, respectively, of contract
revenues in 1997.
10. LITIGATION
During 1997, ASI settled a dispute with a subcontractor regarding breach of
contract. The settlement and related legal fees resulted in a charge to income
from operations of approximately $1,127,600 in excess of amounts accrued in
prior years.
11. SUBSEQUENT EVENTS
Effective February 13, 1998, the Company signed a letter of intent whereby
it agreed to sell all of its outstanding voting and nonvoting common stock to
Columbus McKinnon Corporation for approximately $155 million less the amount of
funded debt existing at closing. This transaction is subject to customary
closing conditions.
(14)
<PAGE>
(b) Pro Forma Financial Statements
The pro forma consolidated balance sheet as of December 28, 1997 and the pro
forma consolidated statements of income for the nine months ended December 28,
1997 and the fiscal year ended March 31, 1997 have been prepared to reflect (i)
the consummation of the Offering and the application of the estimated net
proceeds therefrom, (ii) the consummation of the LICO Acquisition, and (iii) the
revisions to the Company's credit facilities. The pro forma balance sheet was
prepared as if such transactions had occurred on December 28, 1997. The pro
forma statements of income were prepared as if such transactions had occurred at
the beginning of the periods reflected thereon. In addition, the pro forma
statement of income for the year ended March 31, 1997 was prepared as if the
acquisitions of Yale and Lister had occurred at the beginning of that year. The
pro forma consolidated financial information is based on the historical
financial statements of the Company and LICO and should be read in conjunction
with those financial statements and notes thereto. The consolidated pro forma
financial information is not necessarily indicative of the financial position or
results of operations which actually would have occurred if such transactions
had been consummated on the dates described, nor does it purport to represent
the Company's future financial position or results of operations.
(15)
<PAGE>
<TABLE>
<CAPTION>
COLUMBUS MCKINNON CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
DECEMBER 28, 1997
Refinancing and
Columbus Acquisition Offering Pro Forma
McKinnon(1) LICO(2) Adjustments Pro Forma Adjustments As Adjusted
----------- ------- ----------- --------- ----------- -----------
(Dollars in thousands)
ASSETS:
Current assets:
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents....... $ 5,883 $ 1,278 $ 7,161 $ 7,161
Trade accounts receivable....... 79,726 46,889 126,615 126,615
Unbilled revenues............... - 16,189 16,189 16,189
Inventories..................... 95,999 3,541 99,540 99,540
Net assets held for sale........ 10,302 - 10,302 10,302
Prepaid expenses................ 6,877 707 7,584 7,584
------- ------ ------- ------- ------- -------
Total current assets................. 198,787 68,604 267,391 267,391
Net property, plant & equipment...... 63,489 9,059 72,548 72,548
Goodwill & other intangibles,
net............................... 241,687 - 450 (3) 356,299 3,848 (7) 352,822
114,162 (4) (7,325)(8)
Marketable securities................ 16,293 - 16,293 16,293
Deferred taxes on income 9,196 353 9,549 9,549
Other assets......................... 5,573 1,463 7,036 7,036
------- ------ ------- ------- ------- -------
Total assets......................... $ 535,025 $ 79,479 $ 114,612 $ 729,116 $ (3,477) $ 725,639
======= ====== ======= ======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Notes payable to banks.......... $ 445 $ 15,500 $ (15,500)(5) $ 445 $ 445
Trade accounts payable 21,426 23,979 45,405 45,405
Excess billings................. - 6,713 6,713 6,713
Accrued liabilities............. 41,956 6,795 48,751 (2,930) (8) 45,821
Current portion-long-term debt.. 22,504 625 (625)(5) 22,504 (21,000) (9) 1,504
------- ------ ------- ------- ------- -------
Total current liabilities 86,331 53,612 (16,125) 123,818 (23,930) 99,888
Long-term debt, less current
portion........................... 246,016 4,183 151,517 (5) 401,716 (195,620)(10) 227,096
21,000 (9)
Senior subordinated debt............. - - - 199,468 (10) 199,468
Other non-current liabilities........ 39,068 904 39,972 39,972
------- ------ ------- ------- ------- -------
Total liabilities.................... 371,415 58,699 135,392 565,506 918 566,424
Shareholders' equity:
Common stock.................... 137 256 (256)(6) 137 137
Additional paid-in capital...... 96,024 120 (120)(6) 96,024 96,024
Retained earnings............... 73,743 20,539 (20,539)(6) 73,743 (4,395) (8) 69,348
ESOP debt guarantee............. (3,539) - (3,539) (3,539)
Other........................... (2,755) (135) 135 (6) (2,755) (2,755)
------- ------ ------- ------- ------- -------
Total shareholders' equity........... 163,610 20,780 (20,780) 163,610 (4,395) 159,215
------- ------ ------- ------- ------- -------
Total liabilities and shareholders'
equity............................ $ 535,025 $ 79,479 $ 114,612 $ 729,116 $ (3,477) $ 725,639
======= ====== ======= ======= ======= =======
(footnotes on following page)
(16)
<PAGE>
<FN>
(1) Represents the Company's consolidated balance sheet as of December 28, 1997.
(2) Represents LICO's consolidated balance sheet as of December 31, 1997.
(3) Represents deferred financing fees on bank debt required for acquisition of
LICO by the Company.
(4) Represents goodwill in the amount of the LICO acquisition price in excess of
the market value of the assets and liabilities acquired.
(5) Represents debt required for the LICO Acquisition by the Company and
refinancing of LICO's debt, based on a purchase price of $155.0 million plus
acquisition costs and financing fees, and including assumed debt.
(6) Represents the elimination of LICO equity upon LICO's acquisition by the
Company in accordance with purchase accounting principles.
(7) Represents deferred financing fees incurred in connection with the Offering,
net of deferred gain realized on Offering hedge.
(8) Represents the write-off of existing deferred financing fees upon
replacement of the existing credit facilities with the New Credit Agreement
and the related reduction in taxes payable.
(9) Represents the reclassification of the current portion of long-term bank
debt to non-current debt under the New Credit Agreement.
(10)Represents the refinancing of bank debt with the proceeds from the Offering,
net of $3.85 million of expenses and realized hedge gain, and $0.5 million
of original issue discount.
</FN>
</TABLE>
(17)
<PAGE>
<TABLE>
<CAPTION>
COLUMBUS MCKINNON CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
NINE MONTHS ENDED DECEMBER 28, 1997
Refinancing and Pro
Columbus Acquisition Offering Forma
McKinnon(1) LICO(2) Adjustments Pro Forma Adjustments As Adjusted
----------- ------- ----------- --------- ----------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Net sales............................... $372,442 $117,948 $490,390 $ 490,390
Cost of products sold................... 265,990 98,664 364,654 364,654
------- ------- ------- -------
Gross profit............................ 106,452 19,284 125,736 125,736
Selling, general & administrative
expenses.......................... 51,445 9,830 (2,278)(3) 58,997 58,997
Amortization of intangibles............. 7,581 - 3,425 (4) 11,006 11,006
------- ------- ----- ------- -------
59,026 9,830 1,147 70,003 70,003
------- ------- ----- ------- -------
Income from operations.................. 47,426 9,454 (1,147) 55,733 55,733
Interest and debt expense............... 17,729 1,150 7,152 (5) 26,031 (820)(7) 25,211
Interest and other income............... 1,076 56 1,132 1,132
------- ------- ----- ------- ---- -------
Income before income taxes,
Minority interest and extraordinary
charge.............................. 30,773 8,360 (8,299) 30,834 820 31,654
Income tax expense...................... 15,227 2,657 (1,950)(6) 15,934 328 (8) 16,262
------- ------- ----- ------- ---- -------
Income before minority interest and
Extraordinary charge.................... $ 15,546 $ 5,703 $(6,349) $ 14,900 $ 492 $ 15,392
======= ======= ===== ======= ==== =======
EBITDA(9)............................... $ 62,746 $ 10,116 $ 2,278 $ 75,140 $ - $ 75,140
======= ======= ===== ======= ==== =======
<FN>
(1) Represents the Company's consolidated results of operations for the nine
months ended December 28, 1997.
(2) Represents LICO's consolidated results of operations for the nine-month
period ended December 31, 1997.
(3) Represents the portion of LICO owners' compensation expenses which will be
eliminated upon acquisition by Columbus McKinnon.
(4) Represents amortization of goodwill which will result from the acquisition
of LICO by Columbus McKinnon.
(5) Represents the incremental interest and debt expense to finance the
acquisition of LICO by Columbus McKinnon.
(6) Represents the tax effect of LICO pro forma adjustments to selling, general
and administrative expenses and interest and debt expense in items (3) and
(5) above.
(7) Represents the net savings in interest and debt expense resulting from the
effect of the New Credit Agreement at 6.875% and the Offering at 8.50%.
(8) Represents the tax effect of interest and debt expense pro forma adjustment
per (7) above.
(9) EBITDA represents income before interest and debt expense, income tax
expense, depreciation and amortization, minority interest, extraordinary
charge and cumulative effect of accounting change. EBITDA is presented
because it provides useful information regarding the Company's ability to
service and/or incur debt. EBITDA should not be considered in isolation from
or as a substitute for net income, cash flows from operating activities or
other consolidated income or cash flow statement data prepared in accordance
with generally accepted accounting principles or as a measure of
profitability or liquidity.
</FN>
</TABLE>
(18)
<PAGE>
<TABLE>
<CAPTION>
COLUMBUS MCKINNON CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED MARCH 31, 1997
Yale & Lister Refinancing and
Columbus Preacquisition Combined Acquisition Offering Pro Forma
McKinnon(1) Pro Forma(2) Pro Forma LICO(3) Adjustments Pro Forma Adjustments As Adjusted
---------- ----------- --------- ------ ----------- --------- ----------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales....................$359,424 $110,901 $470,325 $134,168 $604,493 $604,493
Cost of products sold........ 251,987 78,405 330,392 121,867 452,259 452,259
------- ------- ------- ------- ------- -------
Gross profit................. 107,437 32,496 139,933 12,301 152,234 152,234
Selling, general &
administrative expenses.... 57,186 17,718 74,904 9,819 (1,892)(4) 82,831 82,831
Amortization of intangibles.. 5,197 4,970 10,167 - 4,566 (5) 14,733 14,733
------- ------- ------- ------- ------ ------- -------
62,383 22,688 85,071 9,819 2,674 97,564 97,564
------- ------- ------- ------- ------ ------- -------
Income from operations....... 45,054 9,808 54,862 2,482 (2,674) 54,670 54,670
Interest and debt expense.... 11,930 12,967 24,897 916 9,947 (6) 35,760 (1,261)(8) 34,499
Interest and other income.... 1,168 - 1,168 75 1,243 1,243
------- ------- ------- ------- ------ ------- ------ -------
Income before income taxes,
minority interest and ex-
traordinary charge......... 34,292 (3,159) 31,133 1,641 (12,621) 20,153 1,261 21,414
Income tax expense........... 15,617 903 16,520 65 (3,222)(7) 13,363 504 (9) 13,867
------- ------- ------- ------- ------ ------- ------ -------
Income before minority
interest and extraordinary
charge.....................$ 18,675 $ (4,062) $ 14,613 $ 1,576 $ (9,399) $ 6,790 $ 757 $ 7,547
======= ======= ======== ======= ====== ======= ====== =======
EBITDA(10)...................$ 57,507 $ 16,727 $ 74,234 $ 3,209 $ 1,892 $ 79,355 $ - $ 79,335
======= ======= ======== ======= ====== ======= ====== =======
<FN>
(1) Represents the Company's consolidated results of operations for the fiscal
year ended March 31, 1997, including Yale and Lister since their acquisition
by the Company on October 17, 1996 and December 19, 1996, respectively.
(2) Represents Yale's and Lister's consolidated results of continuing operations
from April 1, 1996 through their date of acquisition by Columbus McKinnon on
October 17, 1996 and December 19, 1996, respectively, along with the effects
of acquisition. Those pro forma effects include the following: (a) $2.5
million reduction of selling, general and administrative expenses for
elimination of Yale corporate offices and other administrative expenses; (b)
$4.1 million of additional goodwill amortization expense; (c) $8.4 million
incremental interest and debt expense to finance the acquisitions; and (d)
$2.4 million reduction in income tax expense resulting from items (a) and
(c) above.
(3) Represents LICO's consolidated results of operations for the twelve-month
period ended March 31, 1997.
(4) Represents the portion of LICO owners' compensation expenses which will be
eliminated upon acquisition by Columbus McKinnon.
(5) Represents amortization of goodwill which will result from the acquisition
of LICO by Columbus McKinnon.
(6) Represents the incremental interest and debt expense to finance the
acquisition of LICO by Columbus McKinnon.
(7) Represents the tax effect of LICO pro forma adjustments to selling, general
and administrative expenses and interest and debt expense in items (4) and
(6) above.
(8) Represents the net savings in interest and debt expense resulting from the
effect of the New Credit Agreement at 6.875% and the Offering at 8.50%.
(9) Represents the tax effect of interest and debt expense pro forma adjustment
per (8) above.
(10)EBITDA represents income before interest and debt expense, income tax
expense, depreciation and amortization, minority interest, extraordinary
charge and cumulative effect of accounting change. EBITDA is presented
because it provides useful information regarding the Company's ability to
service and/or incur debt. EBITDA should not be considered in isolation from
or as a substitute for net income, cash flows from operating activities or
other consolidated income or cash flow statement data prepared in accordance
with generally accepted accounting principles or as a measure of
profitability or liquidity.
</FN>
</TABLE>
(19)
<PAGE>
(c) Exhibits:
4.1 Conformed copy of the Indenture, dated as of March 31, 1998, among
Columbus McKinnon Corporation, the Guarantors named on the signature
pages thereto and State Street Bank and Trust Company, N.A., as Trustee,
including the form of Senior Subordinated Notes due 2008.
4.2 A/B Exchange Registration Rights Agreement dated as of March 31, 1998 by
and among Columbus McKinnon Corporation, the Guarantors named on the
signature pages thereto and Bear, Stearns & Co. Inc. and Goldman, Sachs
& Co.
4.3 Supplemental Indenture dated as of March 31, 1998, among LICO, Inc.,
Automatic Systems, Inc., LICO Steel Inc., Columbus McKinnon Corporation
the other Guarantors and State Street Bank and Trust Company, N.A., as
trustee.
10.1 Stock Purchase Agreement dated as of March 11, 1998 among Columbus
McKinnon Corporation, as Buyer, and the shareholders of LICO, Inc., as
Sellers.
10.2 Credit Agreement dated as of March 31, 1998 among Columbus McKinnon
Corporation, as Borrower, the banks, financial institutions and other
institutional lenders named therein as Initial Lenders, Fleet National
Bank, as the Initial Issuing Bank, Fleet National Bank, as the Swing
Line Bank and Fleet National Bank, as the Administrative Agent.
23.1 Consent of Ernst & Young LLP as Independent Auditors of LICO, Inc.
99.1 Text of Registrant's press release dated March 11, 1998 (incorporated
by reference to Exhibit 99 to the Registrant's Current Report on Form
8-K dated March 11, 1998 and filed on March 23, 1998).
99.2 Text of Registrant's press release dated March 31, 1998.
(20)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COLUMBUS McKINNON CORPORATION
Dated: April 9, 1998 By: /s/ Robert L. Montgomery
------------- ------------------------
Executive Vice President and
Chief Financial Officer
(21)
COLUMBUS MCKINNON CORPORATION
SERIES A AND SERIES B
8 1/2% SENIOR SUBORDINATED NOTES DUE 2008
INDENTURE
----------------------------
Dated as of March 31, 1998
----------------------------
STATE STREET BANK AND TRUST COMPANY, N.A.
Trustee
-----------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.........................2
SECTION 1.01. DEFINITIONS..................................................2
SECTION 1.02. OTHER DEFINITIONS...........................................19
SECTION 1.03..............................................................19
SECTION 1.04. RULES OF CONSTRUCTION.......................................20
ARTICLE 2. THE NOTES.........................................................20
SECTION 2.01. FORM AND DATING.............................................20
SECTION 2.02. EXECUTION AND AUTHENTICATION................................22
SECTION 2.03. REGISTRAR AND PAYING AGENT..................................22
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.........................23
SECTION 2.05. HOLDER LISTS................................................23
SECTION 2.06. TRANSFER AND EXCHANGE.......................................23
SECTION 2.07. REPLACEMENT NOTES...........................................36
SECTION 2.08. OUTSTANDING NOTES...........................................36
SECTION 2.09. TREASURY NOTES..............................................37
SECTION 2.10. TEMPORARY NOTES.............................................37
SECTION 2.11. CANCELLATION................................................37
SECTION 2.12. DEFAULTED INTEREST..........................................37
ARTICLE 3. REDEMPTION AND PREPAYMENT.........................................38
SECTION 3.01. NOTICES TO TRUSTEE..........................................38
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED...........................38
SECTION 3.03. NOTICE OF REDEMPTION........................................38
i
<PAGE>
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION..............................39
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.................................39
SECTION 3.06. NOTES REDEEMED IN PART......................................40
SECTION 3.07. OPTIONAL REDEMPTION.........................................40
SECTION 3.08. MANDATORY REDEMPTION........................................41
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.........41
ARTICLE 4. COVENANTS.........................................................43
SECTION 4.01. PAYMENT OF NOTES............................................43
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.............................43
SECTION 4.03. REPORTS.....................................................44
SECTION 4.04. COMPLIANCE CERTIFICATE......................................44
SECTION 4.05. TAXES.......................................................45
SECTION 4.06. STAY, EXTENSION AND USURY LAWS..............................45
SECTION 4.07. RESTRICTED PAYMENTS.........................................45
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.............................................48
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK..49
SECTION 4.10. ASSET SALES.................................................50
SECTION 4.11. TRANSACTIONS WITH AFFILIATES................................51
SECTION 4.12. LIENS.......................................................52
SECTION 4.13. ADDITIONAL SUBSIDIARY GUARANTEES............................52
SECTION 4.14. CORPORATE EXISTENCE.........................................52
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL..................53
SECTION 4.16. NO SENIOR SUBORDINATED DEBT.................................54
SECTION 4.17. PAYMENTS FOR CONSENT........................................54
ARTICLE 5. SUCCESSORS........................................................55
ii
<PAGE>
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS....................55
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED...........................55
ARTICLE 6. DEFAULTS AND REMEDIES.............................................56
SECTION 6.01. EVENTS OF DEFAULT...........................................56
SECTION 6.02. ACCELERATION................................................57
SECTION 6.03. OTHER REMEDIES..............................................58
SECTION 6.04. WAIVER OF PAST DEFAULTS.....................................58
SECTION 6.05. CONTROL BY MAJORITY.........................................59
SECTION 6.06. LIMITATION ON SUITS.........................................59
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT...............60
SECTION 6.08. COLLECTION SUIT BY TRUSTEE..................................60
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM............................60
SECTION 6.10. PRIORITIES..................................................61
SECTION 6.11. UNDERTAKING FOR COSTS.......................................61
ARTICLE 7. TRUSTEE...........................................................61
SECTION 7.01. DUTIES OF TRUSTEE...........................................61
SECTION 7.02. RIGHTS OF TRUSTEE...........................................62
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE................................63
SECTION 7.04. TRUSTEE'S DISCLAIMER........................................63
SECTION 7.05. NOTICE OF DEFAULTS..........................................63
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES..................64
SECTION 7.07. COMPENSATION AND INDEMNITY..................................64
SECTION 7.08. REPLACEMENT OF TRUSTEE......................................65
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC............................66
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION...............................66
iii
<PAGE>
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...........67
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE..........................67
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE....67
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE..............................67
SECTION 8.03. COVENANT DEFEASANCE.........................................67
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE..................68
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS............69
SECTION 8.06. REPAYMENT TO COMPANY........................................70
SECTION 8.07. REINSTATEMENT...............................................70
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER..................................71
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.........................71
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES............................71
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.........................73
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS...........................73
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES............................73
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.............................74
ARTICLE 10. SUBORDINATION....................................................74
SECTION 10.01. AGREEMENT TO SUBORDINATE...................................74
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.......................74
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT..........................75
SECTION 10.04. ACCELERATION OF NOTES......................................76
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER........................76
SECTION 10.06. NOTICE BY COMPANY..........................................76
SECTION 10.07. SUBROGATION................................................76
iv
<PAGE>
SECTION 10.08. RELATIVE RIGHTS............................................77
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY...............77
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE...................77
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.........................78
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION......................78
SECTION 10.13. AMENDMENTS.................................................78
ARTICLE 11. SUBSIDIARY GUARANTEES............................................78
SECTION 11.01. SUBSIDIARY GUARANTEE.......................................78
SECTION 11.02. SUBORDINATION OF SUBSIDIARY GUARANTEE......................79
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY..........................80
SECTION 11.04. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.............80
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.........81
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS..........................82
ARTICLE 12. MISCELLANEOUS....................................................82
SECTION 12.01. TRUST INDENTURE ACT CONTROLS...............................82
SECTION 12.02. NOTICES....................................................82
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES.........................................84
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.........84
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..............84
SECTION 12.06. RULES BY TRUSTEE AND AGENTS................................85
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS...............................85
SECTION 12.08. GOVERNING LAW..............................................85
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..............85
SECTION 12.10. SUCCESSORS.................................................85
SECTION 12.11. SEVERABILITY...............................................86
v
<PAGE>
SECTION 12.12. COUNTERPART ORIGINALS......................................87
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC...........................87
vi
<PAGE>
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF SUBSIDIARY GUARANTEE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE
vi
<PAGE>
INDENTURE dated as of March 31, 1998 between Columbus McKinnon
Corporation, a New York corporation (the "Company"), the guarantors named on the
signature pages hereto (the "Guarantors") and State Street Bank and Trust
Company, N.A., as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the 8 1/2% Series A Senior Subordinated Notes due 2008 (the "Series A
Notes") and the 8 1/2% Series B Senior Subordinated Notes due 2008 (the "Series
B Notes" and, together with the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note in the form of Exhibit
A-1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Additional Notes" means up to $100.0 million in aggregate
principal amount of Notes (other than the Initial Notes) issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the Voting Stock of a
Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback), other than sales of inventory in the ordinary course of
business (provided that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole shall be governed by Article V hereof and not by
Section 4.10 hereof), and (ii) the issue or sale by the Company or any of its
Subsidiaries of Equity Interests of any of the Company's Subsidiaries, in the
case of either clause (i) or (ii), whether in a single transaction or a series
of related transactions (a) that have a fair market value in excess of $3.0
million or (b) for net proceeds in excess of $3.0 million. Notwithstanding the
foregoing, the following items shall not be deemed to be Asset Sales: (i) a
transfer of assets by the Company to a Restricted Subsidiary or by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary; (ii) an issuance
of Equity Interests by a Restricted Subsidiary to the Company or to a Wholly
Owned Restricted Subsidiary of the Company; (iii) the sale of all of the Capital
Stock, or all or substantially all of the assets, of Minitec Corporation, a
Delaware corporation, and/or Mechanical Products, Inc., a Delaware corporation;
(iv) the sale of excess or obsolete assets, consistent with past practices; (v)
the disposition of marketable securities by CM Insurance Company, Inc. solely to
satisfy any insurance claims required to be paid in connection with such
company's insurance policies and (vi) a Restricted Payment that is permitted by
Section 4.07 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company, or any authorized committee of the Board of Directors.
"Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (iii)
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any domestic commercial bank having capital and surplus in excess of $500
million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within six months after the date of acquisition and (vi) money market
funds substantially all of the assets of which constitute Cash Equivalents of
the kinds described in clauses (i) through (v) of this definition.
"Cedel" means Cedel Bank, SA.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole to any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act); (ii) the adoption of a plan relating
to the liquidation or dissolution of the Company; (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above), other than the Employee
Stock Ownership Plan, becomes the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition), directly or indirectly, of
more than 35% of the Voting Stock of the Company (measured by voting power
rather than number of shares); or (iv) the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors.
"Closing Date" means the date hereof.
"Company" means Columbus McKinnon Corporation and any and all
successors thereto.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period plus, to
the extent deducted in computing such Consolidated Net Income: (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale; (ii) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries; (iii) consolidated interest expense of such
Person and its Restricted Subsidiaries, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations); (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an accrual
of or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries; less the amount of non-cash items increasing such
Consolidated Net Income for such period, in each case, on a consolidated basis
and determined in accordance with GAAP. Notwithstanding the foregoing, (a) the
provision for taxes on the income or profits of, and the depreciation and
amortization and other non-cash expenses of, a Restricted Subsidiary of the
referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent that a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders, and (b) the Net Income of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the Company or one
of its Restricted Subsidiaries.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by such Restricted Subsidiary of such Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (iv) the cumulative effect of a change in accounting principles
shall be excluded.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board of Directors at the
time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Custodian" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A-1 hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means (i) Indebtedness outstanding
under the New Credit Agreement and (ii) any other Senior Debt permitted under
this Indenture the principal amount of which is $25.0 million or more and that
has been designated by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale shall not constitute
Disqualified Stock.
"Domestic Restricted Subsidiary" of a Person means, at any
date of determination, any Restricted Subsidiary of such Person that (i) is
organized under the laws of the United States, any State thereof or the District
of Columbia as of such date or (ii) is not so organized but, due to an election
or otherwise, for any taxable year (or a portion thereof) that includes such
date (a) is treated as a domestic entity for United States federal income tax
purposes or (b) is treated as a partnership or a division of a domestic entity
for United States federal income tax purposes.
"Employee Stock Ownership Plan" means the Columbus McKinnon
Corporation Stock Ownership Plan, as amended from time to time in good faith by
the Board of Directors of the Company.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and
its Restricted Subsidiaries (other than Indebtedness under the New Credit
Agreement and Indebtedness being repaid with the net proceeds of the Offering)
in existence on the date hereof, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations), (ii) the
consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period, (iii) any interest expense on Indebtedness of
another Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon)
and (iv) the product of (a) all dividend payments, whether or not in cash, on
any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company (other than Disqualified Stock) or to the
Company or a Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period; provided, however,
that (i) in the event that the referent Person or any of its Restricted
Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other than
revolving credit borrowings) or issues or redeems preferred stock subsequent to
the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period and (ii) for purposes
of making the computation referred to above, (a) acquisitions that have been
made by the Company or any of its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be deemed to have occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to clause (iii)
of the proviso set forth in the definition of Consolidated Net Income, (b) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, and (c) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Subsidiaries following
the Calculation Date.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A-1 hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, by way of a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof), of all or any part of any Indebtedness.
"Guarantor" means any Domestic Restricted Subsidiary that
executes a Subsidiary Guarantee in accordance with the provisions of this
Indenture, and its respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all Indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
Indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount, and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Notes" means $200.0 million in aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of (i) the present value of the remaining
principal, premium and interest payments that would be payable with respect to
such Note if such Note were redeemed on April 1, 2003, computed using a discount
rate equal to the Treasury Rate plus 50 basis points, over (ii) the outstanding
principal amount of such Note.
"Make-Whole Average Life" means, with respect to any date of
redemption of Notes, the number of years (calculated to the nearest one-twelfth)
from such redemption date to April 1, 2003.
"Make-Whole Price" means, with respect to any Note, the
greater of (i) the sum of the principal amount of such Note and the Make-Whole
Amount with respect to such Note and (ii) the redemption price of such Note on
April 1, 2003.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(b) the disposition of any securities by such Person or any of its Subsidiaries
or the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"New Credit Agreement" means that certain Credit Agreement,
dated as of March 31, 1998, by and among the Company, certain lenders and other
financial institutions, and Fleet National Bank, as administrative agent for
such lenders and other financial institutions, initially providing for up to
$300.0 million of borrowings, but in no event shall such borrowings exceed
$325.0 million at any one time outstanding, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, restated, renewed,
refunded, replaced or refinanced from time to time, less the aggregate amount of
all Net Proceeds of Asset Sales that have been applied since the date hereof to
permanently reduce any Indebtedness under the New Credit Agreement pursuant to
Section 3.09 and Section 4.10 hereof.
"Non-Recourse Debt" means Indebtedness: (i) as to which
neither the Company nor any of its Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise) or (c) constitutes the lender; and (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear
or Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"Permitted Investments" means (i) any Investment in the
Company or in a Restricted Subsidiary of the Company; (ii) any Investment in
Cash Equivalents; (iii) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person if, as a result of such Investment, (a)
such Person becomes a Restricted Subsidiary of the Company or (b) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company; (iv) any Investment made as a result of
the receipt of non-cash consideration from an Asset Sale that was made pursuant
to and in compliance with Section 4.10 hereof; (v) any Investments to the extent
acquired in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company; (vi) any Investment by the Company in CM
Insurance Company, Inc. in the ordinary course of business, consistent with past
practices and (vii) other Investments in an amount not to exceed $20.0 million.
"Permitted Junior Securities" of a Person means (i) Equity
Interests in such Person and (ii) debt securities of such Person that are
subordinated to all Senior Debt (and any debt securities issued in exchange for
Senior Debt) of such Person to substantially the same extent as, or to a greater
extent than, the Notes are subordinated to Senior Debt of the Company.
"Permitted Liens" means (i) Liens securing Senior Debt; (ii)
Liens in favor of the Company or any of its Wholly Owned Restricted
Subsidiaries; (iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens existing on the date hereof; (vii) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; and (viii) Liens incurred in the ordinary course of business
of the Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $5.0 million at any one time outstanding and that
(a) are not incurred in connection with the borrowing of money or the obtaining
of advances or credit (other than trade credit in the ordinary course of
business) and (b) do not in the aggregate materially detract from the value of
the property or materially impair the use thereof in the operation of business
by the Company or such Restricted Subsidiary.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or such Restricted Subsidiary (other
than intercompany Indebtedness); provided that: (i) the principal amount (or
accreted value, if applicable) of such Permitted Refinancing Indebtedness does
not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date no earlier than the final maturity date, and a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity, of the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Notes on terms at least as favorable to the Holders of Notes as
those contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 31, 1998, by and among the Company, the Guarantors
and the other parties named on the signature pages thereof, as such agreement
may be amended, modified or supplemented from time to time and, with respect to
any Additional Notes, one or more registration rights agreements between the
Company and the other parties thereto, as such agreements may be amended,
modified or supplemented from time to time, relating to rights given by the
Company to the purchasers of Additional Notes to register such Additional Notes
under the Securities Act.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means a Regulation S Temporary
Global Note or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global
Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global
Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Notes initially sold in reliance on Rule 903 of Regulation S.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Debt.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the
Private Placement Legend.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Period" means the 40-day restricted period as
defined in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" of any Person means (i) all Indebtedness of such
Person under the New Credit Agreement, (ii) any other Indebtedness of such
Person permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is subordinated to any Senior Debt of such Person and (iii) all Obligations with
respect to the foregoing. Notwithstanding anything to the contrary in the
foregoing, Senior Debt will not include (a) any liability for federal, state,
local or other taxes owed or owing by such Person, (b) any Indebtedness of such
Person to any of its Subsidiaries or other Affiliates, (c) any trade payables or
(d) any Indebtedness that is incurred in violation of this Indenture.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date of this Indenture.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee by each Guarantor
of the Company's payment obligations under this Indenture and the Notes,
executed pursuant to the provisions of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Treasury Rate" means, at any date of computation, the yield
to maturity as of such date (as compiled by and published in the most recent
Federal Reserve Statistical Release H.15 (519), which has become publicly
available at least two business days prior to the date of the redemption notice
for which such computation is being made, or if such Statistical Release is no
longer published, as reported in any publicly available source of similar market
data) of United States Treasury securities with a constant maturity most nearly
equal to the Make-Whole Average Life; provided, however, that if the Make-Whole
Average Life is not equal to the constant maturity of the United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the Make-Whole Average Life is less
than one year, the weekly average yield on actually traded United States
treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note in
the form of Exhibit A-1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Subsidiary" means any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company; (c) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (1) to subscribe for additional Equity Interests or (2) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries; and (e) has at least one
director on its board of directors that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the Company or
any of its Restricted Subsidiaries.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Voting Stock" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person and its other Wholly Owned Restricted
Subsidiaries.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"..................................4.11
"Asset Sale".............................................4.10
"Asset Sale Offer".......................................3.09
"Authentication Order"...................................2.02
"Bankruptcy Law".........................................4.01
"Change of Control Offer"................................4.15
"Change of Control Payment"..............................4.15
"Change of Control Payment Date" ........................4.15
"Covenant Defeasance"....................................8.03
"Event of Default".......................................6.01
"Excess Proceeds"........................................4.10
"incur"..................................................4.09
"Legal Defeasance" ......................................8.02
"Offer Amount"...........................................3.09
"Offer Period"...........................................3.09
"Paying Agent"...........................................2.03
"Permitted Debt".........................................4.09
"Purchase Date"..........................................3.09
"Registrar"..............................................2.03
"Restricted Payments"....................................4.07
SECTION 1.03.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the
Company and the Guarantors, respectively, and any successor obligor upon the
Notes and the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in
the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) Global Notes.
Notes issued in global form shall be substantially in the
form of Exhibits A-1 or A-2 attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A-1 attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the Note
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c) Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of the Regulation S Temporary Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the Depositary or the nominee of the Depositary for the accounts
of designated agents holding on behalf of Euroclear or Cedel Bank, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. The
Restricted Period shall be terminated upon the receipt by the Trustee of (i) a
written certificate from the Depositary, together with copies of certificates
from Euroclear and Cedel Bank certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note (except to the extent of any
beneficial owners thereof who acquired an interest therein during the Restricted
Period pursuant to another exemption from registration under the Securities Act
and who will take delivery of a beneficial ownership interest in a 144A Global
Note bearing a Private Placement Legend, all as contemplated by Section
2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the Company.
Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in Regulation S Permanent Global Notes pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent Global Notes,
the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate
principal amount of the Regulation S Temporary Global Note and the Regulation S
Permanent Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the "General
Terms and Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall
be applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by
Participants through Euroclear or Cedel Bank.
SECTION 2.02. One Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal may be reproduced on the Notes and may
be in facsimile form.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by two Officers (an "Authentication Order"), authenticate Notes for original
issue up to the aggregate principal amount stated in paragraph 4 of the Notes.
The aggregate principal amount of Notes outstanding at any time may not exceed
such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes
may be presented for registration of transfer or for exchange ("Registrar") and
an office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and will notify the Trustee in writing of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
written notice from the Depositary that it is unwilling or unable to continue to
act as Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such written notice from the
Depositary or (ii) the Company in its sole discretion determines that the Global
Notes (in whole but not in part) should be exchanged for Definitive Notes and
delivers a written notice to such effect to the Trustee; provided that in no
event shall the Regulation S Temporary Global Note be exchanged by the Company
for Definitive Notes prior to (x) the expiration of the Restricted Period and
(y) the receipt by the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee in writing. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.07
and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Temporary Regulation S Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above; provided that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Temporary Global Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of
any certificates required pursuant to Rule 903 under the Securities Act.
Upon consummation of an Exchange Offer by the Company in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall
be deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the Holder
of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Note(s) pursuant to
Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or
the Regulation S Permanent Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a certificate
from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest to
a Person who shall take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note, a certificate from such holder
in the form of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than
those listed in subparagraphs (B) through (D) above, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations
as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of
any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the
Securities Act, except in the case of a transfer pursuant to an exemption
from the registration requirements of the Securities Act other than Rule
903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not
(1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest to
a Person who shall take delivery thereof in the form of a Definitive
Note that does not bear the Private Placement Legend, a certificate
from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Company shall
execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iv) shall be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iv)
shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit
C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications, certificates and Opinion of Counsel required
by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase
or cause to be increased the aggregate principal amount of, in the
case of clause (A) above, the appropriate Restricted Global Note,
in the case of clause (B) above, the 144A Global Note, and in the
case of clause (C) above, the Regulation S Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name of
Persons who take delivery thereof in the form of a Restricted Definitive Note if
the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note.
Upon receipt of a request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Notes pursuant to the instructions
from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS NOT
ACQUIRING THE SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND
IS ACQUIRING THIS SECURITY IN AN OFF-SHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR (C) AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT). THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to
this Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF
THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes shall be the
valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (c) to register the transfer
of or to exchange a Note between a record date and the next succeeding
Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile, followed by delivery to the Registrar of the originals of such
certifications, certificates and Opinions of Counsel.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge the Holder for its expenses in
replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed or purchased
in an offer to purchase at any time, the Trustee shall select the Notes to be
redeemed or purchased among the Holders of the Notes as directed by the Company,
or, absent any such direction, on a pro rata basis, by lot or in accordance with
any other method the Trustee considers fair and appropriate; provided that no
Notes of $1,000 or less shall be redeemed in part. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price.
A notice of redemption may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the Notes
shall be subject to redemption pursuant to this Section 3.07 at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the Make-Whole Price, plus accrued and unpaid interest and
Liquidated Damages thereon to the applicable redemption date, prior to April 1,
2003. On and after April 1, 2003, the Notes shall be subject to redemption at
any time at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on April 1 of the years
indicated below:
YEAR PERCENTAGE
2003..........................................................104.250%
2004..........................................................102.833%
2005..........................................................101.417%
2006 and thereafter...........................................100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
3.07, at any time on or prior to April 1, 2001, the Company may redeem up to 35%
of the aggregate principal amount of Notes issued under this Indenture at a
redemption price equal to 108.50% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages thereon to the redemption date, with
the net cash proceeds of one or more offerings of Equity Interests (other than
Disqualified Stock) of the Company; provided that (i) at least $130.0 million in
aggregate principal amount of Notes remain outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries) and (ii) such redemption shall occur within 90 days of the date of
the closing of such offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption
or sinking fund payments with respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders to purchase Notes
(an "Asset Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall commence within 5 days of the date
the Excess Proceeds from any Asset Sales exceeds $15.0 million and the Asset
Sale Offer shall remain open for a period of 20 Business Days following its
commencement and no longer, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than five Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company shall purchase the principal amount of Notes required to be purchased
pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the Asset Sale
Offer. Payment for any Notes so purchased shall be made in the same manner as
interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest;
(j) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Purchase Date;
(d) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may not
elect to have only a portion of such Note purchased;
(e) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(f) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon written request from the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC,
so long as any Notes are outstanding, the Company shall furnish to the Holders
of Notes (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" that describes
the financial condition and results of operations of the Company and its
consolidated Subsidiaries (showing in reasonable detail, either on the face of
the financial statements or in the footnotes thereto and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial information and results of operations
of the Unrestricted Subsidiaries of the Company) and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information and reports with the SEC for
public availability (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA ss. 314(a).
(b) For so long as any Notes remain outstanding, the Company and the
Guarantors shall furnish to Holders of the Notes and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such Officer
signing such certificate that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture;
and the Company and each of the Guarantors (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Company's
or any of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
the Company or any of its Subsidiaries) or to the direct or indirect holders of
the Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or to the Company or a
Restricted Subsidiary of the Company); (ii) purchase, redeem or otherwise
acquire or retire for value (including, without limitation, in connection with
any merger or consolidation involving the Company) any Equity Interests of the
Company (other than any such Equity Interests owned by the Company or any
Restricted Subsidiary of the Company); (iii) make any payment on or with respect
to, or purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes, except a payment of interest or
a payment of principal at Stated Maturity; or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(iv) above being collectively referred to as "Restricted Payments"), unless, at
the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the date hereof (excluding Restricted Payments permitted by clauses (ii),
(iii) and (iv) of the next succeeding paragraph), is less than the sum, without
duplication, of (1) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) beginning April 1, 1998 to the end of
the Company's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (2) 100% of the aggregate net cash proceeds received by the
Company since the date hereof as a contribution to its common equity capital or
from the issue or sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of Disqualified Stock or debt
securities of the Company that have been converted into such Equity Interests
(other than Equity Interests (or Disqualified Stock or convertible debt
securities) sold to a Subsidiary of the Company), plus (3) to the extent that
any Restricted Investment that was made after the date hereof is sold for cash
or otherwise liquidated or repaid for cash, the lesser of (A) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (B) the initial amount of such Restricted Investment,
plus (4) $10.0 million.
The foregoing provisions shall not prohibit (i) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of subordinated Indebtedness or Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, other Equity Interests of
the Company (other than Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause (c)(2)
of the preceding paragraph; (iii) the defeasance, redemption, repurchase or
other acquisition of subordinated Indebtedness with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of any
dividend by a Restricted Subsidiary of the Company to the holders of its common
Equity Interests on a pro rata basis; and (v) the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company
held by any member of the Company's (or any of its Subsidiaries') management,
board of directors or employee stock ownership plan; provided that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $1.0 million in any twelve-month period and no
Default or Event of Default shall have occurred and be continuing immediately
after such transaction.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors whose resolution with respect thereto shall be delivered
to the Trustee, such determination to be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if such fair market value exceeds $5.0 million. Not later than 30 days
following the end of any fiscal quarter of the Company in which the Company or
any of its Restricted Subsidiaries have made any Restricted Payments, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payments were permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, together with a copy
of any fairness opinion or appraisal required by this Indenture.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if such designation would not cause a Default.
For purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this Section 4.07. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
fair market value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary.
Any such designation by the Board of Directors shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet this definition of an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such Section 4.09). The Board of Directors of the Company may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 4.09 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, and (ii) no Default or Event of
Default would be in existence immediately following such designation.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries; provided, however,
that the foregoing restrictions shall not apply to encumbrances or restrictions
existing under or by reason of (A) Existing Indebtedness as in effect on the
date hereof, (B) the New Credit Agreement as in effect as of the date hereof,
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions than those
contained in the New Credit Agreement as in effect on the date hereof, (C) this
Indenture and the Notes, (D) applicable law, (E) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (F) customary non-assignment provisions in leases entered into in
the ordinary course of business, (G) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iii) above on the property so acquired, (H) any
agreement for the sale of a Restricted Subsidiary that restricts distributions
by such Restricted Subsidiary pending its sale, (I) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness
being refinanced, (J) secured Indebtedness otherwise permitted to be incurred
pursuant to the provisions of Section 4.12 hereof that limits the right of the
debtor to dispose of the assets securing such Indebtedness, (K) provisions with
respect to the disposition or distribution of assets or property in joint
venture agreements and other similar agreements entered into in the ordinary
course of business and (L) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course of
business.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and the Company shall not permit any of
its Restricted Subsidiaries to issue any shares of preferred stock (other than
to the Company or a Wholly Owned Restricted Subsidiary of the Company);
provided, however, that the Company and its Restricted Subsidiaries may incur
Indebtedness (including Acquired Debt) and the Company's Restricted Subsidiaries
may issue preferred stock if the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such preferred stock is issued would have been at
least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if such additional Indebtedness
had been incurred or such preferred stock had been issued at the beginning of
such four-quarter period.
The provisions of the first paragraph of this Section 4.09
shall not apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness pursuant to the New Credit Agreement;
(ii) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes or the Subsidiary Guarantees, as applicable, in
each case, in an aggregate amount not to exceed $200.0 million;
(iv) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new
Restricted Subsidiary; provided that such Indebtedness was incurred by the
prior owner of such assets or such Restricted Subsidiary prior to such
acquisition by the Company and its Restricted Subsidiaries and was not
incurred in connection with, or in contemplation of, such acquisition by
the Company and its Restricted Subsidiaries; and provided further that the
aggregate amount of Indebtedness incurred pursuant to this clause (iv) does
not exceed $10.0 million at any one time outstanding;
(v) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that was permitted by the Indenture to be
incurred under the first paragraph hereof or clauses (ii), (iii), (iv) or
(ix) of this paragraph;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that (a) any
subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary of the Company and (b) any sale or other transfer of
any such Indebtedness to a Person that is not either the Company or a
Restricted Subsidiary of the Company shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be, that was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that (a) are incurred for the purpose
of fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or (b) that are incurred in the ordinary course of business on
a non-speculative basis in connection with interest rate swap, cap or
collar agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements;
(viii) the incurrence by the Company and its Restricted Subsidiaries of
additional Indebtedness in an aggregate amount not to exceed $15.0 million
at any one time outstanding;
(ix) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings
or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the
Company or such Restricted Subsidiary, in an aggregate principal amount not
to exceed $10.0 million at any time outstanding; and
(x) the guarantee by the Company or any of its Restricted Subsidiaries
of Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09.
For purposes of determining compliance with this Section 4.09,
in the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (x) above or
is entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this Section 4.09. Accrual of interest, accretion
or amortization of original issue discount and the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms will not
be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09;
provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or
such Restricted Subsidiary, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash;
provided that the amount of (a) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or such
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (b) any securities, notes or other obligations received by the
Company or such Restricted Subsidiary from such transferee that are
contemporaneously (subject to ordinary settlement periods) converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received) shall, in each case, be deemed to be cash for purposes of this
provision.
Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds, at its option, (1) to repay
Senior Debt of the Company or any Restricted Subsidiary (and, in the case of
revolving credit borrowings, to reduce commitments with respect thereto) or (2)
to the acquisition of a majority of the assets of, or a majority of the Voting
Stock of, another business, the making of a capital expenditure or the
acquisition of other long-term assets that are used or useful in the business of
the Company or any of its Restricted Subsidiaries. Pending the final application
of any such Net Proceeds, the Company may temporarily reduce revolving credit
borrowings or otherwise invest such Net Proceeds in any manner that is not
prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not
applied or invested as provided in the first sentence of this paragraph shall be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $15.0 million, the Company shall be required to make an offer
to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes that may be purchased out of the Excess Proceeds at an
offer price in cash in an amount equal to 100% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages thereon to the date of
purchase, in accordance with the procedures set forth in Section 3.09 hereof. To
the extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes
tendered in such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or such Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, an opinion as to the
fairness to the holders of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing. Notwithstanding the foregoing, the following items shall not be deemed
to be Affiliate Transactions: (i) any employment agreement, employee benefit
plan or stock option plan entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and the payment of customary
director fees by the Company or any of its Restricted Subsidiaries; (ii)
transactions between or among the Company and its Restricted Subsidiaries; and
(iii) Restricted Payments that are permitted under Section 4.07 hereof.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, except Permitted Liens.
SECTION 4.13. ADDITIONAL SUBSIDIARY GUARANTEES.
If (i) the Company or any of its Domestic Restricted
Subsidiaries shall acquire or create another Domestic Restricted Subsidiary
after the date hereof or (ii) an Unrestricted Subsidiary of the Company is
redesignated as a Restricted Subsidiary or otherwise ceases to be an
Unrestricted Subsidiary and thereafter is a Domestic Restricted Subsidiary, then
such newly acquired, created or redesignated Domestic Restricted Subsidiary
shall become a Guarantor by executing a Supplemental Indenture in the form
attached hereto as Exhibit E and deliver an Opinion of Counsel to the Trustee to
the effect that such Supplemental Indenture has been duly authorized, executed
and delivered by such Domestic Restricted Subsidiary and constitutes a valid and
binding obligation of such Domestic Restricted Subsidiary, enforceable against
such Domestic Restricted Subsidiary in accordance with its terms (subject to
customary exceptions).
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer to each Holder of Notes to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages thereon to the date of
purchase (the "Change of Control Payment"). Within 30 days following any Change
of Control, the Company shall mail a notice to each Holder stating: (1) that the
Change of Control Offer is being made pursuant to this Section 4.15 and that all
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"); (3)
that any Note not tendered will continue to accrue interest; (4) that, unless
the Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
seventh Business Day preceding the Change of Control Payment Date; (6) that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the fifth Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have the Notes purchased; and (7) that Holders whose
Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an integral
multiple thereof. The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Notes in connection with a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. Prior to complying
with the provisions of this Section 4.15, but in any event within 90 days
following a Change of Control, the Company shall either repay all outstanding
Senior Debt or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Debt to permit the repurchase of Notes required by
this Section 4.15. The Company shall publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date and the Company shall send the Trustee written confirmation of such
results.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and purchases all Notes validly tendered
and not withdrawn under such Change of Control Offer.
SECTION 4.16. NO SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, (i) the
Company shall not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment to
any Senior Debt of the Company and senior in any respect in right of payment to
the Notes and (ii) no Guarantor shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of such Guarantor and senior in any respect
in right of payment to such Guarantor's Subsidiary Guarantee; provided, however,
that no Indebtedness of the Company or any Guarantor shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Company or such Guarantor solely by virtue of being unsecured. In addition, no
Restricted Subsidiary may incur any Indebtedness that is subordinated or junior
in right of payment to any Senior Debt of such Restricted Subsidiary unless such
Restricted Subsidiary (a) is a Guarantor or (b) executes a supplemental
indenture becoming a Guarantor in accordance with the terms of this Indenture.
SECTION 4.17. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Restricted Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder of any Notes for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is offered
to be paid or is paid to all Holders of the Notes that consent, waive or agree
to amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither the Company nor any Guarantor shall consolidate or
merge with or into (whether or not the Company or such Guarantor is the
surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets in one or more
related transactions, to another corporation, Person or entity unless (i) the
Company or such Guarantor is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company or such Guarantor) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia; (ii) the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company or such Guarantor) or
the entity or Person to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made assumes all the obligations of the
Company or such Guarantor under the Notes and this Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee and
under the Registration Rights Agreement; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) except in the case
of a merger of the Company with or into a Wholly Owned Subsidiary of the
Company, the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company or such Guarantor), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (a) shall have Consolidated Net Worth immediately after the
transaction equal to or greater than the consolidated net worth of the Company
immediately preceding the transaction and (b) shall, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest or
Liquidated Damages with respect to, the Notes and such default continues for a
period of 30 days, whether or not such payment is prohibited by the provisions
of Article 10 hereof;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise, whether or not such payment is prohibited by the provisions of
Article 10 hereof;
(c) the Company or any of its Restricted Subsidiaries fails to comply
with any of the provisions of Section 4.07, 4.09, 4.10, 4.15 or 5.01 hereof;
(d) the Company or any of its Restricted Subsidiaries fails to observe
or perform any other covenant, representation, warranty or other agreement in
this Indenture or the Notes for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding voting as a single class;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, which default (a) is caused by a
failure to pay principal of or premium or interest on such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $10.0 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Significant Subsidiaries or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary and such
judgment or judgments remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days, provided that the aggregate of all
such undischarged judgments exceeds $10.0 million;
(g) the Company or any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
(i) except as permitted by this Indenture, any Subsidiary Guarantee is
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations under
such Guarantor's Subsidiary Guarantee or any Guarantor shall default in the
performance of any covenant set forth in its Subsidiary Guarantee.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default
specified in clause (g) or (h) of Section 6.01 hereof with respect to the
Company, any Significant Subsidiary or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately. Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof occurs with respect to the Company, any
of its Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, all outstanding
Notes shall be due and payable immediately without further action or notice. The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the Trustee may on behalf of all of the Holders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after April 1, 2003 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding payment of the premium that the
Company would have had to pay if the Company then had elected to redeem the
Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to April 1, 2003
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on April 1 of the years
set forth below, as set forth below (expressed as a percentage of the amount
that would otherwise be due but for the provisions of this paragraph, plus
accrued and unpaid interest, if any, to the date of payment):
YEAR PERCENTAGE
1998..............................................108.500%
1999..............................................107.650%
2000..............................................106.800%
2001..............................................105.950%
2002..............................................105.100%
SECTION 6.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of the Holders of all of the Notes waive an existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of the principal of, premium and Liquidated Damages, if
any, or interest on, the Notes (including in connection with an offer to
purchase) (provided, however, that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05 CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
SECTION 6.06 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Note, on or after the respective
due dates expressed in the Note (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was grossly negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the willful misconduct or gross negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as Trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA ss. 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.07) and defending itself against any claim (whether
asserted by the Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
SECTION 7.08 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA ss.ss. 310(a)(1) and 310(a)(5). The Trustee (or in the case
of a corporation included in a bank holding company system the related bank
holding company) shall always have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of such bank holding company,
shall meet the capital requirements of TIA ss. 310(a)(2). The Trustee shall
comply with TIA ss. 310(b) including the optional provision permitted by the
second sentence of TIA ss. 309(b)(9); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or participation in
other securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA ss. 310(b)(1) are met.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article Eight.
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on written
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, interest and Liquidated Damages, if any, on such
Notes when such payments are due, (b) the Company's obligations with respect to
such Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
SECTION 8.03 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(d) through 6.01(f) hereof shall not constitute Events of Default.
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(g) or 6.01(h)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that after
the 91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06 REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its written request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.07 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company,
the Guarantors and the Trustee may amend or supplement this Indenture, the
Subsidiary Guarantees or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes or to alter the provisions of Article 2 hereof (including
the related definitions) in a manner that does not materially adversely affect
any Holder;
(c) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to the
Company or a Guarantor pursuant to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or
(g) to allow any Guarantor to execute a supplemental indenture
and/or a Subsidiary Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company and
the Guarantors in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, this Indenture
(including Section 3.09, 4.10 and 4.15 hereof), the Subsidiary Guarantees and
the Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Notes (including Additional Notes,
if any) then outstanding voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture, the Subsidiary Guarantees or the Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes (including Additional Notes, if any) voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall
determine which Notes are considered to be "outstanding" for purposes of this
Section 9.02.
Upon the written request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver under this Section 9.02 may not (with respect to any Notes
held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the redemption of
the Notes (other than provisions relating to the covenants described in Section
4.15 hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, interest or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes (including
Additional Notes, if any) and a waiver of the payment default that resulted from
such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, interest or Liquidated Damages, if any, on
the Notes;
(g) waive a redemption payment with respect to any Note (other
than a payment required by Section 4.15 hereof);
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or
(i) release any Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, except in accordance with the terms of
this Indenture.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee shall, if directed by the Company, place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to the documents required
by Section 11.04 hereof, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
SECTION 10.01 AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note
agrees, that the Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all Senior Debt (whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
SECTION 10.02 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the applicable Senior Debt) before Holders of the Notes shall be entitled to
receive any payment with respect to the Notes (except that Holders may receive
(i) Permitted Junior Securities and (ii) payments and other distributions made
from any defeasance trust created pursuant to Section 8.01 hereof); and
(2) until all Obligations with respect to Senior Debt (as
provided in subsection (1) above) are paid in full, any distribution to which
Holders would be entitled but for this Article 10 shall be made to holders of
Senior Debt (except that Holders of Notes may receive (i) Permitted Junior
Securities and (ii) payments and other distributions made from any defeasance
trust created pursuant to Section 8.01 hereof), as their interests may appear.
SECTION 10.03 DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof) until all principal and other Obligations with respect to the Senior
Debt have been paid in full if:
(i) a default in the payment of the principal of or premium or interest
on Designated Senior Debt occurs and is continuing beyond any applicable
grace period in the agreement, indenture or other document governing such
Designated Senior Debt (a "payment default"); or
(ii) a default, other than a payment default, on Designated Senior Debt
occurs and is continuing that then permits holders of the Designated Senior
Debt to accelerate its maturity (a "nonpayment default") and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Person who may give it pursuant to Section 10.12 hereof. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment Blockage
Notice shall be effective for purposes of this Section unless and until at
least 360 days shall have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice.
The Company may and shall resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 10.03(ii)
hereof, 179 days having passed after the Payment Blockage Notice is received if
the maturity of such Designated Senior Debt has not been accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
SECTION 10.04 ACCELERATION OF NOTES OR OTHER EVENTS OF DEFAULT.
If payment of the Notes is accelerated because of an Event of
Default or if payment of the Notes is permitted to be accelerated based upon an
Event of Default, the Company shall promptly notify the holders of Senior Debt
of such acceleration or Event of Default, as the case may be.
SECTION 10.05 WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Notes at a time when the Trustee
or such Holder, as applicable, has actual knowledge that such payment is
prohibited by any provision of this Article 10, such payment shall be held by
the Trustee or such Holder, in trust for the benefit of, and shall be paid
forthwith over and delivered, upon written request, to, the holders of Senior
Debt or their Representative under the credit agreement, indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
SECTION 10.06 NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent in writing of any facts known to the Company that would cause a payment of
any Obligations with respect to the Notes to violate this Article 10, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Debt as provided in this Article 10.
SECTION 10.07 SUBROGATION.
After all Senior Debt is paid in full and until the Notes are
paid in full, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
SECTION 10.08 RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of
Notes and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Trustee or any Holder of Notes from exercising
its available remedies upon a Default or Event of Default, subject to the rights
of holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay
principal of or interest on a Note on the due date, the failure is still a
Default or Event of Default.
SECTION 10.09 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other properly authorized Person making any
distribution to the Trustee or to the Holders of Notes for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Debt and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 10.
SECTION 10.11 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
SECTION 10.12 AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes.
SECTION 10.13 AMENDMENTS.
The provisions of this Article 10 shall not be amended or
modified without the written consent of the holders of all Senior Debt.
ARTICLE 11.
SUBSIDIARY GUARANTEES
SECTION 11.01 SUBSIDIARY GUARANTEE.
Subject to this Article 11, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that: (a)
the principal of and interest on the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Notes, if any, if lawful, and
all other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenant that this Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantee.
SECTION 11.02 SUBORDINATION OF SUBSIDIARY GUARANTEE.
The Obligations of each Guarantor under its Subsidiary
Guarantee pursuant to this Article 11 shall be junior and subordinated to the
Senior Debt of such Guarantor (including the guarantee of such Guarantor under
the New Credit Agreement) on the same basis as the Notes are junior and
subordinated to Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by any of the Guarantors only at such times as they may receive
and/or retain payments in respect of the Notes pursuant to this Indenture,
including Article 10 hereof.
SECTION 11.03 LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor under its Subsidiary Guarantee and this
Article 11 shall be limited to the maximum amount as will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Subsidiary Guarantee not constituting a fraudulent transfer or
conveyance.
SECTION 11.04 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section
11.01, each Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit D shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Subsidiary Guarantee set
forth in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new
Domestic Restricted Subsidiaries subsequent to the date of this Indenture, if
required by Section 4.13 hereof, the Company shall cause such Domestic
Restricted Subsidiaries to execute supplemental indentures to this Indenture and
Subsidiary Guarantees in accordance with Section 4.13 hereof and this Article
11, to the extent applicable.
SECTION 11.05 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
No Guarantor may consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person whether
or not affiliated with such Guarantor unless:
(a) subject to Section 11.05 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Guarantor or the
Company) unconditionally assumes all the obligations of such Guarantor, pursuant
to a supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, this Indenture and the Subsidiary Guarantee on the
terms set forth herein or therein;
(b) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(c) the Company would be permitted, immediately after giving
effect to such transaction, to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof.
In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
SECTION 11.06 RELEASES FOLLOWING SALE OF ASSETS.
In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all of the capital stock of any Guarantor, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of this Indenture, including without
limitation Section 4.10 hereof. Upon delivery by the Company to the Trustee of
an Officers' Certificate and an Opinion of Counsel to the effect that such sale
or other disposition was made by the Company in accordance with the applicable
provisions of this Indenture, including without limitation Section 4.10 hereof,
the Trustee shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Subsidiary
Guarantee.
Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under this
Indenture as provided in this Article 11.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall
control.
SECTION 12.02 NOTICES.
Any notice or communication by the Company, any Guarantor or
the Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address
If to the Company and/or any Guarantor:
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
Telephone No.: (716) 689-5400
Telecopier No.: (716) 689-5598
Attention: Corporate Secretary
With a copy to:
Lippes, Silverstein, Mathias & Wexler
7th Floor, 700 Guaranty Building
28 Church Street
Buffalo, New York 14202-3950
Telephone No.: (716) 853-5100
Telecopier No.: (716) 853-5199
Attention: Robert J. Olivieri
If to the Trustee:
State Street Bank and Trust Company, N.A.
61 Broadway
15th Floor
New York, New York 10006
Telephone No.: (212) 612-3425
Telecopier No.: (212) 612-3201
Attention: Corporate Trust Department
The Company, any Guarantor or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA ss. 313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 12.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, shall have
any liability for any obligations of the Company or such Guarantor under the
Notes, the Subsidiary Guarantees or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
SECTION 12.08 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 12.10 SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 12.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 12.12 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 12.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
SIGNATURES
Dated as of March 31, 1998
COLUMBUS MCKINNON CORPORATION
BY: ________________________
Name:
Title:
YALE INDUSTRIAL PRODUCTS, INC.
By: ________________________
Name:
Title:
MECHANICAL PRODUCTS, INC.
By: ________________________
Name:
Title:
MINITEC CORPORATION
By: ________________________
Name:
Title:
Attest:
-------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, N.A.
BY: ________________________
Name:
Title:
Attest:
________________________
Vice President
Date:
<PAGE>
EXHIBIT A-1
(Face of Note)
================================================================================
(a) CUSIP/CINS
8 1/2% [Series A] [Series B] Senior Subordinated Notes due 2008
No. _____ $___________
COLUMBUS MCKINNON CORPORATION
promises to pay to ________________________________________________________
or registered assigns,
the principal sum of_______________________________________________________
Dollars on April 1, 2008
Interest Payment Dates: April 1 and October 1, commencing October 1, 1998
Record Dates: March 15 and September 15
DATED: MARCH 31, 1998
COLUMBUS MCKINNON CORPORATION
BY:_________________________
Name:
Title:
(SEAL)
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY, N.A.
as Trustee
By:__________________________
================================================================================
(Back of Note)
8 1/2% [Series A] [Series B] Senior Subordinated Notes due 2008
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.
THE SECURITY (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND
IS NOT ACQUIRING THE SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFF-SHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT). THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1 INTEREST. Columbus McKinnon Corporation, a New York
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 8 1/2% per annum from March 31, 1998 until maturity and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, semi-annually on April 1 and October 1 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be October 1, 1998. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any, (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2 METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Liquidated Damages, if any, to the
Persons who are registered Holders of Notes at the close of business on the
March 15 or September 15 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. The Notes will be payable as to principal, premium and
Liquidated Damages, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest and Liquidated Damages, if
any, may be made by check mailed to the Holders at their addresses set forth in
the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3 PAYING AGENT AND REGISTRAR. Initially, State Street
Bank and Trust Company, N.A., the Trustee under the Indenture, will act as
Paying Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4 INDENTURE. The Company issued the Notes under an
Indenture dated as of March 31, 1998 ("Indenture") between the Company, the
Guarantors and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Notes are obligations of the
Company limited to $300.0 million in aggregate principal amount, plus amounts,
if any, issued to pay Liquidated Damages, if any, on outstanding Notes as set
forth in Paragraph 2 hereof.
5 OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this
Paragraph 5, the Notes will be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the Make-Whole Price, plus accrued and unpaid interest and
Liquidated Damages thereon to the applicable redemption date, prior to April 1,
2003. Thereafter, the Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Liquidated Damages
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on April 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003..............................................104.250%
2004..............................................102.833%
2005..............................................101.417%
2006 and thereafter...............................100.000%
(b) Notwithstanding the provisions of subparagraph (a) of
this Paragraph 5, at any time on or prior to April 1, 2001, the Company may
redeem up to 35% of the aggregate principal amount of Notes issued under the
Indenture at a redemption price equal to 108.50% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages thereon to the
redemption date, with the net cash proceeds of one or more offerings of Equity
Interests (other than Disqualified Stock) of the Company; provided that (i) at
least $130.0 million in aggregate principal amount of Notes originally issued
remain outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries) and (ii) that such
redemption shall occur within 90 days of the date of the closing of such
offering.
6 MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7 REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates
an Asset Sale, the Net Proceeds of which constitute Excess Proceeds, within five
days of each date on which the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company shall commence an offer to all Holders of Notes (an "Asset
Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum
principal amount of Notes (including any Additional Notes) that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. To the extent that
any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not prohibited by the
Indenture. If the aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased on a pro rata basis. Holders of Notes that are the subject
of an offer to purchase will receive an Asset Sale Offer from the Company prior
to any related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Notes.
8 NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption date to
each Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9 DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10 PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
11 AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Subsidiary Guarantees or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes and Additional Notes, if any,
voting as a single class, and any existing default or compliance with any
provision of the Indenture, the Subsidiary Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes and Additional Notes, if any, voting as a single class.
Without the consent of any Holder of a Note, the Indenture, the Subsidiary
Guarantees or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company's
or Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the requirements
of the SEC in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act, to provide for the Issuance of Additional Notes
in accordance with the limitations set forth in the Indenture, or to allow any
Guarantor to execute a supplemental indenture to the Indenture and/or a
Subsidiary Guarantee with respect to the Notes.
12 DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Liquidated Damages on
the Notes; (ii) default in payment when due of principal of or premium, if any,
on the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company or any of its Restricted Subsidiaries to comply with Section
4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company or
any of its Restricted Subsidiaries for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes
(including Additional Notes, if any) then outstanding voting as a single class
to comply with certain other agreements in the Indenture or the Notes; (v)
default under certain other agreements relating to Indebtedness of the Company
which default results in the acceleration of such Indebtedness prior to its
express maturity; (vi) certain final judgments for the payment of money that
remain undischarged for a period of 60 days; (vii) certain events of bankruptcy
or insolvency with respect to the Company or any of its Significant
Subsidiaries; and (viii) except as permitted by the Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on its behalf, shall deny or disaffirm its
obligations under such Guarantor's Subsidiary Guarantee. If any Event of Default
(other than an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any Significant Subsidiary) occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal of, premium, if any, or interest) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of the principal of, premium, and Liquidated Damages, if
any, or interest on, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13 TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
14 NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder, of the Company or any Guarantor, as such,
shall not have any liability for any obligations of the Company or such
Guarantor under the Notes, the Subsidiary Guarantees, or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
15 AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or of the authenticating
agent.
16 ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
17 ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the A/B
Exchange Registration Rights Agreement dated as of March 31, 1998, between the
Company, the Guarantors and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18 CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
19 SUBORDINATION. Payment of principal, premium, if any,
and interest and Liquidated Damages, if any, on the Notes is subordinated to the
prior payment in full of Senior Debt on the terms provided in the Indenture.
<PAGE>
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
Telephone No.: (716) 689-5400
Telecopier No.: (716) 689-5598
Attention: Corporate Secretary
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date: ____________
Your Signature:_________________________________
(Sign exactly as your name appears on the face
of this Note)
Signature Guarantee.
- --------------------------------
NOTICE: Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Bond Registrar which requirements will include
membership or participation in the Securities Transfer Agents Medallion Program
or such other "signature guarantee program" as may be determined by the Bond
Registrar in addition to, or in substitution for, the Securities Transfer Agents
Medallion Program, all in accordance with the Securities Exchange Act of 1934,
as amended.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
_ _
[_] Section 4.10 [_] Section 4.15
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state
the amount you elect to have purchased: $________
Date:_____________ Your Signature:_______________________
(Sign exactly as your name appears
on the Note)
Tax Identification No:________________
Signature Guarantee.
- --------------------------------
NOTICE: Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Bond Registrar which requirements will include
membership or participation in the Securities Transfer Agents Medallion Program
or such other "signature guarantee program" as may be determined by the Bond
Registrar in addition to, or in substitution for, the Securities Transfer Agents
Medallion Program, all in accordance with the Securities Exchange Act of 1934,
as amended.
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Principal Amount
Amount of Amount of of this Signature of
decrease in increase in Global Note authorized
Principal Amount Principal Amount following such officer
of this of this decrease (or of Trustee or
Date of Exchange Global Note Global Note increase) Note Custodian
- ---------------- -------------- --------------- --------------- --------------
<PAGE>
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
================================================================================
CUSIP/CINS ......
8 1/2% [Series A] [Series B] Senior Subordinated Notes due 2008
No._______ $_________
COLUMBUS McKINNON CORPORATION
promises to pay to _________________________________________________________
or registered assigns,
the principal sum of________________________________________________________
Dollars on April 1, 2008
Interest Payment Dates: April 1, and October 1, commencing October 1
Record Dates: March 15, and September 15
DATED: MARCH 31, 1998
COLUMBUS MCKINNON CORPORATION
BY:__________________________
Name:
Title:
(SEAL)
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY, N.A.
as Trustee
By:_____________________________________
================================================================================
<PAGE>
(Back of Regulation S Temporary Global Note)
8 1/2% [Series A] [Series B] Senior Subordinated Notes due 2008
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER
NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.
THE SECURITY (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND
IS NOT ACQUIRING THE SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFF-SHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT). THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1 INTEREST. Columbus McKinnon Corporation, a New York
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 8 1/2% per annum from March 31, 1998 until maturity and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, semi-annually on April 1 and October 1 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be October 1, 1998. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any, (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for
one or more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Senior Subordinated Notes under the Indenture.
2 METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Liquidated Damages, if any, to the
Persons who are registered Holders of Notes at the close of business on the
March 15 or September 15 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. The Notes will be payable as to principal, premium and
Liquidated Damages, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest and Liquidated Damages, if
any, may be made by check mailed to the Holders at their addresses set forth in
the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3 PAYING AGENT AND REGISTRAR. Initially, State Street
Bank and Trust Company, N.A., the Trustee under the Indenture, will act as
Paying Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4 INDENTURE. The Company issued the Notes under an
Indenture dated as of March 31, 1998 ("Indenture") between the Company, the
Guarantors and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Notes are obligations of the
Company limited to $300.0 million in aggregate principal amount, plus amounts,
if any, issued to pay Liquidated Damages, if any, on outstanding Notes as set
forth in Paragraph 2 hereof.
5 OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this
Paragraph 5, the Notes will be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the Make-Whole Price, plus accrued and unpaid interest and
Liquidated Damages thereon to the applicable redemption date, prior to April 1,
2003. Thereafter, the Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Liquidated Damages
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on April 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003..........................................................104.250%
2004..........................................................102.833%
2005..........................................................101.417%
2006 and thereafter...........................................100.000%
(b) Notwithstanding the provisions of subparagraph (a) of
this Paragraph 5, at any time on or prior to April 1, 2001, the Company may
redeem up to 35% of the aggregate principal amount of Notes issued under the
Indenture at a redemption price equal to 108.50% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages thereon to the
redemption date, with the net cash proceeds of one or more offerings of Equity
Interests (other than Disqualified Stock) of the Company; provided that (i) at
least $130.0 million in aggregate principal amount of Notes originally issued
remain outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries) and (ii) that such
redemption shall occur within 90 days of the date of the closing of such
offering.
6 MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7 REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates
an Asset Sale, the Net Proceeds of which constitute Excess Proceeds, within five
days of each date on which the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company shall commence an offer to all Holders of Notes (an "Asset
Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum
principal amount of Notes (including any Additional Notes) that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. To the extent that
any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not prohibited by the
Indenture. If the aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased on a pro rata basis. Holders of Notes that are the subject
of an offer to purchase will receive an Asset Sale Offer from the Company prior
to any related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Notes.
8 NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption date to
each Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9 DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in
whole or in part for one or more Global Notes only (i) on or after the
termination of the 40-day restricted period (as defined in Regulation S) and
(ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.
10 PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
11 AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Subsidiary Guarantees or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes and Additional Notes, if any,
voting as a single class, and any existing default or compliance with any
provision of the Indenture, the Subsidiary Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes and Additional Notes, if any, voting as a single class.
Without the consent of any Holder of a Note, the Indenture, the Subsidiary
Guarantees or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company's
or Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the requirements
of the SEC in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act, to provide for the Issuance of Additional Notes
in accordance with the limitations set forth in the Indenture, or to allow any
Guarantor to execute a supplemental indenture to the Indenture and/or a
Subsidiary Guarantee with respect to the Notes.
12 DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Liquidated Damages on
the Notes; (ii) default in payment when due of principal of or premium, if any,
on the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company or any of its Restricted Subsidiaries to comply with Section
4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company or
any of its Restricted Subsidiaries for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes
(including Additional Notes, if any) then outstanding voting as a single class
to comply with certain other agreements in the Indenture or the Notes; (v)
default under certain other agreements relating to Indebtedness of the Company
which default results in the acceleration of such Indebtedness prior to its
express maturity; (vi) certain final judgments for the payment of money that
remain undischarged for a period of 60 days; (vii) certain events of bankruptcy
or insolvency with respect to the Company or any of its Significant
Subsidiaries; and (viii) except as permitted by the Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on its behalf, shall deny or disaffirm its
obligations under such Guarantor's Subsidiary Guarantee. If any Event of Default
(other than an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any Significant Subsidiary) occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal of, premium, if any, or interest) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of the principal of, premium, and Liquidated Damages, if
any, or interest on, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13 TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
14 NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder, of the Company or any Guarantor, as such,
shall not have any liability for any obligations of the Company or any Guarantor
under the Notes, the Subsidiary Guarantee, or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
15 AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16 ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
17 ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the A/B
Exchange Registration Rights Agreement dated as of March 31, 1998, between the
Company, the Guarantors and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18 CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
19 SUBORDINATION. Payment of principal, premium, if any,
and interest and Liquidated Damages, if any, on the Notes is subordinated to the
prior payment in full of Senior Debt on the terms provided in the Indenture.
<PAGE>
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
Telephone No.: (716) 689-5400
Telecopier No.: (716) 689-5598
Attention: Corporate Secretary
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
_______________________________________________________________________________
Date: _______________
Your Signature:__________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
- --------------------------------
NOTICE: Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Bond Registrar which requirements will include
membership or participation in the Securities Transfer Agents Medallion Program
or such other "signature guarantee program" as may be determined by the Bond
Registrar in addition to, or in substitution for, the Securities Transfer Agents
Medallion Program, all in accordance with the Securities Exchange Act of 1934,
as amended.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate
box below:
_ _
[_] Section 4.10 [_] Section 4.15
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state
the amount you elect to have purchased: $___________
- -------------------------------------------------------------------------------
Date: _____________ Your Signature:_______________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:_______________________
Signature Guarantee.
- --------------------------------
NOTICE: Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Bond Registrar which requirements will include
membership or participation in the Securities Transfer Agents Medallion Program
or such other "signature guarantee program" as may be determined by the Bond
Registrar in addition to, or in substitution for, the Securities Transfer Agents
Medallion Program, all in accordance with the Securities Exchange Act of 1934,
as amended.
<PAGE>
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S
Temporary Global Note for an interest in another Global Note, or of other
Restricted Global Notes for an interest in this Regulation S Temporary Global
Note, have been made:
Principal Amount
Amount of Amount of of this Signature of
decrease in increase in Global Note authorized
Principal Amount Principal Amount following such officer
of this of this decrease (or of Trustee or
Date of Exchange Global Note Global Note increase) Note Custodian
- ---------------- -------------- --------------- --------------- --------------
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
State Street Bank and Trust Company, N.A.
61 Broadway, 15th Floor
New York, New York 10006
Re: [SERIES A] [SERIES B] 8 1/2% SENIOR SUBORDINATED NOTES DUE 2008
Reference is hereby made to the Indenture, dated as of March
31, 1998 (the "Indenture"), between Columbus McKinnon Corporation as issuer (the
"Company"), and State Street Bank and Trust Company, N.A., as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
______________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
RULE 144A. The Transfer is being effected pursuant to and in
accordance with Rule 144A under the United States Securities Act
of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest
or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the
beneficial interest or Definitive Note for its own account, or for
one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A
Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
2. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION
S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule
903 or Rule 904 under the Securities Act and, accordingly, the
Transferor hereby further certifies that (i) the Transfer is not
being made to a person in the United States and (x) at the time
the buy order was originated, the Transferee was outside the
United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its
behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made
in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S under the Securities Act, (iii) the transaction is
not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note, the Temporary
Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted
Global Notes and Restricted Definitive Notes and pursuant to and
in accordance with the Securities Act and any applicable blue sky
securities laws of any state of the United States, and accordingly
the Transferor hereby further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [_] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) [_] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel provided by the Transferor or the Transferee (a copy of
which the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Definitive
Notes and in the Indenture and the Securities Act.
4. [_] Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Note or of an Unrestricted
Definitive Note.
(a) [_] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [_] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [_] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
___________________________
[Insert Name of Transferor]
By:_______________________
Name:
Title:
Dated:_______,___
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (A) OR (B)]
(A) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP_____), or
(ii) [_] Regulation S Global Note (CUSIP_____), or
(iii) [_] a Restricted Definitive Note.
(B) After the Transfer the Transferee will hold:
[CHECK ONE]
(i) [_] a beneficial interest in the:
(a) [_] 144A Global Note (CUSIP_____), or
(b) [_] Regulation S Global Note (CUSIP_____), or
(c) [_] Unrestricted Global Note (CUSIP_____); or
(ii) [_] a Restricted Definitive Note; or
(iii) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
State Street Bank and Trust Company, N.A.
61 Broadway, 15th Floor
New York, New York 10006
Re: [SERIES A] [SERIES B] 8 1/2% SENIOR SUBORDINATED NOTES DUE 2008
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of March
31, 1998 (the "Indenture"), between Columbus McKinnon Corporation, as issuer
(the "Company"), and State Street Bank and Trust Company, N.A., as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the Regulation S Global Note, with an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company.
______________________________
[Insert Name of Owner]
By: _______________________________
Name:
Title:
Dated: ________________, ____
<PAGE>
EXHIBIT D
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture dated as of March 31, 1998 (the "Indenture")
among Columbus McKinnon Corporation, the Guarantors listed on the signature
pages thereto and State Street Bank and Trust Company, N.A., as trustee (the
"Trustee"), (a) the due and punctual payment of the principal of, premium, if
any, and interest on the Notes (as defined in the Indenture), whether at
maturity, by acceleration, redemption or otherwise, the due and punctual payment
of interest on overdue principal and premium, and, to the extent permitted by
law, interest, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee all in accordance with the terms of
the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. The
obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
in Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; provided, however, that the Indebtedness evidenced by
this Subsidiary Guarantee shall cease to be so subordinated and subject in right
of payment upon any defeasance of this Note in accordance with the provisions of
the Indenture. Payment of principal, premium, if any, and interest and
Liquidated Damages, if any, on the Subsidiary Guarantee is subordinated to the
prior payment in full of Senior Debt on the terms provided in the Indenture.
[Name of Guarantor(s)]
By: ________________________________
Name:
Title:
<PAGE>
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of ________________, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of Columbus McKinnon Corporation (or its permitted
successor), a New York corporation (the "Company"), the Company, the other
Guarantors (as defined in the Indenture referred to herein) and State Street
Bank and Trust Company, N.A., as trustee under the indenture referred to below
(the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture (the "Indenture"), dated as of March 31, 1998 providing
for the issuance of an aggregate principal amount of up to $300.0 million of 8
1/2% Senior Subordinated Notes due 2008 (the "Notes");
WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary
shall unconditionally guarantee all of the Company's Obligations under the Notes
and the Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a
Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of
the Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that:
(i) the principal of and interest on the Notes
will be promptly paid in full when due,
whether at maturity, by acceleration,
redemption or otherwise, and interest on the
overdue principal of and interest on the
Notes, if any, if lawful, and all other
obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in
accordance with the terms hereof and
thereof; and
(ii) in case of any extension of time of payment
or renewal of any Notes or any of such other
obligations, that same will be promptly paid
in full when due or performed in accordance
with the terms of the extension or renewal,
whether at stated maturity, by acceleration
or otherwise. Failing payment when due of
any amount so guaranteed or any performance
so guaranteed for whatever reason, the
Guarantors shall be jointly and severally
obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or
enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver
or consent by any Holder of the Notes with respect to
any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce
the same or any other circumstance which might
otherwise constitute a legal or equitable discharge
or defense of a guarantor.
(c) The following is hereby waived: diligence
presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of
the Company, any right to require a proceeding first
against the Company, protest, notice and all demands
whatsoever.
(d) This Subsidiary Guarantee shall not be discharged
except by complete performance of the obligations
contained in the Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court
or otherwise to return to the Company, the
Guarantors, or any Custodian, Trustee, liquidator or
other similar official acting in relation to either
the Company or the Guarantors, any amount paid by
either to the Trustee or such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to
any right of subrogation in relation to the Holders
in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture
for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such
obligations as provided in Article 6 of the
Indenture, such obligations (whether or not due and
payable) shall forthwith become due and payable by
the Guarantors for the purpose of this Subsidiary
Guarantee.
(h) The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as
the exercise of such right does not impair the rights
of the Holders under the Subsidiary Guarantee.
(i) Notwithstanding the foregoing, in the event that this
Subsidiary Guarantee would constitute or result in a
violation of any applicable fraudulent conveyance or
similar law of any relevant jurisdiction, the
liability of the Guarantor under this Supplemental
Indenture and its Subsidiary Guarantee shall be
reduced to the maximum amount permissible under such
fraudulent conveyance or similar law.
3. SUBORDINATION. Payment of principal, premium, if any, and
interest and Liquidated Damages, if any, on the Subsidiary Guarantee is
subordinated to the prior payment in full of Senior Debt on the terms provided
in the Indenture.
4. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
5. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) The Guaranteeing Subsidiary may not consolidate with
or merge with or into (whether or not such Guarantor
is the surviving Person) another corporation, Person
or entity whether or not affiliated with such
Guarantor unless:
(i) subject to Section 11.05 of the Indenture,
the Person formed by or surviving any such
consolidation or merger (if other than a
Guarantor or the Company) unconditionally
assumes all the obligations of such
Guarantor, pursuant to a supplemental
indenture in form and substance reasonably
satisfactory to the Trustee, under the
Notes, the Indenture and the Subsidiary
Guarantee on the terms set forth herein or
therein; and
(ii) immediately after giving effect to such
transaction, no Default or Event of Default
exists.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor
corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to
the Trustee, of the Subsidiary Guarantee endorsed
upon the Notes and the due and punctual performance
of all of the covenants and conditions of the
Indenture to be performed by the Guarantor, such
successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as
if it had been named herein as a Guarantor. Such
successor corporation thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be
endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the
Company and delivered to the Trustee. All the
Subsidiary Guarantees so issued shall in all respects
have the same legal rank and benefit under the
Indenture as the Subsidiary Guarantees theretofore
and thereafter issued in accordance with the terms of
the Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the
execution hereof.
(c) Except as set forth in Articles 4 and 5 of the
Indenture, and notwithstanding clauses (a) and (b)
above, nothing contained in the Indenture or in any
of the Notes shall prevent any consolidation or
merger of a Guarantor with or into the Company or
another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the
Company or another Guarantor.
6. RELEASES.
(a) In the event of a sale or other disposition of all of
the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other
disposition of all of the capital stock of any
Guarantor, then such Guarantor (in the event of a
sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital
stock of such Guarantor) or the corporation acquiring
the property (in the event of a sale or other
disposition of all or substantially all of the assets
of such Guarantor) will be released and relieved of
any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other
disposition are applied in accordance with the
applicable provisions of the Indenture, including
without limitation, Section 4.10 of the Indenture.
Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was
made by the Company in accordance with the provisions
of the Indenture, including without limitation
Section 4.10 of the Indenture, the Trustee shall
execute any documents reasonably required in order to
evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under
its Subsidiary Guarantee shall remain liable for the
full amount of principal of and interest on the Notes
and for the other obligations of any Guarantor under
the Indenture as provided in Article 11 of the
Indenture.
7. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.
8. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
9. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
10. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
11. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated: _______________, ____
[Guaranteeing Subsidiary]
By: _________________________________
Name:
Title:
COLUMBUS McKINNON CORPORATION
By: _________________________________
Name:
Title:
[EXISTING GUARANTORS]
By: ______________________________
Name:
Title
STATE STREET BANK AND TRUST COMPANY, N.A.
as Trustee
By: ______________________________
Name:
Title:
A/B EXCHANGE
REGISTRATION RIGHTS AGREEMENT
Dated as of March 31, 1998
by and among
COLUMBUS MCKINNON CORPORATION,
THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO
and
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of March 31, 1998, by and among Columbus McKinnon Corporation, a
New York corporation (the "Company"), the guarantors named on the signature
pages hereto (the "Guarantors") and Bear, Stearns & Co. Inc. and Goldman, Sachs
& Co. (each an "Initial Purchaser" and, collectively, the "Initial Purchasers"),
each of whom has agreed to purchase the Company's 8 1/2% Series A Senior
Subordinated Notes due 2008 (the "Series A Notes") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated March
26, 1998, (the "Purchase Agreement"), by and among the Company, the Guarantors
and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Series A Notes, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the obligations of the Initial Purchasers set forth in Section
8 of the Purchase Agreement. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to them the Indenture, dated March 31,
1998, between the Company, the Guarantors and State Street Bank and Trust
Company, N.A., as Trustee, relating to the Series A Notes and the Series B Notes
(the "Indenture").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144 of the Act.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Certificated Securities: Definitive Notes, as defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b)
the maintenance of such Exchange Offer Registration Statement
continuously effective and the keeping of the Exchange Offer open for a
period not less than the period required pursuant to Section 3(b) hereof
and (c) the delivery by the Company to the Registrar under the Indenture
of Series B Notes in the same aggregate principal amount as the
aggregate principal amount of Series A Notes tendered by Holders thereof
pursuant to the Exchange Offer.
Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The exchange and issuance by the Company of a principal
amount of Series B Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding
principal amount of Series A Notes that are tendered by such Holders in
connection with such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act and pursuant to
Regulation S under the Act.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Series B Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case,
(i) that is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Regulation S: Regulation S promulgated under the Act.
Restricted Broker-Dealer: Any Broker-Dealer that holds Series B Notes
that were acquired in the Exchange Offer in exchange for Series A Notes
that such Broker-Dealer acquired for its own account as a result of
market making activities or other trading activities (other than Series
A Notes acquired directly from the Company or any of its affiliates).
Rule 144: Rule 144 promulgated under the Act.
Series B Notes: The Company's 8 1/2% Series B Senior Subordinated Notes
due 2008 to be issued pursuant to the Indenture: (i) in the Exchange
Offer or (ii) as contemplated by Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
Suspension Notice: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur of
(a) the date on which such Note is exchanged in the Exchange Offer and entitled
to be resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Act, (b) the date on which such Note has
been disposed of in accordance with a Shelf Registration Statement, (c) the date
on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Note is distributed to the public pursuant to Rule 144 under the Act.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (each, a
"Holder") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable federal
law (after the procedures set forth in Section 6(a)(i) below have been complied
with), the Company and the Guarantors shall (i) cause the Exchange Offer
Registration Statement to be filed with the Commission as soon as practicable
after the Closing Date (the "Exchange Offer Filing Date"), but in no event later
than 60 days after the Closing Date (such 60th day being the "Filing Deadline"),
(ii) use its best efforts to cause such Exchange Offer Registration Statement to
become effective at the earliest possible time, but in no event later than 120
days after the Closing Date (such 120th day being the "Effectiveness Deadline"),
(iii) in connection with the foregoing, (A) file all pre-effective amendments to
such Exchange Offer Registration Statement as may be necessary in order to cause
it to become effective, (B) file, if applicable, a post-effective amendment to
such Exchange Offer Registration Statement pursuant to Rule 430A under the Act
and (C) cause all necessary filings, if any, in connection with the registration
and qualification of the Series B Notes to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange
Offer, and (iv) upon the effectiveness of such Exchange Offer Registration
Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall
be on the appropriate form permitting registration of the Series B Notes to be
offered in exchange for the Series A Notes that are Transfer Restricted
Securities and to permit resales of Series B Notes by Broker-Dealers that
tendered into the Exchange Offer for Series A Notes that such Broker-Dealer
acquired for its own account as a result of market making activities or other
trading activities (other than Series A Notes acquired directly from the Company
or any of its Affiliates) as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective best efforts
to cause the Exchange Offer Registration Statement to be effective continuously,
and shall keep the Exchange Offer open for a period of not less than the minimum
period required under applicable federal and state securities laws to Consummate
the Exchange Offer; provided, however, that in no event shall such period be
less than 20 Business Days. The Company and the Guarantors shall cause the
Exchange Offer to comply with all applicable federal and state securities laws.
No securities other than the Series B Notes shall be included in the Exchange
Offer Registration Statement. The Company and the Guarantors shall use their
respective best efforts to cause the Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Registration Statement has
become effective, but in no event later than 30 Business Days thereafter.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Transfer Restricted
Securities acquired directly from the Company or any Affiliate of the Company),
may exchange such Transfer Restricted Securities pursuant to the Exchange Offer;
however, such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer and that the
Prospectus contained in the Exchange Offer Registration Statement may be used to
satisfy such prospectus delivery requirement. Such "Plan of Distribution"
section shall also contain all other information with respect to such sales by
such Broker-Dealers that the Commission may require in order to permit such
sales pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Transfer Restricted Securities held by
any such Broker-Dealer, except to the extent required by the Commission as a
result of a change in policy, rules or regulations after the date of this
Agreement. See the Shearman & Sterling no-action letter (available July 2,
1993).
To the extent necessary to ensure that the Exchange Offer Registration
Statement is available for sales of Series B Notes by Broker-Dealers, the
Company and the Guarantors agree to use their respective best efforts to keep
the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the date on which the Exchange Offer is Consummated, or
such shorter period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold pursuant thereto. The
Company and the Guarantors shall promptly provide sufficient copies of the
latest version of such Prospectus to such Broker-Dealers promptly upon request,
and in no event later than one day after such request, at any time during such
period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law (after the Company and the Guarantors have complied with the
procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of Transfer
Restricted Securities shall notify the Company within 20 Business Days following
the Consummation of the Exchange Offer that (A) such Holder was prohibited by
law or Commission policy from participating in the Exchange Offer or (B) such
Holder may not resell the Series B Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer and holds Series A
Notes acquired directly from the Company or any of its Affiliates, then the
Company and the Guarantors shall:
(x) cause to be filed, on or prior to 45 days after the earlier of (i) the
date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Company receives the notice specified in clause (a) (ii) above,
(such earlier date, the "Filing Deadline"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement (the "Shelf Registration Statement")), relating to
all Transfer Restricted Securities, and
(y) shall use their respective best efforts to cause such Shelf Registration
Statement to become effective on or prior to 120 days after the Filing Deadline
(such 120th day the "Effectiveness Deadline").
If, after the Company has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law, then the filing of
the Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the Company
shall remain obligated to meet the Effectiveness Deadline set forth in clause
(y).
The Company and the Guarantors shall use their respective best efforts to
keep any Shelf Registration Statement required by this Section 4(a) continuously
effective, supplemented and amended as required by and subject to the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a), and to ensure that it conforms
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)) following the date on
which such Shelf Registration Statement first becomes effective under the Act,
or such shorter period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with the Shelf
Registration Statement. No Holder of Transfer Restricted Securities may include
any of its Transfer Restricted Securities in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes to the Company
in writing, within 20 days after receipt of a request therefor, the information
specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for
use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to liquidated damages pursuant to Section 5 hereof
unless and until such Holder shall have provided all such information. Each
selling Holder agrees to promptly furnish additional information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (ii) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (iii) the Exchange Offer has not
been Consummated within 45 Business Days after the Exchange Offer Registration
Statement is first declared effective by the Commission or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective immediately (each such event referred to in clauses (i) through (iv),
a "Registration Default "), then the Company and the Guarantors hereby jointly
and severally agree to pay to each Holder of Transfer Restricted Securities
affected thereby liquidated damages in an amount equal to $0.05 per week per
$1,000 in principal amount of Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues for the
first 90-day period immediately following the occurrence of such Registration
Default. The amount of the liquidated damages shall increase by an additional
$0.05 per week per $1,000 in principal amount of Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of liquidated damages of $0.50 per week
per $1,000 in principal amount of Transfer Restricted Securities; provided that
the Company and the Guarantors shall in no event be required to pay liquidated
damages for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall comply with all applicable
provisions of Section 6(c) below, shall use their respective best efforts to
effect such exchange and to permit the resale of Series B Notes by
Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and shall comply
with all of the following provisions:
(i) If, following the date hereof there has been announced a change
in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the Company
raises a substantial question as to whether the Exchange Offer is
permitted by applicable federal law, the Company and the Guarantors
hereby agree to seek a no-action letter or other favorable decision from
the Commission allowing the Company to Consummate an Exchange Offer for
such Transfer Restricted Securities. The Company and the Guarantors
hereby agree to pursue the issuance of such a decision to the Commission
staff level. In connection with the foregoing, the Company and the
Guarantors hereby agree to take all such other actions as may be
requested by the Commission or otherwise required in connection with the
issuance of such decision, including without limitation (A)
participating in telephonic conferences with the Commission, (B)
delivering to the Commission staff an analysis prepared by counsel to
the Company setting forth the legal bases, if any, upon which such
counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursuing a resolution (which need not be favorable)
by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker Dealer) shall furnish, upon the request of
the Company, prior to the Consummation of the Exchange Offer, a written
representation to the Company and the Guarantors (which may be contained
in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an Affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate
in, a distribution of the Series B Notes to be issued in the Exchange
Offer and (C) it is acquiring the Series B Notes in its ordinary course
of business. Each Holder using the Exchange Offer to participate in a
distribution of the Series B Notes hereby acknowledges and agrees that,
if the resales are of Series B Notes obtained by such Holder in exchange
for Series A Notes acquired directly from the Company or an Affiliate
thereof, it (1) could not, under Commission policy as in effect on the
date of this Agreement, rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and
Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters (including, if applicable, any
no-action letter obtained pursuant to clause (i) above), and (2) must
comply with the registration and prospectus delivery requirements of the
Act in connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and, if applicable, any no-action letter obtained pursuant to
clause (i) above, (B) including a representation that neither the
Company nor the Guarantors has entered into any arrangement or
understanding with any Person to distribute the Series B Notes to be
received in the Exchange Offer and that, to the best of the Company's
and each Guarantor's information and belief, each Holder participating
in the Exchange Offer is acquiring the Series B Notes in its ordinary
course of business and has no arrangement or understanding with any
Person to participate in the distribution of the Series B Notes received
in the Exchange Offer and (C) any other undertaking or representation
required by the Commission as set forth in any no-action letter obtained
pursuant to clause (i) above, if applicable.
(b) Shelf Registration Statement. In connection with the Shelf Registration
Statement, the Company and the Guarantors shall comply with all the provisions
of Section 6(c) below and shall use their respective best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to Section 4(b)
hereof), and pursuant thereto the Company and the Guarantors will prepare and
file with the Commission a Registration Statement relating to the registration
on any appropriate form under the Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof within the time periods and otherwise
in accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement, the Company and the
Guarantors shall:
(i) use their respective best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this Agreement,
as applicable. Upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective
and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company and the Guarantors shall
file promptly an appropriate amendment to such Registration Statement
curing such defect, and, if Commission review is required, use their
respective best efforts to cause such amendment to be declared effective
as soon as practicable.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may
be; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise the selling Holders promptly and, if requested by such
Persons, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any applicable Registration Statement or any
post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to
make the statements therein not misleading, or that requires the making
of any additions to or changes in the Prospectus in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement,
or any state securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company and the Guarantors shall use
their respective best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event contemplated
by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(v) furnish to the Initial Purchaser(s) and each selling Holder
named in any Registration Statement or Prospectus in connection with
such sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders in connection with
such sale, if any, for a period of at least five Business Days, and the
Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which the selling Holders of the Transfer Restricted Securities covered
by such Registration Statement in connection with such sale, if any,
shall reasonably object within five Business Days after the receipt
thereof. A selling Holder shall be deemed to have reasonably objected to
such filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission or fails to comply with the applicable
requirements of the Act;
(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders in connection
with such sale, if any, make the Company's and the Guarantors'
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders may
reasonably request;
(vii) make available at reasonable times for inspection by the
selling Holders participating in any disposition pursuant to such
Registration Statement and any attorney or accountant retained by such
selling Holders, all financial and other records, pertinent corporate
documents of the Company and the Guarantors and cause the Company's and
the Guarantors' officers, directors and employees to supply all
information reasonably requested by any such selling Holder, attorney or
accountant in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness;
(viii) if requested by any selling Holders in connection with such
sale, if any, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders may reasonably
request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(ix) furnish to each selling Holder in connection with such sale, if
any, without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto,
including all documents incorporated by reference therein and all
exhibits (including exhibits incorporated therein by reference);
(x) deliver to each selling Holder, without charge, as many copies
of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request;
the Company and the Guarantors hereby consent to the use (in accordance
with law) of the Prospectus and any amendment or supplement thereto by
each of the selling Holders in connection with the offering and the sale
of the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(xi) upon the request of any selling Holder, enter into such
agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder of Transfer Restricted Securities in
connection with any sale or resale pursuant to any applicable
Registration Statement and in such connection, the Company and the
Guarantors shall:
(A) upon request of any selling Holder, furnish (or in the case
of paragraphs (2) and (3), use its best efforts to cause to be
furnished) to each selling Holder, upon the effectiveness of the
Shelf Registration Statement or upon Consummation of the Exchange
Offer, as the case may be:
(1) a certificate, dated such date, signed on behalf of the
Company and each Guarantor by (x) the President or any Vice
President and (y) a principal financial or accounting officer of
the Company and such Guarantor, confirming, as of the date
thereof, the matters set forth in paragraphs (a) through (d) of
Section 8 of the Purchase Agreement and such other similar
matters as the selling Holders may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer, or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors covering matters similar to those set
forth in paragraph (f) of Section 8 of the Purchase Agreement
and such other matter as the selling Holders may reasonably
request, and in any event including a statement to the effect
that such counsel has participated in conferences with officers
and other representatives of the Company and the Guarantors,
representatives of the independent public accountants for the
Company and the Guarantors and have considered the matters
required to be stated therein and the statements contained
therein, although such counsel has not independently verified
the accuracy, completeness or fairness of such statements; and
that such counsel advises that, on the basis of the foregoing,
no facts came to such counsel's attention that caused such
counsel to believe that the applicable Registration Statement,
at the time such Registration Statement or any post-effective
amendment thereto became effective and, in the case of the
Exchange Offer Registration Statement, as of the date of
Consummation of the Exchange Offer, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date and, in
the case of the opinion dated the date of Consummation of the
Exchange Offer, as of the date of Consummation, contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading. Without limiting the foregoing, such counsel may
state further that such counsel assumes no responsibility for,
and has not independently verified, the accuracy, completeness
or fairness of the financial statements, notes and schedules and
other financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 8(g) of the
Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with clause (A) above and with any customary conditions contained in
the any agreement entered into by the Company and the Guarantors
pursuant to this clause (xi);
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that neither the
Company nor any Guarantor shall be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any
action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xiii) issue, upon the request of any Holder of Series A Notes
covered by any Shelf Registration Statement contemplated by this
Agreement, Series B Notes having an aggregate principal amount equal to
the aggregate principal amount of Series A Notes surrendered to the
Company by such Holder in exchange therefor or being sold by such
Holder; such Series B Notes to be registered in the name of such Holder
or in the name of the purchaser(s) of such Series B Notes, as the case
may be; in return, the Series A Notes held by such Holder shall be
surrendered to the Company for cancellation;
(xiv) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the selling Holders to facilitate the timely
preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the selling Holders may request at least
two Business Days prior to such sale of Transfer Restricted Securities;
(xv) use their respective best efforts to cause the disposition of
the Transfer Restricted Securities covered by the Registration Statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
to consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xii) above;
(xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of a Registration Statement covering
such Transfer Restricted Securities and provide the Trustee under the
Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository
Trust Company;
(xvii) otherwise use their respective best efforts to comply with
all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xviii) make appropriate officers of the Company available to the
selling Holders for meetings with prospective purchasers of the Transfer
Restricted Securities and prepare and present to potential investors
customary "road show" material in a manner consistent with other new
issuances of other securities similar to the Transfer Restricted
Securities; and
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement and, in connection therewith, cooperate with the Trustee
and the Holders to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute and use its best efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely
manner; and
(xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a Transfer
Restricted Security that, upon receipt of the notice referred to in Section
6(c)(i) or any notice from the Company of the existence of any fact of the kind
described in Section 6(c)(iii)(D) hereof (in each case, a "Suspension Notice"),
such Holder will forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until (i) such
Holder's has received copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is advised in
writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus (in each case, the "Recommencement Date"). Each
Holder receiving a Suspension Notice hereby agrees that it will either (i)
destroy any Prospectuses, other than permanent file copies, then in such
Holder's possession which have been replaced by the Company with more recently
dated Prospectuses or (ii) deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession of
the Prospectus covering such Transfer Restricted Securities that was current at
the time of receipt of the Suspension Notice. The time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by a number of days equal to the number of days
in the period from and including the date of delivery of the Suspension Notice
to the date of delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors' performance
of or compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
Series B Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Company, the Guarantors and the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing the Series B Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company and the
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this Agreement
(including, without limitation, the Exchange Offer Registration Statement and
the Shelf Registration Statement), the Company and the Guarantors will reimburse
the Purchasers and the Holders of Transfer Restricted Securities being tendered
in the Exchange Offer and/or resold pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or registered pursuant to
the Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins,
unless another firm shall be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless (i) each Holder, (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) any Holder (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an " Indemnified Holder") to the
fullest extent lawful, from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement, preliminary
prospectus or Prospectus (or any amendment or supplement thereto) provided by
the Company to any Holder or any prospective purchaser of Series B Notes, or
arise out of or are based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company and the Guarantors
will not be liable in any such case to the extent, but only to the extent, that
any such losses, liabilities, claims, damages or expenses are caused by an
untrue statement or omission or alleged untrue statement or omission that is
based upon information relating to any of the Holders furnished in writing to
the Company by any of the Holders expressly for use therein; and provided
further that with respect to any such untrue statement or omission made in the
preliminary prospectus, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of such Indemnified Holder who sold the Transfer
Restricted Securities to such person asserting any such loss, liability, claim,
damage or expense, to the extent that such sale was an initial resale by the
Indemnified Holder and any such loss, liability, claim, damage or expense of the
Indemnified Holder is a result of the fact that both (i) a copy of the
Prospectus was not sent or given to such person prior to, concurrently with or
promptly following the sale of such Transfer Restricted Securities to such
person, and (ii) the untrue statement or omission in the preliminary prospectus
was corrected in the Prospectus unless, in either case, such failure to deliver
the Prospectus was a result of non-compliance by the Company or the Guarantors
with Section 6 of this Agreement. The foregoing indemnity is in addition to any
liability which the Company or the Guarantors may otherwise have to any
Indemnified Holder.
(b) Each Holder of Transfer Restricted Securities agrees, severally and not
jointly, to indemnify and hold harmless (i) the Company and the Guarantors, (ii)
each person, if any, who controls the Company and the Guarantors within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and (iii)
the officers, directors, partners, employees, representatives and agents of the
Company and the Guarantors, to the same extent as the foregoing indemnity from
the Company to each of the Indemnified Holders, but only with reference to
information relating to such Indemnified Holder furnished in writing to the
Company by such Indemnified Holder expressly for use in any Registration
Statement. In no event shall any Indemnified Holder be liable or responsible for
any amount in excess of the amount by which the total amount received by such
Indemnified Holder with respect to its sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such
Indemnified Holder for such Transfer Restricted Securities and (ii) the amount
of any damages that such Indemnified Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. The foregoing indemnity is in addition to any liability which the
Indemnified Holder may otherwise have to the Company or the Guarantors.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action, (ii) the indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of counsel
shall be borne by the indemnifying parties; provided, however, that the
indemnifying party under subsection (a) or (b) above shall only be liable for
the legal expenses of one counsel (in addition to any local counsel) for all
indemnified parties in each jurisdiction in which any claim or action is
brought. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or action
effected without its prior written consent, provided that such consent was not
unreasonably withheld.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in Section 8 is for any reason held to be
unavailable from the Company and the Guarantors is insufficient to hold harmless
a party indemnified thereunder, the Company and the Guarantors, on the one hand,
and each Holder, on the other hand, shall contribute to the aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claims asserted, but after deducting in
the case of losses, claims, damages, liabilities and expenses suffered by the
Company and the Guarantors, any contribution received by the Company and the
Guarantors from persons, other than the Holders, who may also be liable for
contribution, including persons who control the Company and the Guarantors
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act) to which the Company, the Guarantors and such Holder may be subject, in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Guarantors, on one hand, and such Holder, on the other hand,
from the sale of Transfer Restricted Securities or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in this Section 8,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Guarantors,
on one hand, and such Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company and the Guarantors, on one hand, and of each
Holder, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Guarantors or a Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Guarantors and the Holders agree
that it would not be just and equitable if contribution pursuant to this Section
8 were determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8, no Holder or its related
Indemnified Holders shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total received by such Holder with
respect to the sale of its Transfer Restricted Securities pursuant to a
Registration Statement exceeds the sum of (A) the amount paid by such Holder for
such Transfer Restricted Securities plus (B) the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective principal amount
of Transfer Restricted Securities held by each of the Holders hereunder and not
joint.
SECTION 9. RULE 144A
The Company and each Guarantor hereby agrees with each Holder, for so long
as any Transfer Restricted Securities remain outstanding and during any period
in which the Company or such Guarantor is not subject to Section 13 or 15(d) of
the Securities Exchange Act, to make available, upon request of any Holder of
Transfer Restricted Securities, to any Holder or beneficial owner of Transfer
Restricted Securities in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted Securities designated by such Holder or
beneficial owner, the information required by Rule 144A(d)(4) under the Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144A.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors acknowledge and agree that any
failure by the Company and/or the Guarantors to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no
adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the
Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Company's and the Guarantors' obligations under
Sections 3 and 4 hereof. The Company and the Guarantors further agree to
waive the defense in any action for specific performance that a remedy at
law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any Guarantor will, on
or after the date of this Agreement, enter into any agreement with respect
to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any
agreement granting any registration rights with respect to its securities to
any Person. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the
holders of the Company's and the Guarantors' securities under any agreement
in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(d)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted Securities and
(ii) in the case of all other provisions hereof, the Company has obtained
the written consent of Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities (excluding Transfer Restricted
Securities held by the Company of its Affiliates). Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being
tendered pursuant to the Exchange Offer and that does not affect directly or
indirectly the rights of other Holders whose securities are not being
tendered pursuant to such Exchange Offer may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted
Securities subject to such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party beneficiaries to
the agreements made hereunder between the Company and the Guarantors, on the
one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company or the Guarantors:
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
Telecopier No.: (716) 689-5598
Attention: Corporate Secretary
With a copy to:
Lippes, Silverstein, Mathias & Wexler
7th Floor, 700 Guaranty Building
28 Church Street
Buffalo, New York 14202-3950
Telecopier No.: (716) 853-5199
Attention: Robert J. Olivieri, Esq.
All such notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf Registration
Statement, as the case may be, notice shall be delivered to Bear, Stearns & Co.
Inc., on behalf of the Initial Purchasers (in the form attached hereto as
Exhibit A) and shall be addressed to: Attention: James B. Nish, 245 Park Avenue,
New York, New York 10167.
(f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, that nothing
herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms
hereof or of the Purchase Agreement or the Indenture. If any transferee of
any Holder shall acquire Transfer Restricted Securities in any manner,
whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and
by taking and holding such Transfer Restricted Securities such Person shall
be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase
Agreement, and such Person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights
granted with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
[Signature page to follow]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COLUMBUS MCKINNON CORPORATION
By:_________________________________
Name:
Title:
YALE INDUSTRIAL PRODUCTS, INC.
By:___________________________________
Name:
Title:
MECHANICAL PRODUCTS, INC.
By:___________________________________
Name:
Title:
MINITEC CORPORATION
By:___________________________________
Name:
Title:
<PAGE>
Accepted and agreed to as of the date first above written:
BEAR, STEARNS & CO. INC.
By:__________________________
Name:
Title:
GOLDMAN, SACHS & CO.
By:__________________________
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: James B. Nish
Fax: (212) 272-3092
From: Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
Telecopier No.: (716) 689-5598
Attention: Corporate Secretary
Re: 8 1/2% Senior Subordinated Notes due 2008
Date: __________, 1998
For your information only (NO ACTION REQUIRED):
Today, ______, 1998, we filed [an A/B Exchange Registration Statement/a
Shelf Registration Statement] with the Securities and Exchange
Commission. We currently expect this registration statement to be
declared effective within __ business days of the date hereof.
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated
as of March 31, 1998, among LICO, Inc., a Missouri corporation, Automatic
Systems, Inc., a Missouri corporation, and LICO Steel, Inc., a Missouri
corporation (each a "GUARANTEEING SUBSIDIARY" and together the " GUARANTEEING
SUBSIDIARIES"), subsidiaries of Columbus McKinnon Corporation (or its permitted
successor), a New York corporation (the "COMPANY"), the Company, the other
Guarantors (as defined in the Indenture referred to herein) and State Street
Bank and Trust Company, N.A., as trustee under the indenture referred to below
(the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture (the "INDENTURE"), dated as of March 31, 1998 providing
for the issuance of an aggregate principal amount of up to $300.0 million of 8
1/2% Senior Subordinated Notes due 2008 (the "NOTES");
WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiaries shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries
shall unconditionally guarantee all of the Company's Obligations under the Notes
and the Indenture on the terms and conditions set forth herein (each a
"SUBSIDIARY GUARANTEE" and together the "SUBSIDIARY GUARANTEES"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the
Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiaries
hereby agree as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a
Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of
the Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that:
(i) the principal of and interest on the Notes
will be promptly paid in full when due,
whether at maturity, by acceleration,
redemption or otherwise, and interest on the
overdue principal of and interest on the
Notes, if any, if lawful, and all other
obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in
accordance with the terms hereof and
thereof; and
(ii) in case of any extension of time of payment
or renewal of any Notes or any of such other
obligations, that same will be promptly paid
in full when due or performed in accordance
with the terms of the extension or renewal,
whether at stated maturity, by acceleration
or otherwise. Failing payment when due of
any amount so guaranteed or any performance
so guaranteed for whatever reason, the
Guarantors shall be jointly and severally
obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or
enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver
or consent by any Holder of the Notes with respect to
any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce
the same or any other circumstance which might
otherwise constitute a legal or equitable discharge
or defense of a guarantor.
(c) The following is hereby waived: diligence
presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of
the Company, any right to require a proceeding first
against the Company, protest, notice and all demands
whatsoever.
(d) These Subsidiary Guarantees shall not be discharged
except by complete performance of the obligations
contained in the Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court
or otherwise to return to the Company, the
Guarantors, or any Custodian, Trustee, liquidator or
other similar official acting in relation to either
the Company or the Guarantors, any amount paid by
either to the Trustee or such Holder, these
Subsidiary Guarantees, to the extent theretofore
discharged, shall be reinstated in full force and
effect.
(f) The Guaranteeing Subsidiaries shall not be entitled
to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations
guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture
for the purposes of these Subsidiary Guarantees,
notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such
obligations as provided in Article 6 of the
Indenture, such obligations (whether or not due and
payable) shall forthwith become due and payable by
the Guarantors for the purpose of these Subsidiary
Guarantees.
(h) The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as
the exercise of such right does not impair the rights
of the Holders under the Subsidiary Guarantees.
(i) Notwithstanding the foregoing, in the event that
these Subsidiary Guarantees would constitute or
result in a violation of any applicable fraudulent
conveyance or similar law of any relevant
jurisdiction, the liability of the Guaranteeing
Subsidiaries under this Supplemental Indenture and
their Subsidiary Guarantees shall be reduced to the
maximum amount permissible under such fraudulent
conveyance or similar law.
3. SUBORDINATION. Payment of principal, premium, if any, and
interest and Liquidated Damages, if any, on the Subsidiary
Guarantees is subordinated to the prior payment in full of
Senior Debt on the terms provided in the Indenture.
4. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Subsidiary Guarantees shall remain in full force and
effect notwithstanding any failure to endorse on each Note a
notation of such Subsidiary Guarantee.
5. GUARANTEEING SUBSIDIARIES MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) The Guaranteeing Subsidiaries, and each of them, may
not consolidate with or merge with or into (whether
or not such Guarantor is the surviving Person)
another corporation, Person or entity whether or not
affiliated with such Guarantor unless:
(i) subject to Section 11.05 of the Indenture,
the Person formed by or surviving any such
consolidation or merger (if other than a
Guarantor or the Company) unconditionally
assumes all the obligations of such
Guarantor, pursuant to a supplemental
indenture in form and substance reasonably
satisfactory to the Trustee, under the
Notes, the Indenture and the Subsidiary
Guarantee on the terms set forth herein or
therein; and
(ii) immediately after giving effect to such
transaction, no Default or Event of Default
exists.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor
corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to
the Trustee, of the Subsidiary Guarantee endorsed
upon the Notes and the due and punctual performance
of all of the covenants and conditions of the
Indenture to be performed by the Guarantor, such
successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as
if it had been named herein as a Guarantor. Such
successor corporation thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be
endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the
Company and delivered to the Trustee. All the
Subsidiary Guarantees so issued shall in all respects
have the same legal rank and benefit under the
Indenture as the Subsidiary Guarantees theretofore
and thereafter issued in accordance with the terms of
the Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the
execution hereof.
(c) Except as set forth in Articles 4 and 5 of the
Indenture, and notwithstanding clauses (a) and (b)
above, nothing contained in the Indenture or in any
of the Notes shall prevent any consolidation or
merger of a Guarantor with or into the Company or
another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the
Company or another Guarantor.
6. RELEASES.
(a) In the event of a sale or other disposition of all of
the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other
disposition of all of the capital stock of any
Guarantor, then such Guarantor (in the event of a
sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital
stock of such Guarantor) or the corporation acquiring
the property (in the event of a sale or other
disposition of all or substantially all of the assets
of such Guarantor) will be released and relieved of
any obligations under its Subsidiary Guarantee;
PROVIDED that the Net Proceeds of such sale or other
disposition are applied in accordance with the
applicable provisions of the Indenture, including
without limitation, Section 4.10 of the Indenture.
Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was
made by the Company in accordance with the provisions
of the Indenture, including without limitation
Section 4.10 of the Indenture, the Trustee shall
execute any documents reasonably required in order to
evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under
its Subsidiary Guarantee shall remain liable for the
full amount of principal of and interest on the Notes
and for the other obligations of any Guarantor under
the Indenture as provided in Article 11 of the
Indenture.
7. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or
agent of each of the Guaranteeing Subsidiaries, as such, shall
have any liability for any obligations of the Company or any
Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or
for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance
of the Notes. Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the
view of the SEC that such a waiver is against public policy.
8. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS
SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
9. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same
agreement.
10. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
11. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture or for or in
respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiaries and
the Company.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: March 31, 1998
LICO, INC.
By: /s/Robert L. Montgomery
Name: Robert L. Montgomery
Title: Treasurer
AUTOMATIC SYSTEMS, INC.
By: /s/Robert L. Montgomery
Name: Robert L. Montgomery
Title: Treasurer
LICO STEEL, INC.
By: /s/Robert L. Montgomery
Name: Robert L. Montgomery
Title: Treasurer
COLUMBUS McKINNON CORPORATION
By: /s/Robert L. Montgomery
Name: Robert L. Montgomery
Title: Executive Vice President
YALE INDUSTRIAL PRODUCTS, INC.
By: /s/Robert L. Montgomery
Name: Robert L. Montgomery
Title: Treasurer
MECHANICAL PRODUCTS, INC.
By: /s/Robert L. Montgomery
Name: Robert L. Montgomery
Title: Treasurer
<PAGE>
MINITEC CORPORATION
By: /s/Robert L. Montgomery
Name: Robert L. Montgomery
Title: Treasurer
STATE STREET BANK AND TRUST COMPANY, N.A.
as Trustee
By: /s/James E. Murphy
Name: James E. Murphy
Title: Vice President
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), dated as of March
11, 1998, is by and among Columbus McKinnon Corporation, a New York corporation
("Buyer"), and the shareholders of LICO, Inc., which shareholders are identified
on the signature page of this Agreement (hereinafter sometimes referred to
individually as "Seller" and collectively as "Sellers").
WHEREAS, Sellers own all of the outstanding voting and
non-voting shares of capital stock of LICO, INC., a Missouri corporation (the
"Company");
WHEREAS, Automatic Systems, Inc., a Missouri corporation
("ASI"), Automatic Systems Conveyors, Ltd., a Canadian company ("AS-Canada"),
ASI of Australia Pty. Ltd., an Australian company ("AS-Australia"), LICO
Conveyor Company, a Missouri corporation ("LICO-Conveyor"), LICO Steel, Inc., a
Missouri Corporation ("LICO-Steel") and LICO International Corporation, a Virgin
Islands corporation ("LICO-International") are wholly-owned subsidiaries of the
Company (hereinafter sometimes referred to individually as "Subsidiary" or
collectively as "Subsidiaries");
WHEREAS, the Company and the Subsidiaries are engaged in the
business of designing, manufacturing, selling, installing and servicing material
handling systems for the automotive, steel and mining industries as well as
other heavy industries and in the business of structural steel erection and
general contracting for construction (collectively, the "Business"); and
WHEREAS, Sellers wish to sell all of the issued and
outstanding voting and non-voting shares of capital stock of the Company (the
"Shares") to Buyer and Buyer wishes to purchase such Shares, all on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
SECTION 1.01. SALE OF STOCK. At the Closing (as defined in
Section 2.01 hereof) and subject to all other terms and conditions of this
Agreement, Sellers will sell, transfer, assign and convey to Buyer free and
clear of all liabilities, liens, pledges, security interests, encumbrances,
claims and
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other restrictions ("Liens") all of the Shares for the price determined in
Section 1.02 hereof.
SECTION 1.02. THE PURCHASE PRICE. In consideration of the sale
by Sellers to Buyer of the Shares and Sellers' performance of this Agreement,
Buyer shall pay to Sellers the aggregate amount equal to ONE HUNDRED FIFTY-FIVE
MILLION DOLLARS AND 00/100 ($155,000,000.00) less the greater of (x) the sum of
$2,183,000 and all costs or expenses paid by the Company or any Subsidiary
relating to or incurred in connection with this Agreement and the transactions
contemplated herein or (y) the Funded Debt (as hereinafter defined) (the
"Purchase Price"). For the purposes of this Agreement, "Funded Debt" shall mean
the sum of: (i) the aggregate amount, as of the Closing Date, of all obligations
of the Company and the Subsidiaries for borrowed money, including any accrual of
unpaid interest, any prepayment penalties which would be payable if the
indebtedness were to be repaid as of the Closing Date, (ii) any outstanding
checks or drafts on ASI's controlled disbursement account which have been
written but not cleared as of the Closing Date and (iii) any outstanding checks
or drafts on other accounts of the Company or the Subsidiaries which have been
written but not cleared as of the the Closing Date and which would, when
presented, create an overdraft on such account. The Purchase Price is subject to
the adjustments provided in Section 1.03 hereof. The Purchase Price as adjusted
shall be allocated among Sellers as specified in SCHEDULE 1.02 hereto. At the
Closing, Buyer shall pay the Purchase Price as follows:
(a) CASH. Buyer's wire transfer of funds to accounts
designated by Sellers in the aggregate amount of the Purchase Price less
$5,000,000.00; and
(b) ESCROW. Buyer's wire transfer of funds to an account
designated by United Missouri Bank, N.A. ("Escrow Agent") in an aggregate amount
of $5,000,000.00 (the "Escrow Amount"), to be held by Escrow Agent pursuant to
the terms and conditions of an escrow agreement ("Escrow Agreement") among
Buyer, Sellers and Escrow Agent in substantially the same form and on the same
terms as SCHEDULE 1.02(B) hereto.
SECTION 1.03. POST CLOSING ADJUSTMENT OF PURCHASE
PRICE.
(a) ADJUSTMENT. The adjustments to the Purchase Price as
provided below shall be made following the Closing. The adjustments will be
computed as follows and shall be cumulative:
(i) The Purchase Price shall be decreased by the
amount, if any, by which the consolidated shareholders' equity of the Company
and the Subsidiaries, as of the Closing Date, computed in accordance with
generally accepted accounting
<PAGE>
- 3 -
principles consistently applied on the same basis as used in the Base Balance
Sheet (as hereinafter defined) is less than $22,000,000.
(ii) The Purchase Price shall be decreased by any
costs or expenses which are incurred but not paid by the Company or the
Subsidiaries prior to or on the Closing Date which relate to or are incurred in
connection with this Agreement and the transactions contemplated hereby.
(b) SETTLEMENT OF ADJUSTMENT. Within sixty (60) days following
the Closing Date, Buyer will deliver to Sellers the proposed adjustments to the
Purchase Price pursuant to Section 1.03(a) as computed by Buyer's accountants.
In the course of Sellers' review of the proposed adjustments, Buyer's
accountants will cooperate fully with Sellers and Sellers' accountants,
including providing access to their work papers relating to the proposed
adjustments. If Sellers within twenty (20) days of receipt of the proposed
adjustments do not object thereto in writing, the proposed adjustments shall
become final and binding on the parties. If Sellers do not agree with the
proposed adjustments, Sellers shall, prior to the expiration of such twenty (20)
day period, deliver to Buyer a written statement of the matters with respect to
which there is disagreement specifying the particulars of the disagreement. If
the parties fail to resolve the disagreements within twenty (20) days
thereafter, the items of disagreement shall be immediately referred to a firm of
independent public accountants of recognized standing which the parties mutually
select or the firm of Arthur Anderson LLP in the event they fail to agree on a
firm, for its determination with respect to such items of disagreement. The
parties will use their best efforts to cause such firm to resolve all items of
disagreement within thirty (30) days after submission and such firm's
determination will be final and binding on the parties. The cost of such
referral and determination shall be borne 50% by Sellers and 50% by Buyer.
(c) PAYMENT OF ADJUSTMENT. Any adjustment to the Purchase
Price shall be settled by a cash payment by Sellers to Buyer which payment shall
include interest thereon at an annual rate of 7% computed from the Closing Date
to the date of payment. Such reduction or payment shall be made by Sellers
within five (5) business days after final determination of the adjustment. The
Representative (hereinafter defined in Section 12.05) shall be responsible for
causing any such cash payment to be made to Buyer as provided herein.
ARTICLE II
CLOSING
<PAGE>
- 4 -
SECTION 2.01 CLOSING. The sale and purchase of the Shares
referred to in Article I hereof shall be consummated at a closing (the
"Closing") to be held at the offices of Phillips, Lytle, Hitchcock, Blaine &
Huber LLP, 3400 Marine Midland Center, Buffalo, New York 14203 on March 31, 1998
at 10:00 a.m. or on a date selected by Buyer (upon reasonable notice to Sellers)
which is not less than three (3) days nor more than thirty (30) days after the
expiration of all applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR Act") unless another date
or place is agreed to in writing by Sellers and Buyer (the "Closing Date").
SECTION 2.02 CLOSING DOCUMENTATION. At the Closing,
(a) Sellers will deliver to Buyer:
(i) the certificates evidencing the Shares duly endorsed in
blank for transfer or with such duly executed stock powers, with Sellers being
responsible for the payment of any applicable stock transfer taxes or similar
taxes;
(ii) the duly executed Escrow Agreement required pursuant to
Section 1.02(b) hereof;
(iii) the duly executed releases required pursuant to Section
8.01(d) hereof;
(iv) the duly executed resignations required pursuant to
Section 8.01(e) hereof;
(v) the duly executed estoppel certificates required pursuant
to Section 8.01(g) hereof;
(vi) if applicable, the evidence of payment and discharge of
Funded Debt (as hereinafter defined) and releases of all security interests on
the assets of the Company and the Subsidiaries securing the Funded Debt pursuant
to Section 8.01(h) hereof;
(vii) the opinion of counsel to Sellers required pursuant to
Section 8.01(c) hereof;
(viii) the duly executed certificates of Sellers required
pursuant to Sections 8.01(a) and (b) hereof;
(ix) the duly executed officers' certificates required
pursuant to Sections 8.01(a) and (b) hereof;
(x) the complete minute and stock books and corporate seals of
the Company and the Subsidiaries;
<PAGE>
- 5 -
(xi) duly executed agreements terminating the Second Amended
and Restated Stock Redemption Agreement dated February 17, 1995, as amended, and
the Cross Purchase Agreement dated February 17, 1995, as amended (collectively,
the "Termination Agreements");
(xii) the duly executed written acknowledgements of the
Related Parties (as hereinafter defined) pursuant to Section 7.7 hereof;
(xiii) the duly executed written guaranties required pursuant
to Section 12.13 hereof; and
(xiv) such other documents as Buyer may reasonably request.
(b) Buyer will deliver to Sellers:
(i) the wire transfer funds constituting the Purchase Price as
required pursuant to Section 1.02 hereof;
(ii) the duly executed Escrow Agreement required pursuant to
Section 1.02(b) hereof;
(iii) the duly executed certificate of Buyer required pursuant
to Sections 9.01(a) and (b) hereof; and
(iv) the opinion of counsel to Buyer required pursuant to
Section 9.01(c) hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLERS
Sellers jointly and severally represent and warrant to Buyer
as follows and confirm that Buyer is relying on the accuracy of each such
representation and warranty in connection with the purchase of the Shares and
completion of the transactions contemplated hereby:
SECTION 3.01 ORGANIZATION. The Company and each of the
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of their respective states or jurisdictions of
incorporation, and has all requisite power and authority, corporate and other,
and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as now and heretofore conducted. The
Company and each of the Subsidiaries is duly qualified or licensed to do
business and in good standing in each jurisdiction in which the property owned,
leased or operated by it or the
<PAGE>
- 6 -
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and in
good standing would not have a material adverse effect on the Company or the
Subsidiaries.
SECTION 3.02 CAPITAL STOCK; SUBSIDIARIES.
(a) As of the date hereof, the authorized capital stock of the
Company consists of (i) 300,000 shares of Class A Voting Common Stock of the
Company with $.10 par value, of which 253,850 shares are issued and outstanding
and 2,400 shares are held in treasury, and (ii) 2,700,000 shares of Class B
Non-Voting Common Stock with $.10 par value, of which 2,284,650 shares are
issued and outstanding and no shares are held in treasury. All of the
outstanding shares of the Company's capital stock are duly authorized, validly
issued, fully paid and non-assessable and, except as set forth on SCHEDULE 3.02
hereto, free of any preemptive or similar rights with respect thereto. SCHEDULE
3.02 hereto sets forth a complete and accurate list showing the record and
beneficial ownership of the outstanding capital stock of the Company including
the percentage of all outstanding shares of each class of capital stock owned by
each owner. There are no bonds, debentures, notes or other indebtedness having
the right to vote (or convertible into securities having the right to vote) on
any matters on which shareholders of the Company may vote ("Voting Debt") issued
or outstanding. There are no options, warrants, calls, subscriptions or other
rights or other agreements or commitments of any character relating to the
issued or unissued capital stock of the Company or obligating the Company to
issue, transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interests in, the Company or
securities convertible into or exchangeable for such shares or equity interests
or obligating the Company to grant, extend or enter into any such option,
warrant, call, subscription or other right, agreement or commitment. Except as
set forth in SCHEDULE 3.02 hereto, there are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares
of capital stock of the Company. Except as set forth in SCHEDULE 3.02 hereto,
all of the Shares listed opposite each Seller's name on SCHEDULE 3.02 hereto are
owned beneficially and of record by such Seller free and clear of any Liens. At
the Closing, each Seller shall effectively transfer to Buyer good and marketable
title to all of the Shares owned by such Seller free and clear of any Liens.
(b) The authorized capital stock and the issued and
outstanding capital stock of each of the Subsidiaries is shown on SCHEDULE 3.02
hereto, and all of the outstanding shares of capital stock of each of the
Subsidiaries have been and are validly issued, fully paid and non-assessable and
free of any preemptive or similar rights with respect thereto, all of which are
owned by the Company free and clear of any Liens, except for
<PAGE>
- 7 -
the outstanding shares of LICO-International, all of which are owned by ASI free
and clear of any liens. There are no bonds, debentures, notes or other
indebtedness having the right to vote (or convertible into securities having the
right to vote) on any matters on which shareholders of the Subsidiaries may vote
("Subsidiary Voting Debt") issued or outstanding. There are no options,
warrants, calls, subscriptions or other rights or other agreements or
commitments of any character relating to any of the issued or issued capital
stock of any of the Subsidiaries or obligating any of the Subsidiaries to issue,
transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Subsidiary Voting Debt of, or other equity interest in, any of
the Subsidiaries or securities convertible into or exchangeable for such shares
or equity interest or obligating any of the Subsidiaries to grant, extend or
enter into any such option, warrant, call, subscription or other right,
agreement or commitment. There are no outstanding contractual obligations of any
of the Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of any of the Subsidiaries. No shares of the capital stock of any
of the Subsidiaries are held as treasury shares (except for ASI, which has 1300
treasury shares). Neither the Company nor any of the Subsidiaries have any
subsidiary or any ownership interest in any business, organization or entity,
except for the Company's interests in the Subsidiaries and ASI's interest in
LICO-International.
SECTION 3.03 AUTHORITY; ENFORCEABILITY. Sellers have the
requisite capacity, power and authority, corporate and other, to execute and
deliver this Agreement and all other agreements, instruments and certificates
contemplated hereby (the "Related Agreements") and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Related Agreements and the consummation of
the transactions contemplated hereby and thereby have been duly and effectively
authorized by all necessary action, corporate and other, on the part of Sellers
and no other acts or proceedings on the part of Sellers are necessary to
authorize this Agreement or the Related Agreements or to consummate the
transactions contemplated hereby and thereby. This Agreement and the Related
Agreements have been duly executed and delivered by Sellers and constitute
legal, valid and binding obligations of Sellers, enforceable against each of
them in accordance with their respective terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors rights and by the availability of
equitable remedies.
SECTION 3.04 NO VIOLATION. Except as contemplated by Section
3.05 hereof, the execution and delivery of this Agreement and the Related
Agreements by Sellers and the consummation of the transactions contemplated
hereby and thereby will not conflict with, or result in any violation of, or
default (with or without
<PAGE>
- 8 -
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a material benefit
under, or the creation of any Lien on any Seller's or the Company's or any of
the Subsidiaries' properties or assets (any such conflict, violation, default,
right of termination, cancellation or acceleration, loss or creation, shall be
referred to as a "Violation"), pursuant to (i) any provision of the Certificate
of Incorporation, as amended, or By-laws, as amended, or other charter document,
as amended of the Company or any of the Subsidiaries, (ii) any provision of any
loan or credit agreement, note, bond, mortgage, indenture, lease, Benefit Plans
(as defined in Section 3.18 hereof) or other agreement, obligation, instrument,
permit, concession, franchise or license, or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any of
the Subsidiaries or any Seller or their respective properties or assets.
SECTION 3.05 CONSENTS AND APPROVALS. No consent, approval,
order or authorization of, or registration, declaration or filing with any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"), is required by
or with respect to the Company or any of the Subsidiaries or Sellers in
connection with the execution and delivery of this Agreement or the Related
Agreements or the consummation by Sellers of the transactions contemplated
hereby and thereby, except for the filing of a pre-merger notification report
and, if applicable, other documents, by the Company under the HSR Act.
SECTION 3.06 FINANCIAL STATEMENTS. The audited consolidated
balance sheets of the Company and the Subsidiaries as at September 30, 1997,
September 30, 1996, and September 30, 1995 and the related consolidated
statements of income, changes in stockholder's equity and cash flows for the
fiscal years then ended (including the notes thereto) and the unaudited
consolidated balance sheet of the Company and the Subsidiaries as at December
31, 1997 and the related unaudited statement of income for the three (3) month
period then ended delivered by the Company to Buyer: (i) present fairly the
financial position of the Company and the Subsidiaries as of such dates and the
results of their operations and changes in their financial position for such
periods, and (ii) have been prepared in conformity with generally accepted
accounting principles applied on a basis consistent with that of similar periods
for preceding years except that the unaudited consolidated balance sheet and
statement of income do not contain the usual year-end adjustments and notes.
Copies of all such financial statements are attached to SCHEDULE 3.06 hereto.
The Balance Sheet of the Company as of September 30, 1997 is referred to herein
as the "Base Balance Sheet", and September 30, 1997 is referred to herein as the
"Base Balance Sheet Date". The books and records of the Company and
<PAGE>
- 9 -
the Subsidiaries are complete and correct in all material respects and
accurately reflect the basis for the financial condition and results of
operations of the Company and the Subsidiaries as set forth in the financial
statements attached to SCHEDULE 3.06 hereto.
SECTION 3.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the
Base Balance Sheet Date, except as specified in SCHEDULE 3.07 hereto, neither
the Company nor any of the Subsidiaries has: (i) undergone any change in its
condition (financial or other), properties, assets, liabilities, business,
operations or, to Sellers' Knowledge (hereinafter defined in Section 12.06),
prospects except changes in the ordinary and usual course of its business and
consistent with its past practice and which have not been, either in any case or
in the aggregate, materially adverse to the Company and the Subsidiaries on a
consolidated basis; (ii) engaged in any action, activity or practice
inconsistent with the ordinary and routine actions, activities and practices it
has previously followed, the effect of which is to reduce Funded Debt; (iii)
declared, set aside or paid any dividend or other distribution in respect of its
capital stock or made any direct or indirect redemption, purchase or other
acquisition of any shares of its capital stock or made any payment to any of its
shareholders except for employment compensation in the ordinary and usual course
of business and consistent with past practice; (iv) issued or sold any shares of
its capital stock or any options, warrants or other rights to purchase any such
shares or any securities convertible into or exchangeable for such shares or
taken any action to reclassify or recapitalize or split up its capital stock;
(v) mortgaged, pledged or subjected to any Lien, any of its properties or
assets; (vi) acquired or disposed of any interest in any material asset or
material property except the purchase of materials and supplies and the sale of
inventory in the ordinary and usual course of its business and consistent with
its past practice; (vii) forgiven or canceled any debt or claim, waived any
right, or, except in the ordinary and usual course of its business and
consistent with its past practice, incurred or paid any liability or obligation;
(viii) adopted or amended any profit sharing plan, agreement, arrangement or
practice for the benefit of any director, officer or employee or changed the
compensation (including bonuses) to be paid to any director, officer, or
employee; (ix) suffered any damage, destruction or loss (whether or not covered
by insurance) which has a material adverse effect on its condition (financial or
other), properties, assets, business, operations or, to Sellers' Knowledge,
prospects; (x) amended or terminated any contract, agreement, or lease involving
the payment of more than $100,000, or otherwise having a material effect on the
Company or the Subsidiaries; (xi) experienced any material labor difficulty or
loss of employees or customers; (xii) entered into any collective bargaining
agreement; (xiii) sold or granted or transferred to
<PAGE>
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any party or parties any contract or license, or granted an option to acquire a
license, to manufacture or sell any of the products of the Company or any of the
Subsidiaries, or to use any trademark, service mark, trade name, copyright,
patent or any pending application for any foregoing, or any trade secret or
know-how of the Company or any of the Subsidiaries; (xiv) merged, consolidated
or entered into any binding share exchange or other business combination, or
acquired any stock, equity interest or business of any other person; (xv)
changed the accounting methods or practices followed by it; (xvi) without
limiting the generality of any of the foregoing, entered into any transaction
except in the ordinary and usual course of its business and consistent with its
past practice; or (xvii) agreed to, permitted or suffered any of the acts,
transactions or other things described in Subsections (i) through (xvi) of this
Section 3.07.
SECTION 3.08 LIABILITIES. Neither the Company nor any of the
Subsidiaries has any liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, except (i) as set forth in the Base Balance
Sheet or identified as such in SCHEDULE 3.08 hereto; and (ii) those trade
payables incurred since the Base Balance Sheet Date in the ordinary and usual
course of its business and consistent, in type and amount, with its past
practice and experience.
SECTION 3.09 TAXES. Except as set forth in SCHEDULE 3.09
hereto, each of the Company and the Subsidiaries (including any predecessors)
has timely filed when due all Tax returns required to be filed by it and has
paid, or has made adequate provision for or set up in accordance with generally
accepted accounting principles an adequate accrual or reserve for the payment
of, all Taxes required to be paid in respect of all periods for which returns
have been filed or are due (whether or not shown as being due on any Tax
returns), and has established an adequate accrual or reserve for the payment of
all Taxes payable in respect of any period for which no return has been filed or
is due, and the Base Balance Sheet reflects in accordance with generally
accepted accounting principles a reserve for all Taxes payable by the Company or
any of the Subsidiaries accrued through the Base Balance Sheet Date. No material
deficiencies for Taxes have been proposed, asserted or assessed against the
Company or any of the Subsidiaries, and no audit of any of the Tax returns of
the Company or any of the Subsidiaries is currently being conducted by any
Taxing authority. SCHEDULE 3.09 hereto contains a list of all Tax returns
required to be filed by the Company and each of the Subsidiaries for the fiscal
years ended September 30, 1997 and 1996, respectively. SCHEDULE 3.09 hereto also
describes for each Tax return required to be filed by the Company or any
Subsidiary during the five fiscal years ended September 30, 1997, whether: (i)
such return has been examined by and settled with the applicable federal, state,
local or foreign taxing authority; and
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(ii) an extension of the applicable statute of limitations has been given with
respect to such return. Copies of all Federal and Missouri Income Tax returns
required to be filed by the Company and each of the Subsidiaries for each of the
last five years, together with all schedules and attachments thereto, have been
delivered by the Company to Buyer. Copies of all other Tax returns required to
be filed by the Company and each of the Subsidiaries for each of the last five
years, together with all schedules and attachments thereto, are available to
Buyer upon request. Neither the Company nor any of the Subsidiaries is a party
to, is bound by, and has any obligation under any Tax sharing or similar
agreement. For the purpose of this Agreement, the term "Tax" (including, with
correlative meaning, the terms "Taxes", "Taxing", and "Taxable") shall include
all Federal, state, local and foreign income, profits, franchise, gross
receipts, payroll, sales, employment, use, property, gains, transfer, recording,
license, value-added, withholding, excise and other taxes, duties or assessments
of any nature whatsoever (whether payable directly or by withholding), together
with any and all information reporting and estimated Tax, interest, penalties
and additions to Tax imposed with respect to such amounts and any obligations in
respect thereof under any Tax sharing, Tax allocation, Tax indemnity or similar
agreement as well as any obligations arising pursuant to Treasury Regulation
Section 1.1.502-6 or comparable state, local or foreign provision.
SECTION 3.10 TITLE TO AND CONDITION OF REAL ESTATE.
(a) GENERALLY. All of the real property presently owned,
occupied or used by the Company or any of the Subsidiaries or in which the
Company or any of the Subsidiaries otherwise has an interest and the owners
thereof are identified in SCHEDULE 3.10(A) hereto (the "Premises"). The
Premises, all improvements located thereon, and the use thereof, comply in all
material respects with all zoning, land use, building, health, safety and fire
laws, codes, permits, licenses and certificates, rules, orders, ordinances,
regulations and all restrictions and conditions (provided that compliance with
Environmental Laws (as hereinafter defined) is not addressed in this Section
3.10). To Sellers' Knowledge there are no actions, suits, proceedings or
investigations pending or, threatened before any federal, state, municipal,
regulatory or administrative authority affecting the Premises. The Company, any
Subsidiary and, to Sellers' Knowledge, the owners of the Leased Premises (as
hereinafter defined) are not in default with respect to any order, judgment,
injunction or decree of any court or other governmental authority with respect
to the Premises. The Premises are adequate for the purposes for which they are
and have been used and, to Seller's Knowledge, none of the Premises are in need
of maintenance or repairs except for maintenance or repairs that are either
routine or not material in nature or cost. All water, sewer, gas,
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electric, telephone and drainage facilities and all other utilities required for
the use and operation of the Premises are available, and such utilities enter
the boundaries of such facilities through adjoining public streets or easement
rights-of-way. To Sellers' Knowledge, such public utilities are all connected
pursuant to valid permits, are all in good working order and are adequate to
service the operations of the Premises as currently conducted and permit full
compliance with all requirements of law. The Premises have adequate access to
public streets. To Sellers' Knowledge, there are no pending or threatened
assessments for municipal improvements which may affect or become a Lien on the
Premises.
(b) OWNED PREMISES. SCHEDULE 3.10(B) hereto sets forth the
legal description of the Premises owned by the Company or any of the
Subsidiaries ("Owned Premises") and all fee title insurance policies, title
searches and surveys relating to the Owned Premises. The Company or its
Subsidiaries, as the case may be, has good and marketable fee simple title to
the Owned Premises, free and clear of all mortgages, liens, security interests,
easements, covenants, rights-of-way and other encumbrances or restrictions of
any nature whatsoever, except easements, covenants, rights-of-way, zoning
restrictions, and other encumbrances or restrictions identified on SCHEDULE
3.10(B), hereto ("Permitted Encumbrances"), none of which prohibit or in any
material respect interfere with the operations of the Company or any of the
Subsidiaries on the Owned Premises as heretofore conducted. Except as set forth
in SCHEDULE 3.10(B), all structures and other improvements on the Owned Premises
are within the lot lines and do not encroach on the properties of any other
person. No portion of the Owned Premises is located in a flood plain, flood
hazard area or designated wetlands area or is listed on the National Priorities
List, CERCLIS or any similar listing of contaminated sites. Neither the Company
nor any of its Subsidiaries has received any written notice of assessments for
public improvements against the Owned Premises (or any portion thereof) or any
written notice or order by any governmental or other public authority, any
insurance company which has issued a policy with respect to any of the Owned
Premises or any board of fire underwriters or other body exercising similar
functions that (A) relates to violations of building, safety or fire ordinances
or regulations, (B) claims any defect or deficiency with respect to any of the
Owned Premises or (C) requests the performance of any repairs, alterations or
other work to or in any of the Owned Premises or in the streets bounding the
same. There is no pending condemnation, expropriation, eminent domain or similar
proceeding against the Company or any of the Subsidiaries affecting all or any
portion of the Owned Premises. Except as set forth in SCHEDULE 3.10(C) hereto,
none of the Owned Premises is subject to any leases (oral or written).
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(c) LEASED PREMISES. Any of the Premises not owned by the
Company or any of the Subsidiaries ("Leased Premises") are leased pursuant to
leases ("Leases") that are valid and binding agreements, enforceable in
accordance with their respective terms subject to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to creditors' rights,
and (ii) the discretion of the courts to award equitable relief, and are in full
force and effect. The Company and each of the Subsidiaries has performed all
material obligations required to be performed by them to date under the Leases
and are not in material breach in any respect thereunder, and there has been no
event which, with the giving of notice or the lapse of time or both, would
become a material breach thereunder. Except as previously disclosed in writing
to Buyer, to Sellers' Knowledge, no other party to any of the Leases is in
material breach thereunder. Neither the Company nor any of the Subsidiaries has
received any notice of default under any of the Leases, and all rental and other
payments due under each of the Leases have been fully paid.
SECTION 3.11 ENVIRONMENTAL COMPLIANCE.
(a) Definition of "ENVIRONMENTAL LAWS". As used in this
Agreement, the term "Environmental Laws" shall mean any and all laws, statutes,
codes, rules, regulations, ordinances, permits, policy statements, guidance
documents and judicial decisions applicable to, affecting or relating to the
protection, preservation or remediation of the environment or public health
enacted, issued, promulgated, published, decided or required by any federal,
state, county or municipal legislative, executive, judicial or regulatory
authority, as the case may be, in existence and effective on the Closing Date,
including but not limited to: (1) Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 USCA 9601, ET SEQ., (2) Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976, as
amended by the Hazardous and Solid Waste Amendments of 1984, 42 USCA 6901, ET
SEQ., (3) Federal Water Pollution Control Act of 1972, as amended by the Clean
Water Act of 1977, as amended, 33 USCA 1251, ET SEQ., (4) Toxic Substances
Control Act of 1976, as amended, 15 USCA 2601, ET SEQ., (5) Emergency Planning
and Community Right-To-Know Act of 1986, 42 USCA 11001, ET SEQ., (6) Clean Air
Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 USCA 7401,
ET SEQ., (7) National Environmental Policy Act of 1970, as amended, 42 USCA
4321, ET SEQ., (8) Rivers and Harbors Act of 1899, as amended, 33 USCA 401, ET
SEQ., (9) Endangered Species Act of 1973, as amended, 16 USCA 1531, ET SEQ.,
(10) Occupational Safety and Health Act of 1970, as amended, 29 USCA 651, ET
SEQ., (11) Safe Drinking Water Act of 1974, as amended, 42 USCA 300(f), ET SEQ.,
(12) Pollution Prevention Act of 1990, 42 USCA 13101, ET SEQ., (13) Oil
Pollution Act of 1990, 33 USCA 2701, ET SEQ., and
<PAGE>
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any rules, regulations, ordinances, permits, policy statements, guidance
documents and judicial decisions enacted, issued, promulgated, published,
decided or required by or under the laws referred to in Section 3.11(a)(1)-(13)
above, as well as any similar state, county or municipal statutes, codes, rules,
regulations, ordinances, permits, policy statements, guidance documents, and
judicial decisions, as the case may be.
(b) Definition of "ENVIRONMENTAL PERMITS". As used in this
Agreement, the terms "Environmental Permits" shall mean any and all permits,
licenses, approvals, authorizations, consents or registrations required by any
Environmental Laws in connection with the ownership, construction, equipping,
use and/or operation of the Business or the Premises, for the storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Substances or the sale, transfer or conveyance of the
Premises.
(c) Definition of "HAZARDOUS SUBSTANCE". As used in this
Agreement, the term "Hazardous Substance" shall mean, without limitation, any
flammable, explosive or radioactive materials, radon, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum
constituents, petroleum products, methane, hazardous materials, hazardous
wastes, hazardous or toxic substances or related materials, pollutants, and
toxic pollutants, as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 USCA Sections 9601, ET
SEQ.), the Hazardous Materials Transportation Act, as amended (49 USCA 1801, ET
SEQ.) the Solid Waste Disposal Act as amended by the Resource Conservation and
Recovery Act (42 USCA Section 6901, ET SEQ.), the Toxic Substances Control Act,
as amended (15 USCA Sections 2601, ET SEQ.), the Federal Waters Pollution
Control Act, as amended (33 USCA Sections 1251, ET SEQ.) and similar state laws
in the jurisdictions in which the Premises are located, as well as any rules,
regulations, ordinances, permits, policy statements, guidance documents and
judicial decisions issued, promulgated, published, decided or required
thereunder by any federal, state, county or municipal executive, judicial or
regulatory authority.
(d) Definition of "RELEASE". As used in this Agreement, the
term "Release" shall have the same meaning as given to that term in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 USCA Section 9601, ET SEQ.), and the regulations promulgated
thereunder.
(e) Definition of "CUSTOMERS". As used in this Agreement, the
term "Customers" shall mean those individuals, corporations, partnerships or
other entities or organizations with whom the Company or any of the Subsidiaries
enters into
<PAGE>
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contractual arrangements and for whom the Company or any of the Subsidiaries
performs services on the Customers' Properties pursuant to or in connection with
any such contractual arrangement.
(f) Definition of "CUSTOMERS' PROPERTIES": As used in this
Agreement, the term "Customers' Properties" shall mean any real estate
(including, without limitation, any improvements thereon) owned, operated,
leased or otherwise under the control of the Company's Customers or the
Subsidiaries' Customers.
(g) REPRESENTATION AND WARRANTIES. Except as otherwise
disclosed on SCHEDULE 3.11 hereto:
(i) Neither the Owned Premises nor, to the best of
the Sellers' knowledge without independent
investigation, the Leased Premises is being or has
been used in violation of any Environmental Laws
for the storage, treatment, generation,
transportation, processing, handling, production
or disposal of any Hazardous Substance or as a
landfill or other waste management or disposal
site or for the manufacture or use of any form of
weapon or ammunition for military purposes.
(ii) Underground storage tanks are not and have
not been located on the Owned Premises nor, to the
best of the Sellers' knowledge without independent
investigation, on the Leased Premises.
(iii) There has been no Release or threat of a
Release of any Hazardous Substance on, at or from
the Owned Premises or, to the best of the Sellers'
knowledge without independent investigation, the
Leased Premises which through soil, subsoil,
bedrock, surface water, groundwater or airborne
migration have come to be located, or, in the case
of a threat of a Release could come to be located
on, at, in or under the Premises. Neither the
Company nor any Subsidiary has received any form
of notice or inquiry from any federal, state or
local Governmental Entity or authority, any prior
owner, operator, tenant, subtenant, licensee or
occupant of the Premises or any owner or operator
of property adjacent to or within the immediate
vicinity of the Premises or any other person with
regard to a Release or the threat of any Release
of any Hazardous Substance on, at or
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from the Premises. Neither the Company nor any
Subsidiary has received any form of notice or
inquiry from any Customer with regard to a Release
or a threat of a Release of any Hazardous
Substance on, at or from any of the Customers'
Properties resulting or allegedly resulting from
activities undertaken thereon by the Company or
the Subsidiaries.
(iv) All Environmental Permits necessary for the
construction, equipping, ownership, use or
operation of the Business or the Premises by the
Company and the Subsidiaries have been obtained
and are in full force and effect and the Company
and each of the Subsidiaries is in compliance
therewith.
(v) No event has occurred with respect to the
Business or the Owned Premises or, to the best of
the Sellers' knowledge without independent
investigation, the Leased Premises which, with the
passage of time or the giving of notice, or the
failure to give notice, would constitute a
material violation of or material non-compliance
with, any applicable Environmental Laws or
Environmental Permits.
(vi) To the best of Sellers' knowledge without
independent investigation, no act or omission of
the Company or the Subsidiaries at, upon or in any
of the Customers' Properties has been or is in
violation of any applicable Environmental Law.
(vii) There are no agreements, consent orders,
decrees, judgments, licenses or permit conditions
or other orders or directives of any federal,
state or local court, or Governmental Entity
relating to the past or present construction,
equipping, ownership, use, operation, sale,
transfer or conveyance of the Business or the
Premises which require any change in the present
condition of the Business or the Premises or any
work, repairs, construction, containment, clean
up, investigations, studies, removal or remedial
action or capital expenditures in order for the
Business or the Premises to be in compliance with
any Environmental Laws or Environmental Permits.
<PAGE>
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(viii) There are no actions, suits, claims or
proceedings, pending or threatened, which could
cause the incurrence of expenses or costs of any
name or description or which seek money damages,
injunctive relief, remedial action or remedy that
arise out of, relate to or result from (1)
environmental conditions at, on, or under the
Premises, (2) a violation or alleged violation of
any Environmental Laws or non-compliance or
alleged non-compliance with any Environmental
Permits, (3) the presence of any Hazardous
Substance or a Release or the threat of a release
of any Hazardous Substance on, at or from the
Premises or property adjacent to or within the
immediate vicinity of the Premises, or (4) with
the exclusion of current or former employees of
the Company or the Subsidiaries in connection with
their employment with the Company or the
Subsidiaries, human exposure to any Hazardous
Substance, noises, vibrations or nuisances of
whatever kind to the extent, with respect to
Section 3.11 (g)(viii)(1)-(4), the same arise from
the Business or the condition of the Premises or
the acquisition, construction, equipping,
ownership, use, operation, sale, transfer or
conveyance thereof, or (5) to the knowledge of the
Company or the Subsidiaries without independent
investigation, the Release, threat of Release or
generation of any Hazardous Substance at, on, in
or from any of Customers' Properties resulting
from activities undertaken thereon by the Company
or the Subsidiaries.
SECTION 3.12 TITLE TO AND CONDITION OF PROPERTIES AND ASSETS.
All of the tangible assets owned or leased (which shall be designated as leased)
by the Company or any of the Subsidiaries including, without limitation, all
machinery, equipment, fixtures, furniture, office equipment, computer equipment,
tooling and vehicles are described in SCHEDULE 3.12 hereto (the "Fixed Assets").
Except as specifically described in SCHEDULE 3.12 hereto, the Company and each
of the Subsidiaries has good and marketable title to all of the properties and
assets reflected in the Base Balance Sheet, those listed in SCHEDULE 3.12
hereto, those located on or in the Premises and those used by the Company or any
of the Subsidiaries, subject to no Liens. The Fixed Assets are adequate for the
purposes for which they are and have been used and, to Sellers' Knowledge, none
of the Fixed Assets are in need of maintenance or repair except for
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maintenance or repairs that are either routine or not material in nature or
cost. To Sellers' Knowledge, the Fixed Assets conform with all applicable laws,
ordinances and regulations. To Sellers' Knowledge, there is no pending or
threatened change of any applicable ordinance, regulation or zoning or other
law, standard or requirement with which any of such property would not conform.
SECTION 3.13 PROPRIETARY RIGHTS. SCHEDULE 3.13 lists all
patents, registered trademarks, registered service marks, trade names and
copyright registrations (and all pending applications for any of the foregoing)
owned or used by the Company or any of the Subsidiaries. The Company has good
and marketable title to all patents, trademarks, trade secrets, service marks,
trade names, know-how, technology and copyrights used in, or necessary for, the
operation of the Business as heretofore conducted (collectively referred to as
"Proprietary Rights"). Except as set forth on SCHEDULE 3.13, the Proprietary
Rights are not subject to any outstanding material licenses, Liens or royalty
obligations. The Company and each Subsidiary, to Sellers' Knowledge, has taken
all action reasonably necessary to protect against and defend against any
material conflicting use of the Proprietary Rights. To Sellers' Knowledge,
neither the Company nor any of the Subsidiaries has received any notice to the
effect that the Business, Proprietary Rights or any use by the Company or any of
the Subsidiaries thereof, conflicts with or infringes on the rights of any other
person or entity.
SECTION 3.14 CONTRACTS; NO DEFAULTS; MAJOR CLIENTS.
(a) SCHEDULE 3.14 attached hereto contains a true, complete
and correct list and description of the following contracts and agreements,
whether written or oral:
(i) all loan agreements, indentures, mortgages and
guaranties to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries or their respective property is
bound;
(ii) all pledges, conditional sale or title retention
agreements, security agreements, equipment obligations, personal property leases
and lease purchase agreements to which the Company or any of the Subsidiaries is
a party or by which the Company or any of the Subsidiaries or any of their
respective property is bound;
(iii) all contracts, agreements, commitments, purchase
orders or other understandings or arrangements to which the Company or any of
the Subsidiaries is a party or by which any of their respective property is
bound which (A) involve payments or receipts by any of them of more than $50,000
in the case of any single contract, agreement, commitment, understanding or
<PAGE>
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arrangement under which full performance (including payment) has not been
rendered by all parties thereto or (B) may materially adversely affect the
condition (financial or otherwise) or the properties, assets, business or, to
Sellers' Knowledge, prospects of the Business; provided, however, that SCHEDULE
3.14 may exclude any contract with a customer, vendor or subcontractor which is
on the Company's standard terms and conditions and which does not involve the
payment or receipt by the Company or any Subsidiary of an amount in excess of
$250,000.
(iv) all collective bargaining agreements, employment and
consulting agreements, non-competition agreements, trust agreements, executive
compensation plans, bonus, 401(k), or profit-sharing plans, deferred
compensation agreements, pension plans, retirement plans, employee stock option
or stock purchase plans and group life, health and accident insurance and other
employee benefit plans, agreements, memoranda of understanding, arrangements or
commitments to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries or any of their respective
properties is bound;
(v) all material agency, distributor, sales representative
and similar agreements to which the Company or any of the Subsidiaries is a
party;
(vi) all material contracts, agreements or other
understandings or arrangements, whether written or oral, between the Company or
any of the Subsidiaries and any shareholder, employee, officer or director of
the Company or any of the Subsidiaries;
(vii) all material leases, whether operating, capital or
otherwise, under which the Company or any of the Subsidiaries is lessor or
lessee;
(viii) all contracts, agreements and other documents or
information relating to disposal of waste (whether or not hazardous);
(ix) all return policies and product warranties relating to
products, goods or systems manufactured, distributed or installed by the Company
or any Subsidiary as the same are currently in effect or may have been in effect
from time to time since January 1, 1994 as well as any exception to such
policies, all cooperative advertising arrangements and all rebate, discount or
allowance arrangements;
(x) all material contracts related to operation, maintenance
or management of the Premises;
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(xi) all material agreements relating to the licensing of
intellectual property under which the Company or any of the Subsidiaries is
licensor or licensee.
(b) With respect to each contract to which the Company or any
of the Subsidiaries is a party or pursuant to which it is bound (whether or not
identified in SCHEDULE 3.14 hereto):
(i) such contract is a valid and binding agreement of the
Company or any of the Subsidiaries that is a party thereto, enforceable against
the Company or the Subsidiary and the other parties thereto in accordance with
its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and the discretion of the courts to award equitable relief;
(ii) the Company and each of the Subsidiaries that is a
party thereto has fulfilled all material obligations required to have been
performed by it prior to the date hereof, and neither the Company nor any of the
Subsidiaries has any reason to believe that it will not be able to fulfill, when
due, all of its obligations under such contract which remain to be performed
after the date hereof to the Closing;
(iii) neither the Company nor any of the Subsidiaries is in
material breach of such contract, and no event has occurred which with the
passage of time or giving notice or both would constitute a default, result in a
loss of rights or result in the creation of any lien, charge or encumbrance,
thereunder or pursuant thereto;
(iv) to Sellers' Knowledge, there is no existing material
breach by any other party to such contract, and no event has occurred which with
the passage of time or giving of notice or both would constitute a default by
such other party, result in a loss of rights or result in the creation of any
lien, charge or encumbrance thereunder or pursuant thereto;
(v) neither the Company nor any of the Subsidiaries is
restricted or, so far as the Company or any of the Subsidiaries now reasonably
foresees, may be restricted in the future, by the provisions of such contract
from carrying on its respective business anywhere in the world (except for
restrictions in real estate leases which limit the use of the leased premises or
in licenses granted to the Company or any Subsidiary which limit the use of the
licensed property);
(vi) the continuation, validity and effectiveness of such
contract would not be affected by the transfer of the Shares to Buyer under this
Agreement and such contract does not require the consent or approval of any
party thereto in
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connection with this Agreement or the transactions contemplated hereby;
(vii) a true, correct and complete copy of such contract has
been heretofore made available to Buyer; and
(viii) Sellers have no reason to believe such contract will
not be renewed (if renewable) and neither the Company nor any of the
Subsidiaries has received any notification that such contract is not likely to
be renewed.
(c) The sale and transfer of the Shares contemplated by this
Agreement will not create a default under or permit the termination of or
otherwise have any materially adverse effect on any material contract of the
Company or any Subsidiary.
(d) SCHEDULE 3.14 hereto includes a complete and correct list
of the ten (10) largest customers of the Company and each of the Subsidiaries in
terms of revenue recognized in respect of such customers during the fiscal year
ended September 30, 1997 showing the amount of revenue recognized for each such
customer during such period. To Sellers' Knowledge, no customer so listed in
SCHEDULE 3.14 hereto will or is likely to terminate or reduce in any material
respect, or otherwise materially and adversely change, the business or
relationship between such customer and the Company or any of the Subsidiaries.
(e) Neither the Company nor any Subsidiary has accrued for a
loss in respect of any uncompleted customer contract nor is such an accrual
warranted under generally accepted accounting principles or anticipated based
upon current information.
SECTION 3.15 INVENTORIES; ORDER BACKLOG. The inventory of the
Company and each of the Subsidiaries consists of items of good and merchantable
quality, salable at normal prices or usable in the ordinary and usual course of
its business, subject to the reserve for unsalable or unusable inventory
specified in the Base Balance Sheet. The amounts at which inventories are
carried on the Base Balance Sheet and on the books of the Company reflect the
normal inventory valuation policy of the Company and each of the Subsidiaries of
valuing inventory at the lower of cost or market value in accordance with
generally accepted accounting principles. SCHEDULE 3.15 sets forth the aggregate
amounts of all binding and unfilled orders for the sale of goods and services by
the Company and each Subsidiary as of January 31, 1998, all of which orders have
been made and accepted in the ordinary course of the Business and are on terms
consistent with past practice.
SECTION 3.16 ACCOUNTS RECEIVABLE. All accounts receivable of
the Company and each of the Subsidiaries have arisen only through sales in the
ordinary course of business
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consistent with past practice for goods sold or services performed. The accounts
receivable of the Company and each of the Subsidiaries shown on the Base Balance
Sheet and all accounts receivable of the Company and each of the Subsidiaries
which have arisen subsequent to the Base Balance Sheet Date are, subject to the
reserve for uncollectible accounts specified in the Base Balance Sheet, good and
collectible in the ordinary and usual course of its business without resort to a
collection agency or litigation and are not subject to any claims or offsets and
Sellers have no reason to believe that such accounts receivable will not be
collected.
SECTION 3.17 LABOR MATTERS. There are no strikes,
arbitrations, material grievances, other labor disputes or union organizational
drives pending or threatened between the Company and any of its employees or
between any of the Subsidiaries and any of its employees. Except as described in
SCHEDULE 3.17 hereto, neither the Company nor any of the Subsidiaries is party
to any union, collective bargaining or other similar agreements. The Company and
each of the Subsidiaries has paid or accrued in full all wages, salaries,
commissions, bonuses and other compensation (including severance pay and
vacation benefits) for all services performed by its employees. Neither the
Company nor any of the Subsidiaries is liable for any arrears of wages or any
payroll taxes or any penalties or other damages for failure to comply with any
applicable foreign, federal, state and local laws relating to the employment of
labor.
SECTION 3.18 OTHER EMPLOYEE MATTERS.
(a) "CONTROLLED GROUP". For purposes of this Section,
"Controlled Group" shall mean the Company and the Subsidiaries and any trade or
business, whether or not incorporated, which is part of a controlled group,
under common control or affiliated with the Company within the meaning of
Section 4001(b)(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Sections 414(b), (c), (m) or (o) of the Code.
(b) SCHEDULE 3.18(B) hereto sets forth the name, title, total
annual compensation for the most recently completed calendar year (including
bonus and commissions), current base salary rate, accrued bonus, accrued sick
leave, accrued severance pay and accrued vacation benefits, of each present
employee of the Company and the Subsidiaries and each other member of the
Controlled Group.
(c) EMPLOYEE BENEFIT PLANS.
(i) DELIVERY OF BENEFIT PLAN MATERIALS. With
respect to each of the plans, funds, arrangements or practices, set forth in
SCHEDULES 3.18(C)(II) and (III) below ("Benefit Plans"), the Company has
heretofore delivered to Buyer true and
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complete copies of: (A) all plan documents relating to the Benefit Plan and all
amendments thereto and, where applicable, related trust agreements and group
annuity contracts, and all amendments thereto, and insurance policies,
certificates and related documents, and current financial statements, (B) all
material contracts relating to the Benefit Plan, including, without limitation,
insurance contracts, investment management agreements, subscription and
participation agreements and record keeping agreements; (C) the most recent
Summary Plan Description of the Benefit Plan and any Summary of Material
Modifications or other writings furnished to employees with respect to the
Benefit Plan; (D) except as provided on SCHEDULE 3.18(C)(I), the most recent
annual returns/reports in the Form 5500 series relating to the Benefit Plan, and
any amendments thereto, as filed with the Internal Revenue Service, together
with all enclosures and attachments thereto, including, without limitation,
audited financial statements, and related Summary Annual Reports; (E) except as
provided on SCHEDULE 3.18(C)(I), with respect to each Pension Plan (as defined
below) intended to qualify under the Code, the most recent Internal Revenue
Service determination letter determining that the Benefit Plan is qualified for
federal income tax purposes under Section 401(a) or Section 403(a) of the Code
and that any related trust is exempt from taxation under Section 501(a) of the
Code; (F) except as disclosed in SCHEDULE 3.18(C)(I), any and all collective
bargaining agreements under which the Benefit Plan is maintained; and (G) with
respect to each Pension Plan (as defined below) that is intended to qualify
under the Code, true and complete employee census information that will permit
Buyer to complete item 21 of the Form 5500 or Form 5500-C/R for such Benefit
Plan in a manner that satisfies the requirements of Section 410(b) of the Code,
the Treasury Regulations issued thereunder, and the Treasury Regulations
currently proposed to be issued thereunder, and which identifies by name each
employee of the Company or any other member of the Controlled Group who is a
"highly compensated employee" (as defined in Section 414(q) of the Code and
Treasury Regulations issued thereunder) for the most recently completed plan
year.
(ii) EMPLOYEE WELFARE BENEFIT PLANS. Except as disclosed in
SCHEDULE 3.18(C)(II) hereto, neither the Company nor any other member of the
Controlled Group directly or indirectly maintains, or is a party to or
contributes to, or is obligated to maintain or be a party to or contribute to,
or has ever maintained or been a party to or contributed to, any employee
welfare benefit plan, fund, arrangement or practice, whether or not in writing,
which provides or promises to provide employee benefits (other than benefits
provided by a Pension Plan or a Multiemployer Plan as defined below) to
employees or former employees of the Company or any other member of the
Controlled Group or their dependents or other individuals, including, without
limitation, health, accident, disability, cafeteria,
<PAGE>
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dependent care, employee assistance, unemployment severance benefits, fringe
benefits, or life insurance or other death benefits, or any "employee welfare
benefit plan" as defined in Section 3(1) of ERISA, whether formal or informal,
written or unwritten, and whether or not legally binding, or any plan, fund,
arrangement or practice which provides benefits for employees, former employees,
dependents of former employees, or other individuals or which commits either the
Company or any other member of the Controlled Group to provide benefits (other
than benefits provided by a Pension Plan as defined below) for any person upon
or following retirement or other termination of employment.
With respect to each plan, fund, arrangement or practice
listed in SCHEDULE 3.18(C)(II) ("Welfare Plan"), except as disclosed in SCHEDULE
3.18(C)(II): (A) the Welfare Plan is, and has at all times been, operated in all
respects in material compliance with its governing documents (except as
otherwise required by applicable law), ERISA, the Code, all regulations, rulings
and announcements promulgated or issued under ERISA and the Code, and all other
applicable law, including, without limitation, the reporting and disclosure
requirements of ERISA; (B) neither the Company, nor any other member of the
Controlled Group, nor the Welfare Plan, nor, to Sellers' Knowledge, any "party
in interest" (as defined in Section 3(14) of ERISA) or "disqualified person" (as
defined in Section 4975 of the Code), nor any fiduciary with respect to the
Welfare Plan, nor any other party, has engaged in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) other than a
transaction subject to a statutory or administrative exemption; (C) all
contributions, premiums or claim payments required to be made to or on behalf of
the Welfare Plan by law, contract or the terms of the Welfare Plan have been
made, and all expenses relating to contributions, premiums or claim payments due
or owing with respect to the Welfare Plan have been properly accrued and
reflected in the Base Balance Sheet; (D) except for the processing of routine
claims in the ordinary course of administration, there is no pending,
anticipated or, to Sellers' Knowledge, threatened litigation, arbitration, or
claim, by or against or otherwise involving the Welfare Plan or any fiduciary
thereof in respect of the Welfare Plan, nor is there any judgment, decree,
injunction, rule or order of any court, governmental body, commission, agency or
arbitrator, outstanding against or in favor of or otherwise involving the
Welfare Plan or any fiduciary thereof in respect of the Welfare Plan; (E) to
Sellers' Knowledge, the Welfare Plan and any related trust, including, without
limitation, any "voluntary employees' beneficiary association" (as defined in
Section 501(c)(9) of the Code ("VEBA")) and any other trust or arrangement
described in Section 501(c) of the Code which is intended to be exempt from
taxation under Section 501(a) of the Code, has been determined by the Internal
Revenue Service to be so exempt, and there exists no
<PAGE>
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fact or circumstance which would adversely affect the exempt status of each such
Welfare Plan, VEBA, trust or arrangement; (F) to Sellers' Knowledge, the Welfare
Plan, if funded, and any related trust, is in material compliance with Sections
419 and 419(A) of the Code and, if intended to be a VEBA, is in material
compliance with Section 501(c)(9) of the Code; (G) the Welfare Plan, if a group
health plan within the meaning of Section 607(1) of ERISA or Section 5000(b)(1)
of the Code, is and at all times has been in material compliance with Sections
601 through 608 of ERISA and Section 4980B of the Code; (H) to Sellers'
Knowledge, there is no "disqualified benefit" (as such term is defined in
Section 4976(b) of the Code) which would subject the Company or any other member
of the Controlled Group or Buyer to a tax under Section 4976 of the Code; (I) to
Sellers' Knowledge, if the Welfare Plan is intended to meet the requirements for
tax favored treatment under Subsection B of Chapter 1 of the Code, it meets such
requirements; (J) the Welfare Plan may be amended or terminated by Buyer on or
at any time after the Closing Date, and neither any Seller, the Company nor any
other member of the Controlled Group has taken any action as to any Welfare Plan
which limits the right of Buyer to amend or terminate such Welfare Plan without
incurring additional liability other than for benefit claims accruing prior to
the effective date of such amendment or termination; and (K) the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereunder will not result in any obligation or liability of the Company or any
other member of the Controlled Group, or of Buyer to the Welfare Plan or to any
employee, former employee or other person.
Except as required by applicable state or local statutes or
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and except
as disclosed in SCHEDULE 3.18(C)(II), neither the Company nor any other member
of the Controlled Group provides health benefits to any retiree, other former
employee or dependent or survivor of a retiree or other former employee.
(iii) EMPLOYEE PENSION BENEFIT PLANS. Except as
disclosed in SCHEDULE 3.18(C)(III) hereto, neither the Company nor any other
member of the Controlled Group directly or indirectly maintains, or is a party
to or contributes to, or is obligated to maintain, be a party to or contribute
to, or has ever maintained or been a party to or contributed to, any deferred
compensation plan or any plan, fund, arrangement or practice, whether formal or
informal, whether or not in writing, and whether or not legally binding, that is
or may be an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) other than a "Multiemployer Plan" (a "multiemployer plan", as defined in
Section 3(37) or 4001(a)(3) of ERISA, which is an "employee pension benefit
plan", as defined in Section 3(2) of ERISA). Neither any Seller, the Company nor
any other current or former member of the Controlled Group sponsors or
contributes to,
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or has ever sponsored or contributed to, any "employee pension benefit plan",
other than a Multiemployer Plan, which is or was subject to Title IV of ERISA,
Section 302 of ERISA or Section 412 of the Code.
With respect to each plan, fund, arrangement or practice
listed in SCHEDULE 3.18(C)(III) ("Pension Plan"), except as disclosed in
SCHEDULE 3.18(C)(III) hereto: (A) to the extent required the Pension Plan is,
and at all times has been, qualified under Section 401(a) or 403(a) of the Code
and any trust through which the Pension Plan is funded is exempt from federal
income tax under Section 501(a) of the Code, and no fact or circumstance exists
which would adversely affect the qualified status of the Pension Plan or any
trust; (B) the Pension Plan is, and at all times has been, operated in all
respects in material compliance with its governing documents (except as
otherwise required by applicable law), ERISA, the Code, all regulations, rulings
and announcements promulgated or issued under ERISA and the Code, and all other
applicable law, including, without limitation, the reporting and disclosure
requirements of ERISA; (C) a favorable determination letter under Section 401 or
403(a) of the Code has been issued by the Internal Revenue Service with respect
to the Pension Plan and all amendments thereto, and there exists no fact or
circumstance which would adversely affect such qualification; (D) neither the
Company nor any other member of the Controlled Group, nor the Pension Plan, nor,
to Sellers' Knowledge, any "party in interest" (as defined in Section 3(14) of
ERISA) or "disqualified person" (as defined in Section 4975 of the Code), nor
any fiduciary with respect to the Pension Plan, nor any other party, has engaged
in any "prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) other than a transaction subject to statutory or
administrative exemption; (E) to Sellers' Knowledge, no termination or partial
termination of the Pension Plan within the meaning of Section 4042 of ERISA or
Section 411(d)(3) of the Code has occurred, and no condition exists that would
constitute grounds for the termination or partial termination of the Pension
Plan; (F) all contributions, premiums and claim payments required to be made to
or on behalf of the Pension Plan by law, contract or the terms of the Pension
Plan have been made, and all expenses relating to contributions, premiums or
claim payments due or owing with respect to the Pension Plan have been properly
accrued and reflected in the Company's financial statements as of the Closing
Date; (G) except for the processing of routine claims in the ordinary course of
administration, there is no pending, anticipated or, to Sellers' Knowledge,
threatened litigation, arbitration, or claim by or against or otherwise
involving the Pension Plan or any fiduciary thereof, nor is there any judgment,
decree, injunction, rule or order of any court, governmental body, commission,
agency or arbitrator, outstanding against or in favor of or otherwise involving
the Pension Plan or any fiduciary thereof in respect of the Pension Plan; (H) to
Sellers'
<PAGE>
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Knowledge, the Pension Plan may be amended or terminated by Buyer on or at any
time after the Closing Date and shall, upon any such amendment or termination,
give rise to no additional benefit obligations other than those which had
accrued as of the effective date of the amendment or termination; and (I) the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereunder will not result in any obligation or
liability of the Company or any other member of the Controlled Group, or of
Buyer to the Pension Plan or to any employee, former employee or other person.
Neither the Company nor any other member of the Controlled
Group maintains an "employee stock ownership plan" (as defined in Section
4975(e)(7) of the Code) or a tax credit employee stock ownership plan (within
the meaning of Section 409(a) of the Code).
Except as described in SCHEDULE 3.18(C)(III), neither the
Company nor any other member of the Controlled Group has any "leased employees"
(as defined in Section 414(n) of the Code) who must be taken into account for
the requirements of Section 414(n)(3) of the Code.
(iv) MULTIEMPLOYER PLANS. Except as disclosed on SCHEDULE
3.18(C)(IV), neither the Company nor any member of the Controlled Group
contributes to or is obligated to contribute to, or has ever contributed to or
been obligated to contribute to, any Multiemployer Plan, nor has the Company nor
any other current or former member of the Controlled Group withdrawn from any
such Multiemployer Plan in a complete or partial withdrawal. All contributions
and premiums required to be made by the Company and each member of the
Controlled Group to each such Multiemployer Plan have been made, and all
expenses relating to contributions and premiums due or owing with respect to
each such Multiemployer Plan have been properly accrued and reflected in the
Company's financial statements as of the Closing Date.
(v) OTHER COMPENSATION ARRANGEMENTS. Except as disclosed in
SCHEDULE 3.18(C)(V) hereto, neither the Company nor any other member of the
Controlled Group maintains or is a party to or contributes to, or is obligated
to maintain or be a party to or contribute to, or has ever maintained or been a
party to or contributed to, nor entered into an agreement with respect to, any
compensation plan, fund, arrangement or practice, whether or not in writing and
whether or not enforceable, including, without limitation, any retirement,
deferred compensation, incentive compensation, pension, profit sharing, thrift,
stock bonus, stock purchase, stock grant, stock option, phantom stock, bonus
program, which provides for or promises benefits to any current or former
officer, consultant, director or employee of the Company or of any other member
of the Controlled Group, that is not a Welfare Plan, a Pension Plan, or a
Multiemployer Plan.
<PAGE>
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SECTION 3.19 LITIGATION AND CLAIMS. Except as summarized in
SCHEDULE 3.19 hereto, there is no pending or threatened action, suit,
proceeding, claim, investigation or notice by or against the Company or any of
the Subsidiaries (other than actions, suits, proceedings or claims, seeking
money damages only and involving no more than $25,000), whether or not covered
by insurance, and there is no outstanding order, notice, writ, injunction or
decree of any court, government or governmental agency against or affecting the
Company or any of the Subsidiaries. There are no incidents or occurrences,
(whether or not covered by insurance) of any kind which, to Sellers' Knowledge
and except for workers' compensation claims that arise from time to time in the
ordinary course of business, may give rise to material claims against the
Company or any of the Subsidiaries, whether or not covered by insurance.
SECTION 3.20 INSURANCE. Included in SCHEDULE 3.20 hereto is a
list of all policies of property, fire, liability, life and other forms of
insurance, and indemnity bonds, carried by the Company or any of the
Subsidiaries identifying the nature of risks covered and the amount of coverage
in each case and specifies any year or years since October 1, 1994 when any such
insurance was not in effect. The amount of coverage for each such policy has
been equal to or greater than the amount required by contracts entered into by
the Company or any of the Subsidiaries. All such policies are in full force.
Sellers believe the Company and each of the Subsidiaries are adequately insured
against the kinds of risks usually incurred by corporations engaged in the same
or similar business. The Company and each of the Subsidiaries has given due and
timely notice of any claim and of any occurrence known to the Company which may
give rise to a claim which may be covered by any such insurance and has
otherwise complied with the provisions of such policies.
SECTION 3.21 COMPLIANCE WITH APPLICABLE LAWS. The Company and
each of the Subsidiaries holds all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities which are material to the
operation of its business (the "Company Permits"). The Company and each of the
Subsidiaries is in compliance with the terms of the Company Permits. Except as
disclosed in SCHEDULE 3.21 hereto, neither the Company nor any of the
Subsidiaries is in material violation of any law, ordinance or regulation of any
Governmental Entity.
SECTION 3.22 FINDERS' FEES. Except for Goldsmith, Agio, Helms
and Company, whose fee shall be paid by Sellers, no person acting on behalf of
Sellers has claims to, or is entitled to, under any contract or otherwise, any
payment as a broker, finder or intermediary in connection with the origin,
negotiation, execution or consummation of the transactions provided for in this
Agreement or the Related Agreements.
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SECTION 3.23 TRANSACTIONS WITH CERTAIN PERSONS. Except as
disclosed on SCHEDULE 3.23 and SCHEDULE 3.13, hereto, no current or former
director, officer, employee or shareholder of the Company, the Subsidiaries or
any of their Affiliates (as defined below) or family members or trusts for the
benefit of any such person or persons has any interest in any property, real or
personal, tangible or intangible, used in or pertaining to the business of the
Company or any of the Subsidiaries since October 1, 1994, and there have been no
transactions between the Company and any current or former director, officer,
employee or shareholder of the Company or any of the Subsidiaries or their
Affiliates except employment arrangements as disclosed in this Agreement or the
SCHEDULES hereto. As used in this Agreement, the word "Affiliate" shall have the
same meaning as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as
amended.
SECTION 3.24 GENERAL REPRESENTATION AND WARRANTY. To Sellers'
Knowledge, neither this Agreement nor any SCHEDULE or other document or
information furnished by or on behalf of Sellers in connection with this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements contained herein or therein not
misleading.
Neither the Company, any Seller nor any of their respective
representatives, agents or affiliates shall be deemed to have made to Buyer or
any other person any representation or warranty other than as expressly made in
this Agreement, any SCHEDULE hereto or any Related Agreement. Except as set
forth in this Agreement, any SCHEDULE hereto or any Related Agreement neither
the Company, any Seller nor any of their respective representatives, agents or
affiliates makes any representation or warranty regarding any projections,
estimates, budgets or forward-looking information heretofore delivered to or
made available to Buyer or any other person regarding future revenues, expenses
or expenditures or future results of operations; provided, however, that Sellers
believe that all such forward-looking information is based on reasonable
assumptions and do not believe that any such information is misleading, but
further provided that in no event shall Sellers be deemed to give any
representation or warranty as to general economic conditions or otherwise be
liable therefor.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
SECTION 4.01 ORGANIZATION. Buyer is a corporation
duly organized, validly existing and in good standing under the
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laws of the state of its incorporation and has all requisite power and
authority, corporate and other, and all other necessary governmental approvals
to own, lease and operate its properties and to carry on its business as now and
heretofore being conducted except where the failure to be so organized, existing
and in good standing or to have such power, authority, and governmental
approvals would not have a material adverse effect on Buyer.
SECTION 4.02 CORPORATE AUTHORITY. Buyer has all requisite
power and authority, corporate and other, to execute and deliver this Agreement
and the Related Agreements and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance of this Agreement
and the Related Agreements and the consummation of the transactions contemplated
hereby and thereby have been duly and effectively authorized by all necessary
corporate action on the part of Buyer and no other corporate proceedings on the
part of Buyer are necessary to authorize this Agreement and the Related
Agreements or to consummate the transactions contemplated hereby and thereby.
This Agreement and the Related Agreements have been duly executed and delivered
by Buyer and constitute valid and binding obligations of Buyer, enforceable
against it in accordance with their respective terms.
SECTION 4.03 NO VIOLATION. Except as described in SCHEDULE
4.03 hereto or as contemplated by Section 4.05 hereof, the execution and
delivery of this Agreement and the Related Agreements and the consummation of
the transactions contemplated hereby and thereby will not result in any
Violation pursuant to (i) any provision of the Restated Certificate of
Incorporation, as amended, or By-laws, as amended, of Buyer or (ii) any
provision of any loan or credit agreement, note, mortgage, indenture, lease,
benefit plan or other agreement, obligation, instrument, permit, concession,
franchise, license or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Buyer or its properties or assets.
Except as described in SCHEDULE 4.03, no material contract, indenture, mortgage
or loan agreement of Buyer requires the consent or approval of any party thereto
in connection with this Agreement or the transactions contemplated hereby.
SECTION 4.04 CONSENTS AND APPROVALS. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Buyer in connection with
the execution and delivery of this Agreement and the Related Agreements by Buyer
or the consummation by Buyer of the transactions contemplated hereby and
thereby, the failure to obtain which would have a material adverse effect on
Buyer or the transactions contemplated hereby, except for the filing of a
pre-merger notification report by Buyer under the HSR Act.
<PAGE>
- 31 -
SECTION 4.05 FINDERS' FEES. No person acting on behalf of
Buyer has claims to, or is entitled to, under any contract or otherwise, any
payment as a broker, finder or intermediary in connection with the origin,
negotiation, execution or consummation of the transactions provided for in this
Agreement or the Related Agreements.
SECTION 4.06 INVESTMENT INTENT; NO MARKET FOR SHARES. Buyer is
purchasing the Shares for its own account and not with a view towards their
distribution within the meaning of Section 2(11) of the Securities Act of 1933,
as amended (the "Securities Act"). Buyer acknowledges that the Shares are not
registered under the Securities Act or any state securities laws, and that there
is no established trading market or exchange or other ready source of liquidity
for the Shares.
SECTION 4.07 FINANCING. Buyer is diligently pursuing financing
sufficient to pay the Purchase Price at Closing and has provided Sellers with a
copy of a letter from Fleet Bank with respect to such financing.
ARTICLE V
COVENANTS OF SELLERS
SECTION 5.01 CONDUCT OF BUSINESS PENDING CLOSING.
From the date of this Agreement to the Closing Date:
(a) NEGATIVE COVENANTS. Except as otherwise expressly provided
by this Agreement or as Buyer may otherwise consent to in writing, Sellers shall
cause the Company and each of the Subsidiaries not to engage in any activity or
enter into any transaction outside of the ordinary and usual course of its
business or which would be inconsistent with its past practice or with the terms
of this Agreement or which would render inaccurate as of the Closing Date any of
the representations and warranties set forth in Article III as if such
representations and warranties were made at and as of the Closing Date. Without
limiting the generality of the foregoing, Sellers shall cause the Company and
each of the Subsidiaries not to do any of the following: (i) undergo any change
in its condition (financial or other), properties, assets, liabilities, business
or operations except changes in the ordinary and usual course of its business
and consistent with its past practice and which have not been, either in any
case or in the aggregate, materially adverse to it; (ii) engage in any of
action, activity or practice inconsistent with the ordinary and routine actions,
activities and practices it has previously followed, the effect of which would
be to reduce Funded Debt; (iii) declare, set aside, or pay any dividend or other
distribution in respect of its capital stock or make any direct or indirect
redemption, purchase or other acquisition of
<PAGE>
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any shares of its capital stock or make any payment to Sellers except payments
of employment compensation in the ordinary and usual course of the Business
consistent with past practice and payments under the LICO, Inc., ASI,
LICO-Conveyor and LICO-Steel Management Profit Sharing Plans and the ASI
Incentive Plan (the "Ongoing Plans"); (iv) issue or sell any shares of its
capital stock or any options, warrants or other rights to purchase any such
shares or any securities convertible into or exchangeable for such shares or
take any action to reclassify or recapitalize or split up its capital stock; (v)
mortgage, pledge or subject to any material lien, lease, security interest,
encumbrance, or other restriction, any of its properties or assets or to such
restriction outside of the ordinary course of its business whether or not
material; (vi) acquire or dispose of any interest in any asset or property
except the purchase of materials and supplies and the sale of inventory in the
ordinary and usual course of its business and consistent with its past practice;
(vii) forgive or cancel any debt or claim, waive any right, or, except in the
ordinary and usual course of its business and consistent with its past practice
incur or pay any liability or obligation; (viii) adopt or amend any profit
sharing plan, agreement, arrangement or practice for the benefit of any
director, officer or employee or change the compensation (including bonuses) to
be paid to any director, officer or employee; (ix) suffer any damage,
destruction or loss (whether or not covered by insurance); (x) amend or
terminate any material contract, agreement or lease; (xi) experience any
material labor difficulty, or loss of employees or customers; (xii) enter into
any collective bargaining agreement; (xiii) sell or grant or transfer to any
party or parties any license, or grant an option to acquire a license to
manufacture or sell any of the products of the Company or any of the
Subsidiaries, or to use any trademark, service mark, trade name, copyright,
patent or pending application for any of the foregoing, or any trade secret or
know-how of the Company or any of the Subsidiaries; (xiv) merge or consolidate
or enter into a binding share exchange or any other business combination or
acquire any stock, equity interest or business of any other person; (xv) declare
any bonus or increase in the salary or compensation of any employee except in
the ordinary course of business consistent with past practices; (xvi) change the
accounting methods or practices followed by it; (xvii) without limiting the
generality of any of the foregoing, enter into any transaction except in the
ordinary and usual course of its business and consistent with its past practice;
or (xviii) agree to, permit or suffer any of the acts, transactions or other
things described in Subsections (i) through (xvii) of this Section 5.01.
(b) CONDUCT OF BUSINESS. Sellers shall use their
commercially reasonable efforts to cause the Company and each of
the Subsidiaries to preserve intact its business organization, to
retain its present officers and employees and to preserve its
<PAGE>
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good will with all suppliers, customers, employees and others having business
relations with it.
(c) ACCESS TO INFORMATION. Sellers shall cause the Company and
each of the Subsidiaries to afford Buyer and its representatives access, during
normal business hours and upon reasonable notice, to all of the assets,
properties, books, records, and agreements of the Company or any of the
Subsidiaries, and shall furnish to Buyer and its representatives such
information regarding the Company or any of the Subsidiaries as Buyer may
reasonably request. Sellers shall cooperate with Buyer in visiting or contacting
employees and customers of, and persons having other business relationships
with, the Company or any of the Subsidiaries as Buyer shall specify prior to the
Closing. Sellers shall also cooperate with Buyer in an inspection of the
Premises and all improvements thereon, including, without limitation, an
environmental audit of the Premises. The investigation by Buyer and furnishing
of information to Buyer shall not affect the right of Buyer to rely on the
representations, warranties, covenants and agreements of Sellers in this
Agreement.
(d) TRANSFERS OR RESTRICTIONS. No Seller shall sell, transfer
or otherwise dispose of any of the Shares or any interest therein or subject the
same to any Liens.
(e) DEFERRED COMPENSATION ARRANGEMENTS. Prior to the Closing
Date, the Company and the Subsidiaries shall satisfy all deferred compensation
obligations to their officers pursuant to the agreements referred to in SCHEDULE
3.18(C)(V) hereto at a cost that shall not exceed the cash surrender value of
the life insurance policies owned by the Company or the Subsidiaries insuring
the lives of such officers.
SECTION 5.02 CHANGE IN REPRESENTATIONS AND WARRANTIES.
(a) NOTICE OF INACCURACY. In the event any Seller learns that
any of the representations and warranties of Sellers contained in or referred to
in this Agreement or any SCHEDULE hereto is or will become inaccurate, such
party shall give immediate detailed written notice thereof to Buyer.
(b) WAIVER OF BUYER DISCOVERED BREACH OF SELLERS. The failure
of Buyer to give written notice to Sellers, on or prior to the Closing Date, of
any breach or violation, of which it has actual knowledge at such time and which
is unknown to Sellers, of any representations, warranties or covenants of this
Agreement or any SCHEDULE hereto made by Seller shall constitute and be deemed a
waiver of any such breach, violation and claims arising therefrom which Buyer
might have otherwise asserted under this Agreement, but such waiver shall only
be to the extent of Buyer's
<PAGE>
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Damages (as hereinafter defined) of which Buyer had actual knowledge as of the
Closing Date.
SECTION 5.03 REPAYMENT OF FUNDED DEBT. At least three (3) days
prior to the Closing, Sellers shall notify Buyer of the amount necessary to
repay at the Closing all Funded Debt. If Buyer elects to repay all Funded Debt
at the Closing, the Sellers will arrange to have representatives of the lender
or lenders present to, or will otherwise make provision for, tender to Buyer at
the Closing evidence of the payment and discharge of the Funded Debt and
releases of all security interests on the assets of the Company and the
Subsidiaries securing the Funded Debt.
SECTION 5.04 REASONABLE EFFORTS TO CONSUMMATE TRANSACTIONS.
Subject to the terms and conditions herein provided, Sellers agree to use
commercially reasonable efforts to take, or to cause to be taken, all reasonable
actions and to do, or to cause to be done, all reasonable things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated
hereby, including the satisfaction of all conditions thereto set forth in this
Agreement. Such actions shall include, without limitation, exerting their best
efforts to obtain the consents of all persons or entities whose consent is
reasonably necessary to effectuate the transactions contemplated hereby, and
effecting all other necessary registrations and filings, including but not
limited to, filings under the HSR Act and all other necessary filings with any
Governmental Entity.
SECTION 5.05 FURTHER ASSURANCES. After the Closing, Sellers
shall assist and cooperate with Buyer in effecting a transition of ownership of
the Company to Buyer without a material disruption of the operations of the
Company or any of the Subsidiaries and in preserving the goodwill of its
customers and others having business relationships with it.
SECTION 5.06 TRANSITION ASSISTANCE. Robert A. Hoehn and Mike
B. McKee each agree that, following the Closing, (i) Robert A. Hoehn shall
continue in the full-time employ of the Company for a period of at least 12
months following the Closing and at least 3 months after giving Buyer written
notice of his intent to terminate his employment and (ii) Mike B. McKee shall
continue in the full-time employ of the Company for at least 3 months after
giving written notice of his intent to terminate his employment, for the purpose
of providing to Buyer such assistance as Buyer shall reasonably require in
transitioning the ownership of the Business to Buyer. While employed by the
Company, Buyer shall cause the Company to pay to Messrs. Hoehn and McKee the
compensation specified on SCHEDULE 5.06 hereto. Messrs. Hoehn and McKee each
acknowledge that his covenant to remain in the employ of the Company following
the Closing in accordance with
<PAGE>
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this Section 5.06 is a material inducement to Buyer to enter into the
transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS OF BUYER
SECTION 6.01 CONDUCT OF BUSINESS PENDING THE CLOSING. Except
as otherwise provided in this Agreement, or as Sellers may otherwise consent to
in writing, Buyer shall not, pending the Closing, engage in any activity or
enter into any transaction (i) which would be inconsistent with the terms of
this Agreement; or (ii) which would render inaccurate as of the Closing Date any
of its representations and warranties set forth in this Agreement as if such
representations and warranties were made at and as of the Closing Date.
SECTION 6.02 REASONABLE EFFORTS TO CONSUMMATE TRANSACTIONS.
Subject to the terms and conditions herein provided, Buyer agrees to use its
commercially reasonable efforts to take, or to cause to be taken, all reasonable
actions and to do, or to cause to be done, all reasonable things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated
hereby, including the satisfaction of all conditions thereto set forth herein.
Such actions shall include, without limitation, exerting its best efforts to
obtain the consents of its lenders and others whose consent is reasonably
necessary to effectuate the transactions contemplated hereby, and effecting all
other necessary registrations and filings, including but not limited to, filings
under the HSR Act and all other necessary filings with any Governmental Entity.
SECTION 6.03 CHANGE IN REPRESENTATIONS AND WARRANTIES.
(a) NOTICE OF INACCURACY. In the event Buyer learns that any
of the representations and warranties of Buyer contained in or referred to in
this Agreement or any SCHEDULE hereto is or will become inaccurate, Buyer shall
give immediate detailed written notice thereof to Sellers.
(b) WAIVER OF SELLER DISCOVERED BREACH OF BUYER. The failure
of Sellers to give written notice to Buyer, on or prior to the Closing Date, of
any breach or violation, of which any Seller has actual knowledge at such time
and which is unknown to Buyer, of any representations, warranties or covenants
of this Agreement or any SCHEDULE hereto made by Buyer shall constitute and be
deemed a waiver of any such breach, violation and claims arising therefrom which
Sellers might have otherwise asserted under this Agreement, but such waiver
shall only be to the extent
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of damages of which any Seller has actual knowledge as of the Closing Date.
SECTION 6.04 BONUS PLANS. Buyer shall continue or cause to be
continued the Ongoing Plans for the benefit of the eligible participants therein
for the periods ending March 31, 1998 and, excluding Robert A. Hoehn and Mike B.
McKee, March 31, 1999, on the same terms as provided (as of the date hereof) and
shall in good faith make all payments to such participants due thereunder.
SECTION 6.05. BUYER'S BENEFIT PLANS. To the extent permitted
under applicable law and except as otherwise expressly prohibited by the terms
of the relevant plans, Buyer shall treat service with the Company and the
Subsidiaries as if it were service with the Buyer but only for purposes of
eligibility and vesting under Buyer's pension plans. Buyer shall treat the time
insured under the Company's welfare benefit plans as if it were the same time
insured under Buyer's welfare benefit plans only for purposes of eligibility and
for determining pre-existing condition limitations. This covenant shall be
applicable only to employees of the Company and the Subsidiaries on the Closing
Date and does not represent a commitment by Buyer to offer any of its benefit
plans to any employees of the Company or the Subsidiaries.
ARTICLE VII
NON-COMPETITION AND NON-DISCLOSURE
SECTION 7.1 NON-COMPETITION AND NON-DISCLOSURE. Except as
provided in Section 7.2 below, following the Closing Date and for 10 years
thereafter, each Seller and each person who is a grantor, creator, member,
partner or beneficial owner of any Seller (a "Related Person") agrees not to:
(a) engage or become interested, directly or
indirectly, as owner, employee, partner, through stock ownership (except
ownership of less than three percent (3%) of the number of shares outstanding of
any securities which are listed for trading on any securities exchange),
investment of capital, lending of money or property, rendering of services, or
otherwise, whether alone or in association with others, in the operation of any
business or enterprise in any way competitive to the Business anywhere in the
world;
(b) solicit or accept orders for goods or
services competitive to those heretofore provided or sold by the Business from
any then or previous customer of the Business or otherwise induce or attempt to
induce any such customer to reduce such customer's patronage of the Business;
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(c) disclose the names of any such customers to
any other person, business organization or entity;
(d) solicit any employee of the Business to leave
the employ of the Business; and
(e) divulge, communicate, or utilize any
confidential information of or pertaining to the business or affairs of the
Company or any of the Subsidiaries.
SECTION 7.2 USE OF NAMES. Following the Closing, each Seller
and each Related Person shall not use the names "LICO, Inc.," "Automatic
Systems, Inc.," "LICO Conveyor Company," "LICO Steel, Inc.," "Automated Systems
Conveyors Ltd.," "ASI of Australia Pty Ltd.," "LICO International Corporation"
or any variation thereof in any organization or enterprise or business.
SECTION 7.3 CERTAIN LIMITATIONS. The provisions of Section
7.1(a) and (b) above shall only apply: (i) for a period of 10 years for Robert
A. Hoehn and Mike B. McKee; (ii) for a period of 5 years for William Jerry
Moore, Donald P. Pruett and Terry F. Verkler; (iii) for a period of 3 years
following termination of employment with the Company or any of its affiliates
(except for a termination by the Company or its affiliates without Cause as
defined below whereupon such obligations shall cease) for any other Seller or
Related Person who is employed by the Company or any of its affiliates on the
date hereof; and (iv) for no period after the Closing Date for an individual
Seller or a Related Person who is not an employee of the Company or its
Subsidiaries on the date hereof. For purposes of this Section "Cause" shall mean
any of the following:
(a) such employee's willful malfeasance or
misfeasance towards the Company or any of its affiliates;
(b) such employee's failure to discharge all or
any material part of his or her duties or obligations to the Company or any of
its affiliates as have been customarily performed by his or her position, after
notice thereof and a reasonable opportunity to cure such failure;
(c) such employee's conviction of a misdemeanor
involving moral turpitude or the conviction of any felony;
(d) misappropriation of funds or breach of
fiduciary duty against the Company or any of its affiliates or any customer,
vendor or affiliate of the Company or any of its affiliates, including but not
limited to any acts of material personal enrichment of such employee or
affiliates of such employee at the expense of the Company or any of its
affiliates or any customer, vendor or affiliate of the Company or any of its
affiliates; or
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(e) a failure by such employee to keep confidential the trade
secrets and other material proprietary information of the Company or any of its
affiliates.
SECTION 7.4 EQUITABLE REMEDIES. Each Seller specifically
acknowledges and agrees that the remedy at law for any breach of any provision
of this Article VII will be inadequate and that Buyer, in addition to any other
relief available to it, shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damage.
SECTION 7.5 SEVERABILITY. If any provision of this Article VII
shall for any reason be held to be excessively broad as to any activity or
subject, it shall be construed, by limiting and reducing it, to be enforceable
to the extent compatible with applicable law. If any provision in this Article
VII shall, notwithstanding the preceding sentence, be held illegal or
unenforceable, such illegality or unenforceability shall not affect any other
provision of this Article VII but this Agreement shall be construed as if such
illegal or unenforceable provision had never been contained herein.
SECTION 7.6 NO WAIVER. The rights of Buyer and obligations of
Sellers set forth in this Article VII are in addition to, and not in lieu of,
all other rights and obligations provided by applicable law.
SECTION 7.7 ACKNOWLEDGEMENTS. At Closing, Sellers shall cause
each Related Party to execute a writing, in form and content satisfactory to
Buyer, acknowledging that he, she or it is bound by the terms of this Article
VII.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF
BUYER TO CONSUMMATE CLOSING
SECTION 8.01 CONDITIONS. The obligation of Buyer to consummate
the Closing is subject to the satisfaction at or prior to the Closing Date of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Sellers set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date and Buyer shall have received
a certificate signed by the chief executive officer and the chief financial
officer of the Company and each Seller to such effect.
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(b) PERFORMANCE OF OBLIGATIONS OF SELLERS. Sellers shall have
performed in all material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date, and Buyer shall have
received a certificate signed by the chief executive officer and the chief
financial officer of the Company and by each Seller to such effect.
(c) OPINION. Buyer shall have received an opinion from Bryan
Cave LLP, counsel to Sellers, dated the Closing Date, in form and substance
reasonably satisfactory to Buyer's counsel.
(d) RELEASES. Sellers shall each have furnished to Buyer at
the Closing duly executed general releases of liabilities and obligations in
favor of the Company and each of the Subsidiaries executed by each Seller and by
the directors and officers of the Company and each of the Subsidiaries, such
releases to be in the form attached hereto as SCHEDULE 8.01(D).
(e) RESIGNATIONS. Buyer shall have received the written
resignation of those directors of the Company and any of the Subsidiaries as may
be requested by Buyer at least three days prior to the Closing and revocations
of banking authorizations and powers of attorney in favor of such officers and
directors as Buyer shall have theretofore requested.
(f) ADEQUATE AND AVAILABLE FINANCING. Buyer shall have
obtained commitments in such amounts, and on such terms as are acceptable to
Buyer in its sole discretion, for financing of the transactions contemplated
hereby and funding shall be made available to Buyer on the Closing Date as
provided in such commitments.
(g) ESTOPPEL CERTIFICATES. Buyer shall have received from each
lessor of the Leased Premises certificates reasonably satisfactory in form and
substance to Buyer regarding the continuing validity of the leases of the Leased
Premises and the absence of any breach or basis for termination thereof.
(h) DISCHARGE OF FUNDED DEBT. If Buyer elects to repay Funded
Debt at Closing pursuant to Section 5.03, then Buyer shall have received from
the lender or lenders evidence of payment and discharge of the Funded Debt and
releases of all security interests on the assets of the Company and the
Subsidiaries securing the Funded Debt in form and substance reasonably
satisfactory to Buyer.
(i) CONSENTS. Buyer shall be assured that all permits,
licenses and other governmental and official authorizations necessary for the
Company or any of the Subsidiaries to continue to conduct its business as
heretofore conducted and to consummate the transactions contemplated by this
Agreement have been obtained and will be in effect including any
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necessary consents under all contracts, agreements and commitments to which the
Company or any of the Subsidiaries is a party. All applicable waiting periods,
if any, under the HSR Act shall have expired or have been terminated. Buyer
shall be reasonably satisfied that its acquisition of the Shares shall not
adversely affect the prospects of the Company or any of the Subsidiaries and
that material contractual relationships of the Company or any of the
Subsidiaries shall not be thereby adversely affected.
(j) NO ADVERSE CHANGE. There shall have been, in the good
faith reasonable judgment of Buyer, no material adverse change in the business,
properties, operations, financial condition, prospects or earnings of the
Company or any of the Subsidiaries since the date of this Agreement.
(k) OTHER CLOSING DOCUMENTS. Buyer shall have received, on and
as of the Closing Date, and such other agreements and instruments as Buyer shall
reasonably request, in each case reasonably satisfactory in form and substance
to Buyer.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF SELLERS
TO CONSUMMATE CLOSING
SECTION 9.01 CONDITIONS. The obligation of Sellers to
consummate the Closing is subject to at or prior to the Closing Date of the
satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, and Sellers shall have received a
certificate signed on behalf of Buyer to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF BUYER. Buyer shall have
performed in all material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date, and Seller shall have
received a certificate signed on behalf of Buyer to such effect.
(c) OPINION. Sellers shall have received an opinion from
Phillips, Lytle, Hitchcock, Blaine & Huber LLP, counsel to Buyer, dated the
Closing Date, in form and substance reasonably satisfactory to Sellers' counsel.
(d) RELEASE OF GUARANTIES. If Buyer does not discharge
the Funded Debt at the Closing, Buyer shall obtain
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releases of the personal guaranties of Robert A. Hoehn and Mike B. McKee with
respect to the Funded Debt.
(e) HSR ACT. All applicable waiting periods, if any,
under the HSR Act shall have expired or have been terminated.
ARTICLE X
TERMINATION AND AMENDMENT
SECTION 10.01 TERMINATION. This Agreement may be terminated at
any time prior to the Closing Date:
(a) by mutual consent of the parties hereto;
(b) by Buyer (i) if there has been a material breach of any
representation, warranty, covenant or agreement on the part of Sellers set forth
in this Agreement which breach has not been cured, in the case of a
representation or warranty, prior to the Closing or, in the case of a covenant
or agreement, within ten (10) business days following receipt by Sellers of
notice of such breach, or (ii) if any permanent injunction or other order of a
court or other competent authority preventing the consummation of the sale and
transfer of the Shares shall have become final and non-appealable;
(c) by Sellers (i) if there has been a material breach of any
representation, warranty, covenant or agreement on the part of Buyer set forth
in this Agreement which breach has not been cured, in the case of a
representation or warranty, prior to the Closing or, in the case of a covenant
or agreement, within ten (10) business days following receipt by Buyer of notice
of such breach, or (ii) if any permanent injunction or other order of a court or
other competent authority preventing the consummation of the sale and transfer
of the Shares shall have become final or non-appealable; or
(d) by either Buyer or Sellers if the Closing shall
not have been consummated before April 30, 1998.
SECTION 10.02 EFFECT OF TERMINATION. In the event of a
termination of this Agreement by either Sellers or Buyer as provided in Section
10.01, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of Buyer or its officers or directors or
Sellers, except to the extent that such termination results from the breach by a
party hereto of any of such party's representations and warranties or a breach
of such party's covenants or agreements set forth in this Agreement or the Other
Agreements.
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SECTION 10.03 EXTENSION; WAIVER. At any time prior to the
Closing Date, Buyer and Sellers, by action duly taken, may, to the extent
legally allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of Buyer or
Sellers hereto to any such extension or waiver shall be valid only if set forth
in a written instrument signed on behalf of such party.
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
SECTION 11.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS.
(a) SURVIVAL GENERALLY. The representations, warranties,
covenants, agreements and undertakings of Buyer and Sellers in this Agreement,
the SCHEDULES hereto and the Related Agreements and all rights of Buyer and
Sellers with respect thereto shall survive the Closing and the sale and transfer
of the Shares; provided, however, that survival of the representations and
warranties of the parties contained in this Agreement shall be subject to the
limitations provided herein. Except as provided in the context of the
representations and warranties set forth in Section 3.11 of this Agreement,
Buyer agrees to release all contribution claims against Sellers arising under
any Environmental Law, as well as any common law regarding the protection of
health, safety and the environment,including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time.
(b) (i) INDEMNITY OBLIGATIONS OF SELLERS. Each Seller hereby
agrees to indemnify and hold Buyer harmless from and against, and to reimburse
Buyer for or in respect of, any and all losses, damages, deficiencies,
liabilities, claims, economic injury, obligations, expenses (including, without
limitation, all out-of-pocket expenses, reasonable investigation expenses and
reasonable fees and disbursements of accountants and counsel) of any nature
whatsoever (collectively, "Buyer's Damages"), incurred by Buyer arising out of,
based upon, or by reason of (A) any breach of any representation and warranty of
any of Sellers which is contained in this Agreement or in any Related Agreement,
or in any SCHEDULE or certificate delivered pursuant thereto; or (B) any breach
or nonfulfillment of, or any failure to perform, any of the covenants,
agreements or undertakings of Sellers which are contained in or made pursuant to
this Agreement or any Related
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Agreement. Buyer's Damages shall be reduced by an amount equal to one-half of
any recoveries actually received by the Company or its Subsidiaries (net of all
expenses, cross-claims, counter-claims or off-sets against the Company or the
Subsidiaries or taxes attributable to such recoveries) from the Rapid or
Whiteman AFB claims referred to in SCHEDULE 3.19. If any Buyer's Damages have
been paid to Buyer prior to the receipt by the Company or its Subsidiaries of
the recoveries referred to in the prior sentence, the amount of such reduction
in Buyer's Damages shall to the extent such Damages have been paid by Sellers,
be paid to Sellers. For example only, if there is a $5 million Buyer's Damage
Claim and Buyer is paid $4.25 million (net of the $750,000 Sellers'
Indemnification Threshold), and there is a net recovery on the Rapid Claim of
$2.0 million, then Sellers shall be paid $1.0 million. In order to provide for
Sellers' Indemnity Threshold (as hereinafter defined) the parties agree that for
the purposes of this Article XI, but except with respect to Sections 3.06 and
3.24, a representation shall be deemed false and a warranty, agreement, covenant
or undertaking shall be deemed breached or not fulfilled if the same would have
been false, breached or not fulfilled had such representation, warranty,
agreement, covenant or undertaking not been qualified by the words "materially",
"in all material respects" or words of similar import.
Subject to the limitations as set forth in Section 11.01(c)
hereof, Sellers agree to indemnify and hold Buyer harmless from and against and
reimburse Buyer for any and all Buyer's Damages, arising out of, attributable
to, resulting from or incurred with respect to any breach of the representations
and warranties set forth in Section 3.18 as to any benefit plan, fund,
arrangement or practice referred to in said Section 3.18 ("Section 3.18 Plan").
In determining whether there has been a breach of a representation or warranty
contained in Section 3.18 as to any Section 3.18 Plan, any deficiencies or
potential deficiencies disclosed in SCHEDULES 3.18(C)(I),(II), (III),(IV) AND
(V) as to any such Section 3.18 Plan which are referenced in a disclosure
labeled "List of Special Benefit Disclosures" included in Schedule 3.18, shall
be disregarded, and the representations and warranties of Section 3.18 shall be
deemed not qualified by such disclosures. The foregoing is to implement the
agreement of the parties that the risk of such deficiencies shall be borne by
Sellers. This provision shall be deemed to constitute notice to Sellers by Buyer
under Section 5.02(b) that some or all of the matters disclosed or referred to
in the List of Special Benefit Disclosures constitute or may constitute breaches
of representations and warranties contained in Section 3.18 for which Sellers,
by reason of this provision, will have indemnification obligations. Sellers'
indemnification obligation hereunder shall be fully applicable if Buyers'
Damages are incurred in connection with an application to or proceeding
involving the Internal Revenue Service or other
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governing legal authority for relief from any matter for which Sellers have an
indemnity obligation hereunder. In addition, notwithstanding that Section 3.18
does not contain a specific representation and warranty on potential withdrawal
liability from Multiemployer Plans, Sellers agree that to the extent incurred by
Buyer, Buyer's Damages shall include the excess of the sum of the aggregate
potential liability of the Company and all members of the Controlled Group (A)
if they were to withdraw from the Multiemployer Plans on the Closing Date and
(B) arising from any of the Multiemployer Plan's status as an insolvent plan,
being in reorganization or having an accumulated funding deficiency as of the
Closing Date, OVER $250,000.
(b) (ii) INDEMNITY OBLIGATIONS OF BUYER. Buyer hereby agrees
to indemnify and hold Sellers harmless from and against, and to reimburse
Sellers for or in respect of, any and all losses, damages, deficiencies,
liabilities, claims, economic injury, obligations, expenses (including, without
limitation, all out-of-pocket expenses, reasonable investigation expenses and
reasonable fees and disbursements of accountants and counsel) of any nature
whatsoever, (collectively "Sellers' Damages") incurred by Sellers arising out
of, based upon, or by reason of (A) any breach of any representation or warranty
of Buyer which is contained in this Agreement or in any Related Agreement, or in
any SCHEDULE or certificate delivered pursuant thereto; or (B) any breach or
nonfulfillment of, or any failure to perform, any of the covenants, agreements
or undertakings of Buyer which are contained in or made pursuant to this
Agreement or any Related Agreement.
(c) LIMITATIONS ON SELLERS' INDEMNIFICATION OBLIGATIONS.
Subject to the remaining provisions of this Section 11.01(c), notwithstanding
anything to the contrary herein, any claim by Buyer against Sellers under
Article XI of this Agreement for a breach of representation or warranty shall be
payable by Sellers only in the event and to the extent that the accumulated
amount of Buyer's Damages in respect of Sellers' obligations under this Article
XI for breaches of representations and warranties shall exceed in the aggregate
the amount of $750,000 (the "Sellers' Indemnification Threshold"); and at such
time as the aggregate amount of Buyer's Damages in respect of the obligations of
Sellers for breaches of representations and warranties shall exceed the Sellers'
Indemnification Threshold, Sellers shall thereafter be liable on a
dollar-for-dollar basis for the full amount of all Buyer's Damages for a breach
of representation or warranty in excess of the Sellers' Indemnification
Threshold, it being the intention of the parties that the initial $750,000 of
Buyer's Damages excluded by reason of the Sellers' Indemnification Threshold
would not be recoverable against Sellers but would be borne by Buyer, except
that Buyer's Damages for any breach of the representations and warranties of
Sellers set forth in Sections 3.02 through 3.05 and
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Section 3.22 of this Agreement or any knowing breach of a representation or
warranty shall not be subject to the Sellers' Indemnification Threshold but
shall be payable by Sellers on a dollar-for-dollar basis without any exclusion
therefor or reduction thereof.
Except as provided in subsections (A)(i) or (ii) below and
subject to Sellers' Indemnification Threshold and to the last sentence of this
paragraph, the Hoehn Family LLC and the McKee Family Limited Partnership shall
each be liable for one-half of Buyer's Damages. The indemnification obligations
of Sellers other than the Hoehn Family LLC and the McKee Family Limited
Partnership hereunder are subject to the limitation that each Seller other than
the Hoehn Family LLC and the McKee Family Limited Partnership shall be liable
solely for such Seller's "Proportionate Share" of Buyer's Damages provided that
(A) such a Seller who has breached (i) representations and warranties regarding
such Seller's Shares in Section 3.02(a) hereof or such Seller's authority and
capacity in Section 3.03 hereof; or (ii) the covenants contained in Article VII
hereof, shall be solely liable for all Buyer's Damages arising out of such
breach and no other Seller shall be responsible for such breach and (B) Sellers
shall be jointly and severally liable to Buyer for any payment required pursuant
to Section 1.03(c) hereof. For the purposes hereof, the "Proportionate Share" of
any Seller shall mean a fraction equal to (x) the portion of the Purchase Price
paid to such Seller DIVIDED BY (y) the aggregate Purchase Price paid to all
Sellers. Except for Buyer's Damages resulting from a breach of a covenant, a
knowing breach of a representation or warranty or a breach of the warranties
regarding Sellers' shares in Section 3.02(b) hereto, the indemnification
obligations of Sellers, in the aggregate, hereunder are subject to the further
limitation that Sellers shall have no liability to pay Buyer's Damages in excess
of $15,000,000.
(d) DURATION. Except as otherwise provided below, all
representations and warranties of Buyer and Sellers contained in or made
pursuant to this Agreement and the rights of Buyer and Sellers to seek
indemnification or reimbursement with respect thereto, shall survive the Closing
and the representations and warranties contained in Sections 3.02, 3.03, 3.04,
4.02, 4.03 and 4.04 and any SCHEDULE relating thereto shall survive without
limitation. Except in respect of any claims for breach of warranty or
misrepresentation as to which a notice of claim for Buyer's Damages or Sellers'
Damages shall have been given prior to the Relevant Expiration Date (as
hereinafter defined) and except for a claim based upon a misrepresentation or
warranty contained in Sections 3.02, 3.03, 3.04, 4.02, 4.03 and 4.04 and any
SCHEDULE relating thereto which may be made at any time after the Closing Date,
all representations and warranties contained in Articles III and IV and all
rights with respect thereto shall
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expire on the Relevant Expiration Date. The Relevant Expiration Date shall be:
(i) in the event of a misrepresentation or breach of warranty
in Section 3.09 and any SCHEDULE relating thereto, until one
year following the date upon which liability for any claim by
any taxing authority which may result in Buyer's Damages may
be made is barred by all applicable statutes of limitation
(after taking into account any extensions); and
(ii) with respect to all other misrepresentations or breaches
of warranty, fifteen months after the Closing Date.
(e) INDEMNIFICATION PROCEDURES.
(i) In the event any claim, action, suit or
proceeding is made or brought by any third party against Buyer or Sellers (the
"Indemnified Party"), with respect to which an indemnifying party may have
liability under Article XI of this Agreement, the indemnifying party shall, at
its own expense, be entitled to participate in and, to the extent that it shall
wish, jointly and with any other indemnifying party, to assume the defense, with
independent counsel reasonably satisfactory to the Indemnified Party, provided
that in assuming the defense of any such third party claim, action, suit or
proceeding, the indemnifying party acknowledges in writing to the Indemnified
Party that the indemnifying party shall thereafter be liable for any Buyer's
Damages or Sellers' Damages, as the case may be, with respect to such claim,
action, suit or proceeding.
(ii) If the indemnifying parties elect to assume
control of such defense or settlement, they shall conduct such defense or
settlement in a manner reasonably satisfactory and effective to protect the
Indemnified Party fully; such indemnifying parties and their counsel will keep
the Indemnified Party fully advised as to their conduct of such defense or
settlement, and no compromise or settlement shall be agreed or made without the
written consent of the Indemnified Party. In any case, the Indemnified Party
shall have the right to employ its own counsel and such counsel may participate
in such action, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party, when and as incurred, unless (A) the
employment of counsel by the Indemnified Party has been authorized in writing by
the indemnifying parties, (B) the Indemnified Party shall have reasonably
concluded that there may be a conflict of interest between the indemnifying
parties and the Indemnified Party in the conduct of the defense of such action,
(C) the indemnifying parties shall not in fact have
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employed independent counsel reasonably satisfactory to the Indemnified Party to
assume the defense of such action and shall have been so notified by the
Indemnified Party, (D) the Indemnified Party shall have reasonably concluded and
specifically notified the indemnifying party either that there may be specific
defenses available to it which are different from or additional to those
available to the indemnifying party or that such claim, action, suit or
proceeding involves or could have a material adverse effect upon it beyond the
financial resources of the indemnifying parties or the scope of this Agreement,
or (E) the indemnifying parties fail to conduct such defense or settlement in a
manner reasonably satisfactory to protect the Indemnified Party fully. If clause
(B), (C), (D) or (E) of the preceding sentence shall be applicable, then counsel
for the Indemnified Party shall have the right to direct the defense of such
claim, action, suit or proceeding on behalf of the Indemnified Party and the
reasonable fees and disbursements of such counsel shall constitute Buyer's
Damages or Sellers' Damages hereunder.
(iii) If the indemnifying parties do not elect to assume the
defense or any such claim, or if they fail to conduct said defense or settlement
in a manner reasonably satisfactory to protect the Indemnified Party fully, the
Indemnified Party may engage independent counsel selected by the Indemnified
Party to assume the defense and may contest, pay, settle or compromise any such
claim on such terms and conditions as the indemnified party may determine. The
fees and disbursements of such counsel shall constitute Buyer's Damages or
Sellers' Damages hereunder.
(iv) The Indemnified Party and the indemnifying parties, as
the case may be, shall be kept fully informed of such claim, action, suit or
proceeding at all stages thereof whether or not such party is represented by its
own counsel.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Buyer, to
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
<PAGE>
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Attention: Robert L. Montgomery,
Executive Vice President and
Chief Financial Officer
with a copy to
Frederick G. Attea, Esq.
Phillips, Lytle, Hitchcock, Blaine & Huber LLP
3400 Marine Midland Center
Buffalo, New York 14203
and
(b) If to a Seller, to
Robert A. Hoehn and
Mike B. McKee, as Representatives
c/o LICO, Inc.
9230 East 47th Street
Kansas City, Missouri 64133
with a copy to
Thomas W. Van Dyke, Esq.
Bryan Cave LLP
7500 College Boulevard
Suite 1100
Overland Park, Kansas 66210
SECTION 12.02 INTERPRETATION. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation".
SECTION 12.03 COUNTERPARTS; EFFECTIVENESS. This Agreement may
be executed in two or more counterparts, all of which shall be considered
one and the same agreement and shall become effective when two or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart. It is contemplated that several of the shareholders of the Company
may not have executed this Agreement on the date hereof. It is understood and
agreed that this Agreement shall nevertheless be fully binding upon all
signatories to this Agreement as soon as this Agreement is executed by persons
owning in excess of 80% of each class of stock of the Company.
<PAGE>
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SECTION 12.04 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES;
RIGHTS OF OWNERSHIP. This Agreement (including the documents and the instruments
referred to herein) and the Related Agreements, (a) constitute the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof, and (b)
are not intended to and shall not confer upon any person other than the parties
hereto any rights or remedies hereunder.
SECTION 12.05 ACTION BY SELLERS. Sellers hereby irrevocably
authorize and appoint Robert A. Hoehn and Mike B. McKee as their exclusive agent
and attorney ("Representative") who shall on behalf of Sellers make any
amendments or modifications of this Agreement and all other agreements and
documents contemplated hereby and to waive inaccuracies of representations and
warranties or performance or compliance with any of the provisions herein
contained that such Representative believes in such agent's sole discretion, to
be in the best interest of Sellers. The Representative shall take, and Sellers
agree that the Representative shall take, any and all actions which such
Representative believes are necessary or appropriate under this Agreement for
and on behalf of Sellers, as fully as if Sellers were acting on their own
behalf, including, without limitation, defending, consenting to, compromising or
settling all claims for Sellers' Damages or Buyer's Damages, conducting
negotiations with Buyer and its representatives regarding such claims, dealing
with Buyer and taking any and all actions specified in or contemplated by
Article XI of this Agreement and engaging counsel, accountants or other
representatives in connection with the foregoing matters. Buyer shall have the
right to rely upon all actions taken or omitted to be taken by the
Representative pursuant to this Agreement, all of which actions or omissions
shall be legally binding upon each of Sellers. Any action of the Representation
shall require the approval of Robert A. Hoehn and Mike B. McKee.
SECTION 12.06 KNOWLEDGE. For the purposes of this Agreement,
"Sellers' Knowledge" shall mean actual knowledge of any Seller, any Related
Person or any officer or director of the Company or any Subsidiary and any
knowledge that any such person would have acquired upon reasonable inquiry.
SECTION 12.07 GOVERNING LAW. This Agreement shall be governed
and construed in accordance with the internal laws of the State of New York
without regard to any applicable conflicts of law.
SECTION 12.08 ASSIGNMENT. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned or delegated by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties, and any such purported assignment or
delegation shall be void, except that Buyer may assign or
<PAGE>
- 50 -
delegate, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any direct or indirect affiliate of Buyer or any person
to whom Buyer transfers any part of the Business being acquired hereunder.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
SECTION 12.09 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon any such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto will negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner, to the end that the transactions contemplated by this
Agreement are consummated to the extent possible.
SECTION 12.10 PUBLICITY. Buyer and Sellers shall promptly
consult with each other as to the form and substance thereof prior to the
release or issuance of any press release or other public disclosure related to
this Agreement or any other transactions contemplated hereby. Sellers and Buyer
agree not to release or issue any such press release or other public disclosure
without the approval of Sellers and Buyer unless otherwise required by
applicable law.
SECTION 12.11 ENFORCEMENT OF THIS AGREEMENT. The parties
hereto agree that irreparable damage would result in the event that any
provision of this Agreement is not performed in accordance with specific terms
or is otherwise breached. It is accordingly agreed that the parties hereto will
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof.
SECTION 12.12 EXPENSES. Buyer and Sellers shall each bear and
pay all costs and expenses respectively incurred by them in connection with this
Agreement, including, without limitation, fees and expenses of their own
financial consultants, accountants, and counsel. Without limiting the generality
of the foregoing, (i) Sellers shall be solely responsible for and shall pay all
fees of Goldsmith, Agio, Helms and Company in connection with the transactions
contemplated by this Agreement, and (ii) Buyer shall be solely responsible for
and shall pay all fees and expenses of Ernst & Young LLP or such other
accounting firm as conducts the Closing (March 31, 1998) audit of the Company.
<PAGE>
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SECTION 12.13 GUARANTY. Robert A. Hoehn shall hereby
unconditionally guaranty all obligations of the Hoehn Family LLC to Buyer,
including without limitation, obligations arising under this Agreement and any
Related Agreements . Mike B. McKee shall hereby unconditionally guaranty all
obligations of the McKee Family Limited Partnership to Buyer, including without
limitation, obligations arising under this Agreement and any Related Agreements.
Sellers shall cause Robert A. Hoehn and Mike B. McKee to execute a writing, in
form and content satisfactory to Buyer, evidencing these guaranties.
<PAGE>
- 52 -
IN WITNESS WHEREOF, each of the parties hereto have duly executed this
Agreement as of the date first above written.
COLUMBUS MCKINNON CORPORATION
By ______________________________
(Title)
SELLERS
By ______________________________
James O. Barker
By ______________________________
Carl J. Caldarella
By ______________________________
Judy Caldarella
By ______________________________
Steve M. Cassell
David Cimpl Trust under Trust
Agreement dated April 6, 1990
By ______________________________
David Cimpl, as Trustee
William D. Thomas Self Employed
Retirement Trust
By ______________________________
Citruck & Co., as Trustee
By ______________________________
David W. Clark
<PAGE>
- 53 -
By ______________________________
Kirsten D. Clark
By ______________________________
Albert O. Davis
By ______________________________
George J. Dolan
By ______________________________
Mary J. Dolan
By ______________________________
Alfred F. Gundersen
By ______________________________
JoAnn Gundersen
Robert A. Hoehn Declaration of
Trust dated 10/21/83, as amended
from time to time
By ______________________________
Robert A. Hoehn, as Trustee
By ______________________________
David L. Jones
By ______________________________
Donna L. Jones
By ______________________________
Patrick W. Kelly
By ______________________________
Adelynne L. Kelly
By ______________________________
Michael S. Lobb
<PAGE>
- 54 -
Mike B. McKee Revocable Trust
dated January 28, 1993, as
amended from time to time
By ______________________________
Mike B. McKee, as Trustee
By ______________________________
William Jerry Moore
By ______________________________
Barbara Ann Moore
By ______________________________
Joseph S. Palermo
By ______________________________
Judith A. Palermo
Lee W. Peakes Revocable Trust,
dated July 25, 1988
By ______________________________
Lee W. Peakes, as Trustee
By ______________________________
Stephen P. Phillips
By ______________________________
Donald P. Pruett
By ______________________________
Mary L. Pruett
By ______________________________
Ronald T. Ray
By ______________________________
Judy A. Ray
<PAGE>
- 55 -
Van Dyke Enterprises, L.L.C.
By ______________________________
By ______________________________
Donald Lee Van Pelt
By ______________________________
Maida Ann Van Pelt
By ______________________________
Terry F. Verkler
By ______________________________
Norman P. Vernon, Jr.
By ______________________________
Norman P. Vernon
By ______________________________
Susan C. Vernon
By ______________________________
Robert L. Weaver
The Hoehn Family LLC
By ______________________________
Member
Lindsey W. Clark Trust under Trust
Agreement dated December 28, 1992
By ______________________________
Carolyn Kotila, as Successor Trustee
<PAGE>
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Robert D. Clark Trust under Trust
Agreement dated December 28, 1992
By ______________________________
Carolyn Kotila, as Successor Trustee
The McKee Family Limited Partnership
By ______________________________
General Partner
$300,000,000
CREDIT AGREEMENT
Dated as of March 31, 1998
among
COLUMBUS MCKINNON CORPORATION,
as Borrower,
THE BANKS, FINANCIAL INSTITUTIONS AND
OTHER INSTITUTIONAL LENDERS NAMED HEREIN,
as Initial Lenders,
FLEET NATIONAL BANK,
as the Initial Issuing Bank,
FLEET NATIONAL BANK,
as the Swing Line Bank,
and
FLEET NATIONAL BANK,
as Administrative Agent
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS..............................................2
SECTION 1.01. Certain Defined Terms.................................2
SECTION 1.02. Computation of Time Periods..........................25
SECTION 1.03. Accounting Terms.....................................26
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES,
THE LETTERS OF CREDIT AND ALTERNATIVE
CURRENCY LETTERS OF CREDIT...................................................26
SECTION 2.01. The Advances.........................................26
(a) The Revolving Credit Advances.....................26
(b) The Alternative Currency Revolving
Credit Advances................................26
(c) The Swing Line Advances...........................27
(d) Letters of Credit.................................27
(e) Alternative Currency Letters of Credit............28
SECTION 2.02. Making the Advances..................................28
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit.............................32
(a) Request for Issuance..............................32
(b) Letter of Credit Reports..........................32
(c) Drawing and Reimbursement.........................33
(d) Alternative Currency Letters of Credit............34
(e) Failure to Make Letter of Credit Advances
or Alternative Currency Letter of
Credit Advances................................35
SECTION 2.04. Repayment of Advances................................36
(a) Revolving Credit Advances.........................36
(b) Alternative Currency Revolving Credit Advances....36
(c) Swing Line Advances...............................36
(d) Letter of Credit Advances and Alternative
Currency Letter of Credit Advances.............36
SECTION 2.05. Termination or Reduction of the Commitments..........37
(a) Optional..........................................37
(b) Mandatory.........................................37
SECTION 2.06. Prepayments..........................................38
(a) Optional..........................................38
(b) Mandatory.........................................38
SECTION 2.07. Interest.............................................40
(a) Scheduled Interest................................40
(i) Prime Rate Advances......................40
(ii) Eurodollar Rate Advances.................40
(b) Default Interest..................................40
(c) Notice of Interest Rate...........................40
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SECTION 2.08. Fees.................................................40
(a) Revolving Credit Commitment Fee...................40
(b) Letter of Credit and Alternative Currency
Letter of Credit Fees..........................41
(c) Administrative Agent's Fees.......................41
SECTION 2.09. Conversion of Advances...............................42
(a) Optional..........................................42
(b) Mandatory.........................................42
(c) Alternative Currency Revolving Credit Advances....42
SECTION 2.10. Increased Costs, Etc.................................42
SECTION 2.11. Payments and Computations............................44
SECTION 2.12. Taxes................................................45
SECTION 2.13. Sharing of Payments, Etc.............................47
SECTION 2.14. Use of Proceeds......................................48
SECTION 2.15. Defaulting Lenders...................................48
ARTICLE III
CONDITIONS OF LENDING........................................................51
SECTION 3.01. Conditions Precedent to Initial Extension of Credit..51
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance..57
SECTION 3.03. Determinations Under Section 3.01....................59
ARTICLE IV
REPRESENTATIONS AND WARRANTIES...............................................59
SECTION 4.01. Representations and Warranties of the Borrower.......59
ARTICLE V
COVENANTS OF THE BORROWER AND THE SUBSIDIARIES...............................67
SECTION 5.01. Affirmative Covenants................................67
(a) Compliance with Law...............................67
(b) Payment of Taxes, Etc.............................67
(c) Compliance with Environmental Laws................67
(d) Preparation of Environmental Reports..............67
(e) Maintenance of Insurance..........................68
(f) Preservation of Corporate Existence, Etc..........68
(g) Visitation Rights.................................69
(h) Keeping of Books..................................69
(i) Maintenance of Properties, Etc....................69
(j) Compliance with Terms of Leaseholds...............69
(k) Performance of Material Contracts.................69
(l) Transactions with Affiliates......................69
(m) Agreement to Grant Additional Security............70
(n) Performance of Acquisition Documents..............72
(o) Cash Concentration Accounts.......................72
SECTION 5.02. Negative Covenants...................................72
(a) Liens, Etc........................................72
ii
<PAGE>
(b) Debt..............................................73
(c) Lease Obligations.................................75
(d) Fundamental Changes...............................75
(e) Sales, Etc. of Assets.............................76
(f) Investments in Other Persons......................77
(g) Dividends, Etc....................................78
(h) Change in Nature of Business......................78
(i) Charter Amendments................................78
(j) Accounting Changes................................78
(k) Prepayments, Etc. of Debt.........................78
(l) Amendment, Etc. of Acquisition Documents or
Senior Subordinated Note Documents.............79
(m) Amendment, Etc. of Material Contracts.............79
(n) Negative Pledge...................................79
(o) Partnerships, New Subsidiaries....................79
(p) Speculative Transactions..........................80
(q) Capital Expenditures..............................80
(r) Issuance of Stock.................................80
SECTION 5.03. Reporting Requirements...............................80
(a) Default Notice....................................80
(b) Quarterly Financials..............................80
(c) Annual Financials.................................81
(d) Pro Forma Financials..............................82
(e) Annual Forecasts..................................82
(f) ERISA Events and ERISA Reports....................82
(g) Plan Terminations.................................82
(h) Actuarial Reports.................................83
(i) Plan Annual Reports...............................83
(j) Annual Plan Summaries.............................83
(k) Multiemployer Plan Notices........................83
(l) Litigation........................................83
(m) Securities Reports................................83
(n) Creditor Reports..................................83
(o) Agreement Notices.................................83
(p) Revenue Agent Reports.............................84
(q) Environmental Conditions..........................84
(r) Real Property.....................................84
(s) Insurance.........................................84
(t) Management Letters................................84
(u) Other Information.................................84
SECTION 5.04. Financial Covenants..................................85
(a) Funded Debt to EBITDA Ratio.......................85
(b) Interest Coverage Ratio...........................85
(c) Fixed Charge Coverage Ratio.......................85
(d) Minimum Net Worth.................................86
iii
<PAGE>
ARTICLE VI
EVENTS OF DEFAULT............................................................86
SECTION 6.01 Events of Default....................................86
SECTION 6.02. Actions in Respect of the Letters of Credit and
Alternative Currency Letters of Credit
upon Default..............................89
ARTICLE VII
THE ADMINISTRATIVE AGENT.....................................................90
SECTION 7.01. Authorization and Action.............................90
SECTION 7.02. Agent's Reliance, Etc................................90
SECTION 7.03. Fleet and Affiliates.................................91
SECTION 7.04. Lender Party Credit Decision.........................91
SECTION 7.05. Indemnification......................................91
SECTION 7.06. Successor Administrative Agents......................92
ARTICLE VIII
MISCELLANEOUS................................................................93
SECTION 8.01. Amendments, Etc......................................93
SECTION 8.02. Notices Etc..........................................94
SECTION 8.03. No Waiver; Remedies..................................96
SECTION 8.04. Costs and Expenses...................................96
SECTION 8.05. Right of Set-off.....................................97
SECTION 8.06. Binding Effect.......................................98
SECTION 8.07. Assignments and Participations.......................98
SECTION 8.08. Execution in Counterparts...........................101
SECTION 8.09. No Liability of the Issuing Bank....................101
SECTION 8.10. Confidentiality.....................................102
SECTION 8.11. JURISDICTION, ETC...................................102
SECTION 8.12. GOVERNING LAW.......................................102
SECTION 8.13. WAIVER OF JURY TRIAL................................103
iv
<PAGE>
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Alternative Currency Revolving Credit Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Notice of Alternative Currency Borrowing
Exhibit F - Form of Security Agreement
Exhibit G - Form of Intellectual Property Security Agreement
Exhibit H - Form of Subsidiary Guaranty
SCHEDULES
Schedule I Commitments and Applicable Lending Offices
Schedule II Existing Letters of Credit
Schedule 3.01(a)(ix) States in which Loan Parties are Qualified to do Business
Schedule 4.01(b) Subsidiaries
Schedule 4.01(d) Required Authorizations and Approvals
Schedule 4.01(i) Disclosed Litigation
Schedule 4.01(k) Plans; Multiemployer Plans; Welfare Plans
Schedule 4.01(o) Environmental Assessment Reports
Schedule Certain Agreements
Schedule 4.01(r) Pledged Foreign Subsidiaries
Schedule 4.01(t) Open Tax Years
Schedule 4.01(z) Existing Debt (other than Surviving Debt)
Schedule 4.01(aa) Surviving Debt
Schedule 4.01(bb) Owned Real Estate
Schedule 4.01(cc) Leased Real Estate
Schedule 4.01(dd) Material Contracts
Schedule 4.01(ee) Investments
Schedule 4.01(ff) Intellectual Property
Schedule 5.02(a)(iii) Liens
Schedule 5.02(f)(i) Investments in Subsidiaries
Schedule 5.02(f)(vii) Existing Investments
Schedule 5.02(r) Existing Issuances, Etc. of Stock
v
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT (this "Agreement"), dated as of March 31, 1998, by and
among COLUMBUS MCKINNON CORPORATION, a New York corporation (the "Borrower"),
the banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Initial Lenders (the "Initial Lenders"), FLEET
NATIONAL BANK, as Initial Issuing Bank (the "Initial Issuing Bank"), FLEET
NATIONAL BANK, as the Swing Line Bank (as hereinafter defined), and FLEET
NATIONAL BANK, as administrative agent (together with any successor appointed
pursuant to Article VII, the "Administrative Agent") for the Lender Parties (as
hereinafter defined).
PRELIMINARY STATEMENTS:
(1) The Borrower, the lenders party thereto, the Initial Issuing Bank, the
Swing Line Bank and the Administrative Agent are parties to that certain Credit
Agreement, originally dated as of October 16, 1996 (as heretofore amended and in
effect on the date of this Agreement, the "Existing Credit Agreement")
providing, subject to the terms and conditions thereof, for, among other things,
the making of revolving credit loans and term loans to the Borrower.
(2) The Borrower desires to purchase all (100%) of the outstanding Shares
(as hereinafter defined) of LICO, Inc. ("LICO") pursuant to a stock purchase
agreement by and among the Borrower and the shareholders of LICO (the "LICO
Stock Purchase Agreement").
(3) In connection with the Borrower's proposed acquisition of all of the
Shares of LICO, the Borrower desires to make an offering of Senior Subordinated
Notes (as hereinafter defined) in the aggregate principal amount of
$200,000,000, to be used by the Borrower, together with the proceeds of loans
under this Agreement, to finance such acquisition, to pay fees and expenses, to
refinance existing indebtedness, including, without limitation, the Existing
Credit Facility, and for general corporate purposes.
(4) The Borrower has requested that the Lender Parties (as hereinafter
defined) make loans to the Borrower and issue letters of credit having an
aggregate principal and face amount at any one time outstanding of up to Three
Hundred Million Dollars ($300,000,000), to be used by the Borrower, together
with the proceeds from the offering of the Senior Subordinated Notes, (i) to
finance the acquisition of the Shares of LICO pursuant to terms and conditions
of the LICO Stock Purchase Agreement, (ii) to pay fees and expenses, (iii) to
refinance existing indebtedness, including, without limitation, the Existing
Credit Facility, and (iv) for general corporate purposes, and the Lender Parties
have agreed to make such loans and issue such letters of credit all on and
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the parties hereto hereby agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition" means the acquisition by the Borrower of all (100%) of
the Shares of LICO in accordance with the terms and conditions of the LICO Stock
Purchase Agreement.
"Acquisition Documents" means the LICO Stock Purchase Agreement and all
other instruments, agreements and documents prepared or executed and delivered
in connection therewith.
"Additional Collateral Documents" has the meaning specified in Section
5.01(m).
"Additional Cost" means, in relation to any Advance denominated in
Pounds Sterling for any Interest Period applicable to such Advance or in
relation to any overdue amount denominated in Pounds Sterling for any period
relating thereto, the cost (as calculated by the Administrative Agent) imputed
to the Lender(s) making such Advance or owed such overdue amount through a
lending office in the United Kingdom of compliance with the mandatory liquid
assets requirements, if any, of the Bank of England during such Interest Period
or period, as the case may be, expressed as a percentage rate per annum.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Fleet at its
office at Fleet National Bank, 10 Fountain Plaza, Buffalo, New York 14202,
Account No. 1983580, Attention: Loan Administration.
"Advance" means a Revolving Credit Advance, an Alternative Currency
Revolving Credit Advance, a Swing Line Advance, a Letter of Credit Advance or an
Alternative Currency Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 50% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Alternative Currency" means with respect to Alternative Currency
Revolving Credit Sub- Commitments, Alternative Currency Revolving Credit
Advances, Alternative Currency Letter of Credit Commitments or Alternative
Currency Letters of Credit, Danish Crowns, Deutsche Marks
2
<PAGE>
and Pounds Sterling in each case to the extent freely transferable and
convertible into U.S. Dollars.
"Alternative Currency Letter of Credit" means any Alternative Currency
Letter of Credit issued hereunder.
"Alternative Currency Letter of Credit Advance" means an advance made
by the Issuing Bank or any Revolving Credit Lender pursuant to Section 2.03(d).
"Alternative Currency Letter of Credit Agreement" has the meaning
specified in Section 2.04(d).
"Alternative Currency Letter of Credit Commitment" means, with respect
to the Issuing Bank, the amount set forth opposite the Issuing Bank's name on
Schedule I hereto under the caption "Alternative Currency Letter of Credit
Commitment" or, if the Issuing Bank has entered into one or more Assignments and
Acceptances, as set forth for the Issuing Bank in the Register maintained by the
Administrative Agent pursuant to Section 8.07(d) as the Issuing Bank's
"Alternative Currency Letter of Credit Commitment," as such amount may be
reduced at or prior to such time pursuant to the terms of this Agreement.
"Alternative Currency Letter of Credit Facility" means, at any time, an
amount equal to the amount of the Issuing Bank's Alternative Currency Letter of
Credit Commitment at such time, as such amount may be reduced at or prior to
such time pursuant to the terms of this Agreement.
"Alternative Currency Note" means an Alternative Currency Revolving
Credit Note.
"Alternative Currency Notice of Issuance" has the meaning specified in
Section 2.03(d).
"Alternative Currency Revolving Credit Advance" has the meaning
specified in Section 2.01(b).
"Alternative Currency Revolving Credit Borrowing" means a Borrowing
consisting of Alternative Currency Revolving Credit Advances.
"Alternative Currency Revolving Credit Sub-Commitment" means, with
respect to any Lender, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Amount of Alternative Currency Revolving
Credit Sub-Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 8.07(d) as such
Lender's "Alternative Currency Revolving Credit Sub-Commitment," as such amount
may be reduced at or prior to such time pursuant to the terms of this Agreement.
The Alternative Currency Revolving Credit Sub-Commitments of all the Alternative
Currency Revolving Credit Lenders equal $20,000,000 in the aggregate as of the
date hereof.
"Alternative Currency Revolving Credit Facility" has the meaning
specified in Section 2.01(b).
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<PAGE>
"Alternative Currency Revolving Credit Lenders" means those Lenders
providing Alternative Currency Revolving Credit Sub-Commitments hereunder and
shall include any Person which becomes a Alternative Currency Revolving Credit
Lender as contemplated by Section 8.07.
"Alternative Currency Revolving Credit Note" means a promissory note of
the Borrower payable to the order of any Alternative Currency Revolving Credit
Lender, in substantially the form of Exhibit C hereto, evidencing the aggregate
indebtedness of the Borrower to such Alternative Currency Revolving Credit
Lender resulting from the Alternative Currency Revolving Credit Advances made by
such Lender.
"Applicable Currency" means as to any particular payment or Advance,
U.S. Dollars or the Alternative Currency in which it is denominated or is
payable.
"Applicable Lending Office" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Prime Rate Advance
and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"Applicable Margin" means at any time and from time to time a
percentage per annum determined by reference to the ratio of Funded Debt to
EBITDA for the four full fiscal quarters preceding such determination, as set
forth below:
APPLICABLE APPLICABLE APPLICABLE
MARGIN FOR MARGIN FOR MARGIN FOR
PRIME RATE EURODOLLAR RATE COMMITMENT
RATIO OF FUNDED DEBT/EBITDA ADVANCES ADVANCES FEE
- ----------------------------- ---------- --------------- ----------
Equal to or greater than 4.25 0.0% 1.250% 0.275%
Equal to or greater than 3.75 0.0% 1.125% 0.250%
less than 4.25
Equal to or greater than 3.50 0.0% .875% 0.250%
less than 3.75
Equal to or greater than 3.00 0.0% .750% 0.225%
less than 3.50
Equal to or greater than 2.50 0.0% .625% 0.200%
less than 3.00
Equal to or greater than 2.00 0.0% .450% 0.150%
less than 2.50
Less than 2.00 0.0% .375% 0.125%
4
<PAGE>
Notwithstanding the above schedule, prior to the delivery to the Administrative
Agent of the Borrower's Financial Statements for its Fiscal Year ending March
31, 1998, the Applicable Margin for a Revolving Credit Advance shall be 0.0% for
a Prime Rate Advance and 1.250% for a Eurodollar Advance and for the commitment
fee payable under Section 2.08(a) shall be 0.275%.
All Alternative Currency Revolving Credit Advances will be Eurodollar Rate
Advances, with a margin equal to that of a Revolving Credit Advance. All Swing
Line Advances will be Prime Rate Advances, with a margin equal to that of a
Revolving Credit Advance.
The Applicable Margin shall be determined by reference to the Ratio of Funded
Debt to EBITDA which shall be determined three Business Days after the date on
which the Administrative Agent receives financial statements pursuant to Section
5.03(b) or (c) and a certificate of the chief financial officer of the Borrower
demonstrating the Ratio of Funded Debt to EBITDA. If the Borrower has not
submitted to the Administrative Agent the information described above as and
when required under Section 5.03(b) or (c), as the case may be, the Applicable
Margin shall be as determined by the Administrative Agent for so long as such
information has not been received by the Administrative Agent.
"Assigned Dollar Value" means (a) in respect of any Borrowing
denominated in U.S. Dollars, the amount thereof, (b) in respect of the undrawn
amount of any Alternative Currency Letter of Credit, the Dollar Equivalent
thereof determined based upon the applicable Exchange Rate as of (i) the date of
issuance of such Letter of Credit and (ii) thereafter, (A) the last Business Day
of a month, with respect to Alternative Currency Letters of Credit the stated
amount of which is denominated in Pounds Sterling or Deutsche Marks, or (B) the
last Business Day of March, June, September or December, with respect to
Alternative Currency Letters of Credit the stated amount of which is denominated
in Danish Crowns, (c) in respect of Alternative Currency Letter of Credit
reimbursement obligations, the Dollar Equivalent thereof determined based upon
the applicable Exchange Rate as of the date such reimbursement obligation was
incurred and (d) in respect of a Borrowing denominated in an Alternative
Currency, the Dollar Equivalent thereof based upon the applicable Exchange Rate
as of the Exchange Rate Determination Date for such Borrowing; provided,
however, if, as of the end of any Interest Period in respect of such Borrowing,
the Dollar Equivalent thereof determined based upon the applicable Exchange Rate
as of the date that is five (5) Business Days before the end of such Interest
Period would be at least 5% more, or 5% less, than the "Assigned Dollar Value"
thereof, then on and after the end of such Interest Period the "Assigned Dollar
Value" of such Borrowing shall be adjusted to be the Dollar Equivalent thereof
determined based upon the Exchange Rate that gave rise to such adjustment
(subject to further adjustment in accordance with this proviso thereafter). The
Assigned Dollar Value of an Alternative Currency Revolving Credit Advance
included in any Borrowing shall equal the pro rata portion of the Assigned
Dollar Value of such Borrowing represented by such Advance.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 8.07 and in substantially the
form of Exhibit A hereto.
5
<PAGE>
"Automatically Converted Revolving Credit Advance" has the meaning
specified in Section 2.02(b).
"Available Amount" means, (i) with respect to any Letter of Credit
issued in U.S. Dollars, the stated or face amount of such Letter of Credit to
the extent available at the time for drawing (subject to presentment of all
requisite documents) and (ii) with respect to any Alternative Currency Letter of
Credit, the Assigned Dollar Value of the stated or face amount of such Letter of
Credit to the extent available at the time for drawing (subject to presentment
of all requisite documents), in either case as the same may be increased or
decreased from time to time in accordance with the terms of such Letter of
Credit or Alternative Currency Letter of Credit, as the case may be.
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Fleet National Bank at its office at 10 Fountain Plaza,
Buffalo, New York 14202, Account No. 7168306.
"Borrowing" means a Revolving Credit Borrowing, an Alternative Currency
Revolving Credit Borrowing or a Swing Line Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in Buffalo New York; provided, however, that (i)
when used in connection with Eurodollar Rate Advances which are not Alternative
Currency Revolving Credit Advances, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in the London interbank market,
and (ii) when used in connection with Alternative Currency Revolving Credit
Advances, the term "Business Day" shall also exclude any day (A) on which
dealings in deposits in the Alternative Currency are not carried out in the
London interbank market or (B) on which commercial banks and foreign exchange
markets are not open for business in any of London, New York City and the
principal financial center for such Alternative Currency.
"Capital Expenditures" means, for any Person for any period, the sum of
all expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or equipment on a Consolidated balance sheet of
such Person.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower or any of its Subsidiaries, free and clear of all Liens other than
Liens created under the Collateral Documents: (i) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States having a maturity of not
greater than 360 days from the date of issuance thereof, (ii) insured
certificates of deposit of or time deposits having a maturity of not greater
than 360 days from the date of issuance thereof with any commercial
6
<PAGE>
bank that is a Lender Party or a member of the Federal Reserve System, issues
(or the parent of which issues) commercial paper rated as described in clause
(iii), is organized under the laws of the United States or any State thereof and
has combined capital and surplus of at least $1 billion or (iii) commercial
paper having a maturity of not greater than 180 days from the date of issuance
thereof in an aggregate amount of no more than $2,500,000 per issuer outstanding
at any time, issued by any corporation organized under the laws of any State of
the United States and rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Group.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., as amended from time to
time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Closing Date" means the date on which all of the conditions precedent
set forth in Section 3.01 to the Initial Extension of Credit shall have been
satisfied or waived.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Collateral Documents" means the Security Agreement, the Intellectual
Property Security Agreement and any other agreement that creates or purports to
create a Lien in favor of the Administrative Agent for the benefit of the
Secured Parties, including, without limitation, the Collateral Documents
delivered pursuant to Section 3.01 and any and all Additional Collateral
Documents delivered pursuant to Section 5.01(m).
"Commitment" means a Revolving Credit Commitment, an Alternative
Currency Revolving Credit Sub-Commitment, a Letter of Credit Commitment or an
Alternative Currency Letter of Credit Commitment.
"Commitment Percentage" means, as to any Lender, the percentage of the
aggregate Commitments constituted by such Lender's Commitments.
"Confidential Information" means information that the Borrower
furnishes to the Administrative Agent or any Lender Party in a writing
designated as confidential, but does not include any such information that is or
becomes generally available to the public other than as a result of a breach by
the Administrative Agent or any Lender Party of its obligations hereunder or
that is or becomes available to the Administrative Agent or such Lender Party
from a source other than the Borrower that is not, to the best of the
Administrative Agent's or such Lender Party's knowledge, acting in violation of
a confidentiality agreement with the Borrower; provided, further, that any
information described in Section 5.01(d) hereof shall be deemed Confidential
Information without reference to whether it was provided by the Borrower to the
Administrative Agent or was independently generated by the Administrative Agent
pursuant to such Section.
7
<PAGE>
"Consolidated" refers to the consolidation of accounts, in accordance
with GAAP, of the Borrower and all of its Subsidiaries.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.09 or
2.10.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a company
conducting a business the same as or similar to that of such Person, after
deducting adequate reserves in each case in which a reserve is proper in
accordance with GAAP.
"Current Liabilities" of any Person means (i) all Debt of such Person,
except Funded Debt, that by its terms is payable on demand or matures within one
year after the date of determination (excluding any Debt renewable or
extendible, at the option of such Person, to a date more than one year from such
date or arising under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year from
such date), (ii) all amounts of Funded Debt of such Person required to be paid
or prepaid within one year after such date and (iii) all other items (including
taxes accrued as estimated) that in accordance with GAAP would be classified as
current liabilities of such Person.
"Danish Crowns" or "DKK" means the lawful currency of Denmark.
"Debt" of any Person means, without duplication, (i) all indebtedness
of such Person for borrowed money, (ii) all Obligations of such Person for the
deferred purchase price of property or services, (iii) all Obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments, (iv)
all Obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (v) all Obligations of such Person as lessee under Capitalized
Leases, (vi) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (vii) all Obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any capital stock of or other ownership or profit interest in such
Person or any other Person or any warrants, rights or options to acquire such
capital stock, (viii) all Obligations of such Person in respect of Hedge
Agreements, (ix) all Debt of others referred to in clauses (i) through (viii)
above or clause (x) below guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (w) to pay or purchase such Debt or to advance or supply
funds for the payment or purchase of such Debt, (x) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such Debt or to assure the
holder of such Debt against loss, (y) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (z) otherwise to assure a creditor against loss, and (x) all Debt referred to
in clauses (i) through (ix) above of another Person secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts,
contract rights or inventory) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Debt.
8
<PAGE>
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party to the
Borrower pursuant to Section 2.01 or 2.02 at or prior to such time which has not
been made by such Lender Party or by the Administrative Agent for the account of
such Lender Party pursuant to Section 2.02(f) as of such time. In the event that
a portion of a Defaulted Advance shall be deemed made pursuant to Section
2.15(a), the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.01 on the
same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at any time,
any amount required to be paid by such Lender Party to the Administrative Agent
or any other Lender Party hereunder or under any other Loan Document at or prior
to such time which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender Party to (i) the
Administrative Agent and/or the Alternative Currency Revolving Credit Lenders
pursuant to Section 2.02(b) to purchase a portion of Automatically Converted
Revolving Credit Advances made by an Alternative Currency Revolving Credit
Lender, (ii) the Swing Line Bank pursuant to Section 2.02(c) to purchase a
portion of a Swing Line Advance made by the Swing Line Bank, (iii) the Issuing
Bank pursuant to Section 2.03(c) to purchase a portion of a Letter of Credit
Advance made by the Issuing Bank, (iv) the Issuing Bank pursuant to Section
2.03(d) to purchase a portion of an Alternative Currency Letter of Credit
Advance made by the Issuing Bank, (v) the Administrative Agent pursuant to
Section 2.02(f) to reimburse the Administrative Agent for the amount of any
Advance made by the Administrative Agent for the account of such Lender Party,
(vi) any other Lender Party pursuant to Section 2.13 to purchase any
participation in Advances owing to such other Lender Party and (vii) the
Administrative Agent or the Issuing Bank pursuant to Section 7.05 to reimburse
the Administrative Agent or the Issuing Bank for such Lender Party's ratable
share of any amount required to be paid by the Lender Parties to the
Administrative Agent or the Issuing Bank as provided therein. In the event that
a portion of a Defaulted Amount shall be deemed paid pursuant to Section
2.15(b), the remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be paid hereunder or under any other
Loan Document on the same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (i) owes a Defaulted Advance or a Defaulted Amount or (ii) shall take any
action or be the subject of any action or proceeding of a type described in
Section 6.01(f).
"Deutsche Marks" or "DM" means the lawful currency of the Federal
Republic of Germany.
"Disposal" means the discharge, deposit, injection, dumping, spilling,
leaking or placing of any solid waste or hazardous waste, as those terms are
defined by any applicable federal, state, local or foreign law, into or on any
land or water so that such solid waste or hazardous waste or any constituents
thereof may enter the environment or be emitted into the air or discharged into
any waters, including ground waters.
9
<PAGE>
"Dollar Equivalent" means, on any date of determination, in relation to
an amount denominated in any Alternative Currency, the amount of U.S. Dollars
required to purchase the relevant stated amount of such Alternative Currency at
the Exchange Rate with respect to such Alternative Currency on such date.
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower
and the Administrative Agent.
"Domestic Significant Subsidiary" means any Domestic Subsidiary of the
Borrower which is also a Significant Subsidiary.
"Domestic Subsidiary" means any Subsidiary organized under the laws of
the United States of America or any State thereof.
"EBITDA" means, for any period, (A) the sum, determined on a
Consolidated basis, of (i) net income (or net loss), (ii) interest expense,
(iii) income tax expense, (iv) depreciation expense and (v) amortization
expense, in each case of the Borrower and its Subsidiaries determined in
accordance with GAAP for such period, plus (B) the pro forma effect on EBITDA
for such period of any acquisition made by the Borrower or one of its
Subsidiaries (such pro forma effect to be reasonably acceptable to the
Administrative Agent).
"Eligible Assignee" means with respect to any portion of any Facility
(other than the Letter of Credit Facility or Alternative Currency Letter of
Credit Facility), (A) a Lender; (B) an Affiliate of a Lender; and (C) subject to
the prior approval of the Administrative Agent and the Borrower, such approval
not to be unreasonably withheld or delayed, (i) a commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $500,000,000; (ii) a savings and loan association or savings
bank organized under the laws of the United States, or any State thereof, and
having total assets in excess of $500,000,000; (iii) a commercial bank organized
under the laws of any other country that is a member of the OECD or has
concluded special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow or of the Cayman Islands, or
a political subdivision of any such country, and having total assets in excess
of $500,000,000, so long as such bank is acting through a branch or agency
located in the United States; (iv) the central bank of any country that is a
member of the OECD; and (v) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership, trust or
other entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having total assets
in excess of $100,000,000; and, with respect to the Letter of Credit Facility or
Alternative Currency Letter of Credit Facility, a Person that is an Eligible
Assignee under subclause (i) or (iii) of clause (C) of this definition and is
approved by the Administrative Agent and the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that no Loan Party or
Affiliate of a Loan Party shall qualify as an Eligible Assignee under this
definition.
10
<PAGE>
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to public health and
safety or the environment, including, without limitation, (i) by any
governmental or regulatory authority or third party for enforcement, cleanup,
Removal, Response, Remedial or other actions or damages and (ii) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any international or transnational law,
federal, state, local or foreign statute, law, ordinance, rule, regulation,
code, order, writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidance relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, threatened
release, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under common
control with any Loan Party, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" means (i) (y) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (z) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (ii) the application for a minimum funding waiver with
respect to a Plan; (iii) the provision by the administrator of any Plan of a
notice of intent to terminate such Plan under ERISA Section 4041(c), pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iv) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (v) the withdrawal by any
Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (vi) the conditions for imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any Plan; (vii) the adoption of an
amendment to a Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (viii) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition described in Section 4042 of ERISA that constitutes grounds
for the termination of, or the appointment of a trustee to administer, such
Plan.
11
<PAGE>
"Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per annum
equal to the rate per annum obtained by dividing (i) the rate per annum at which
deposits in the Applicable Currency are offered to Fleet by prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to Fleet's
Eurodollar Rate Advance comprising part of such Borrowing to be outstanding
during such Interest Period (or, if Fleet shall not have such a Eurodollar Rate
Advance, $1,000,000 or, if such Borrowing is made in an Alternative Currency,
the amount of such Alternative Currency for which the Dollar Equivalent is
$1,000,000) and for a period equal to such Interest Period by (ii) a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest
Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii) and shall include any Alternative Currency
Revolving Credit Advance.
"Eurodollar Rate Reserve Percentage" means, for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Rate" shall mean, on any day, (a) with respect to any
Alternative Currency, the spot rate at which U.S. Dollars are offered on such
day by the Administrative Agent in London for such Alternative Currency at
approximately 11:00 A.M. (London time), and (b) with respect to U.S. Dollars in
relation to any specified Alternative Currency, the spot rate at which such
specified Alternative Currency is offered on such day by the Administrative
Agent in London for U.S. Dollars at approximately 11:00 A.M. (London time). For
purposes of determining the Exchange Rate in connection with an Alternative
Currency Revolving Credit Borrowing, such Exchange Rate shall be determined as
of the Exchange Rate Determination Date for such Borrowing. The Administrative
Agent shall provide Borrower with the then current Exchange Rate from time to
time upon Borrower's request therefor.
12
<PAGE>
"Exchange Rate Determination Date" means, for purposes of the
determination of the Exchange Rate of any stated amount on any Business Day in
relation to any Alternative Currency Revolving Credit Borrowing, the date which
is three Business Days prior to such Borrowing.
"Existing Credit Agreement" means that certain Credit Agreement,
originally dated as of October 16, 1996, as heretofore amended, by and among the
Borrower, the lenders party thereto, and Fleet, as Initial Issuing Bank, Swing
Line Bank and Administrative Agent.
"Existing Credit Facility" means the credit facilities provided under
the Existing Credit Agreement.
"Existing Debt" means Debt of the Borrower and its Subsidiaries and
LICO and its Subsidiaries outstanding immediately before giving effect to the
Acquisition, including, without limitation, Debt under the Existing Credit
Facility.
"Existing Letters of Credit" means those certain existing Letters of
Credit issued by Fleet for the account of the Borrower which are set forth on
Schedule II hereto.
"Existing Marine Midland Letters of Credit" means those certain
existing letters of credit issued by Marine Midland in an aggregate face amount
of not more than $5,000,000 issued as security for the Borrower's obligations
under (A) that certain Series Guaranty Agreement, dated November 1, 1993, by and
between the Borrower, as guarantor, and Fleet Trust Company, as trustee,
relating to that certain Master Indenture, dated as of November 1, 1993, by and
between Town of Amherst Industrial Development Agency, as the issuer, and Fleet
Trust Company, as trustee, as supplemented by that certain Series Supplemental
Indenture, dated November 1, 1993, and (B) that certain Series Guaranty
Agreement, dated November 1, 1993, by and between the Borrower, as guarantor,
and Fleet Trust Company, as trustee, relating to that certain Master Indenture,
dated November 1, 1993, by and between the City of Cedar Rapids, Iowa, as the
issuer, and Fleet Trust Company, as trustee, as supplemented by that certain
Series Supplemental Indenture, dated November 1, 1993, in each instance as such
letters of credit may be renewed, but not increased in amount, by Marine Midland
from time to time.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, including,
without limitation, tax refunds, pension plan reversions, proceeds of insurance
(other than proceeds of business interruption insurance to the extent such
proceeds constitute compensation for lost earnings), condemnation awards (and
payments in lieu thereof) and indemnity payments; provided, however, that an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments to the extent that such proceeds, awards or payments (i) in respect of
loss or damage to equipment, fixed assets or real property, are applied (or in
respect of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds,
awards or payments were received in accordance with the terms of the Loan
Documents, so long as (A) such application is made within ninety (90) days after
such Person's receipt of such proceeds, awards or payments and (B) such
proceeds, awards or payments are received by such Person within fifteen (15)
months after the occurrence of such damage or loss; or (ii) are received by any
Person in respect
13
<PAGE>
of any third party claim against such Person and applied to pay (or to reimburse
such Person for its prior payment of) such claim and the costs and expenses of
such Person with respect thereto.
"Facilities" means the Revolving Credit Facility, the Alternative
Currency Revolving Credit Facility, the Letter of Credit Facility, the
Alternative Currency Letter of Credit Facility or the Swing Line Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Year" means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on March 31 in any calendar year.
"Fleet" means Fleet National Bank in its capacity as a Lender or issuer
of Letters of Credit or Alternative Currency Letters of Credit hereunder.
"Foreign Subsidiary" means any Subsidiary organized under the laws of
any jurisdiction other than the United States of America or any State thereof.
"Foreign Significant Subsidiary" means any Foreign Subsidiary of the
Borrower which is also a Significant Subsidiary.
"Funded Debt" means, with respect to the Borrower, the Advances, and
with respect to the Borrower and any other Person, all other Debt of such Person
that by its terms matures more than one year after the date of determination or
matures within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year after such date or arises
under a revolving credit or similar agreement that obligates the lender or
lenders to extend credit during a period of more than one year after such date,
including the current portion of all such Debt.
"GAAP" has the meaning specified in Section 1.03.
"Guaranteed Obligations" has the meaning specified in the Guaranty.
"Guarantors" means (i) each Domestic Significant Subsidiary of the
Borrower, (ii) upon consummation of the Acquisition, LICO and each Domestic
Significant Subsidiary of LICO and (iii) each other Person which shall have
executed and delivered or become a party to a Guaranty hereunder.
"Guaranty" has the meaning specified in Section 3.01.
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"Hazardous Materials" means (i) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (ii) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Hedge Bank" means the Administrative Agent or any other Lender Party
in its capacity as a party to a Hedge Agreement entered into pursuant to, and in
compliance with, the terms and conditions of Section 5.02(b)(v).
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Initial Extension of Credit" means the earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit or Alternative Currency
Letter of Credit.
"Initial Issuing Bank" means Fleet.
"Initial Lenders" has the meaning specified in the recital of parties
to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Intellectual Property Security Agreement" has the meaning specified in
Section 3.01.
"Interest Expense" means, with respect to any Person for any period,
interest expense on all Debt of such Person for such period, whether paid or
accrued, determined on a Consolidated basis for such Person and its Subsidiaries
and in accordance with GAAP, and including, without limitation, (i) in the case
of the Borrower, interest expense in respect of Debt resulting from Advances,
(ii) the interest component of all obligations under Capitalized Leases, (iii)
commissions, discounts and other fees and charges payable in connection with
letters of credit (including, without limitation, Letters of Credit and
Alternative Currency Letters of Credit), (iv) the net payment, if any, payable
in connection with Hedge Agreements less the net credit, if any, received in
connection with Hedge Agreements and (v) all fees paid by the Borrower pursuant
to Section 2.08(a).
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Prime Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the
Administrative Agent not later than
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11:00 A.M. (Buffalo, New York time) on the third (3rd) Business Day prior to the
first day of such Interest Period, select; provided, however, that:
(a) The Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends after
any principal repayment installment date for such Facility unless,
after giving effect to such selection, the aggregate principal amount
of Prime Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment installment
date for such Facility shall be at least equal to the aggregate
principal amount of Advances under such Facility due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing shall be
of the same duration;
(c) Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day; and
(d) Whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Inventory" of any Person means all of such Person's now owned and
hereafter acquired inventory, goods, merchandise, and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other materials and supplies of any
kind, nature or description which are or might be consumed in such Person's
business or used in connection with the packing, shipping, advertising, selling
or finishing of such goods, merchandise and such other personal property, and
all documents of title or other documents representing them.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership or
profit interest, warrants, rights, options, obligations or other securities of
such Person, any capital contribution to such Person or any other investment in
such Person, including, without limitation, any arrangement pursuant to which
the investor incurs Debt of the types referred to in clause (ix) or (x) of the
definition of "Debt" in respect of such Person.
"Issuing Bank" means the Initial Issuing Bank and each Eligible
Assignee to which the Letter of Credit Commitment and Alternative Currency
Letter of Credit Commitment hereunder
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has been assigned pursuant to Section 8.07; provided, however, that, with
respect to the Existing Letters of Credit, the term "Issuing Bank" means Fleet
as issuer of the Existing Letters of Credit.
"L/C Cash Collateral Account" has the meaning specified in the Security
Agreement.
"L/C Related Documents" has the meaning specified in Section
2.04(d)(ii)(A).
"Lender Party" means any Lender, the Issuing Bank or the Swing Line
Bank.
"Lenders" means the Initial Lenders, including, without limitation, the
initial Alternative Currency Revolving Credit Lenders, and each Person that
shall become a Lender hereunder pursuant to Section 8.07.
"Letter of Credit" means any Letter of Credit issued hereunder or any
Existing Letter of Credit, but does not mean or include any Alternative Currency
Letter of Credit.
"Letter of Credit Advance" means an advance made by the Issuing Bank or
any Revolving Credit Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank,
the amount set forth opposite the Issuing Bank's name on Schedule I hereto under
the caption "Letter of Credit Commitment" or, if the Issuing Bank has entered
into one or more Assignments and Acceptances, set forth for the Issuing Bank in
the Register maintained by the Administrative Agent pursuant to Section 8.07(d)
as the Issuing Bank's "Letter of Credit Commitment," as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced at or prior to such time pursuant to Section 2.05 less the
aggregate Available Amount under all Existing Letters of Credit outstanding at
such time.
"LICO Stock Purchase Agreement" means the stock purchase agreement,
dated as of March 11, 1998, by and among the Borrower and the shareholders of
LICO, pursuant to which the Acquisition will be consummated.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan Documents" means (i) this Agreement, (ii) the Notes, (iii) the
Guaranty, (iv) the Collateral Documents, (v) each Letter of Credit Agreement,
(vi) each Alternative Currency Letter of Credit Agreement, (vii) the Existing
Letters of Credit, (viii) each Hedge Agreement entered into by a Lender Party
pursuant to, and in compliance with the terms and conditions of, Section
5.02(b)(v), (ix) each document or agreement delivered pursuant to Section
5.01(m), and all other
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agreements, instruments and documents executed in connection herewith or
therewith, in each case as the same may at any time be amended, supplemented,
restated or otherwise modified and in effect.
"Loan Parties" means the Borrower and the Guarantors.
"Margin Stock" has the meaning specified in Regulation U.
"Marine Midland" means Marine Midland Bank.
"Material Adverse Change" means any material adverse change in (i) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party and its Subsidiaries (taken as a
whole), (ii) the ability of the Borrower or any Guarantor to perform its
obligations under the Loan Documents or (iii) any material aspect of any of the
Transactions.
"Material Adverse Effect" has the meaning specified in Section 3.01(e).
"Material Contract" means, with respect to any Person, each contract
listed on Schedule 4.01(dd), each contract which is a replacement or a
substitute for any contract listed on Schedule 4.01(dd) and each other contract
to which such Person is a party which is material to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
such Person.
"Mechanical Products" means Mechanical Products, Inc., a Delaware
corporation.
"Minitec" means Minitec Corporation, a Delaware corporation.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (ii) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset, or any Extraordinary Receipt received by or paid
to or for the account of any Person, the aggregate amount of cash received from
time to time (whether as initial consideration or through payment or disposition
of deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (i)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions, (ii) the
amount of taxes payable in connection with or as a result of such transaction
and (iii) the amount of any Debt (not including
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any Debt incurred under this Agreement) secured by a Lien on such asset that, by
the terms of such transaction, is required to be repaid upon such disposition,
in each case to the extent, but only to the extent, that the amounts so deducted
are, at the time of receipt of such cash, actually paid to a Person that is not
an Affiliate of such Person or any Loan Party or any Affiliate of any Loan Party
and are properly attributable to such transaction or to the asset that is the
subject thereof.
"Note" means a Revolving Credit Note or an Alternative Currency Note.
"Notice of Alternative Currency Borrowing" has the meaning specified in
Section 2.02(b).
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"Notice of Renewal" has the meaning specified in Section 2.01(d).
"Notice of Swing Line Borrowing" has the meaning specified in Section
2.02(c).
"Notice of Termination" has the meaning specified in Section 2.01(d).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (i) the
obligation to pay principal, interest, Letter of Credit and Alternative Currency
Letter of Credit commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party under any
Loan Document, (ii) all liabilities and other obligations arising out of, based
upon or relating to the Existing Letters of Credit, and (iii) the obligation of
any Loan Party to reimburse any amount in respect of any of the foregoing that
any Lender Party, in its sole discretion, may elect to pay or advance on behalf
of such Loan Party.
"OECD" means the Organization for Economic Cooperation and Development.
"Open Year" has the meaning specified in Section 4.01(t).
"Other Taxes" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
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"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (i) Liens for taxes, assessments and governmental charges or
levies not yet due and payable; (ii) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than 30 days; and (iii) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity or any division
thereof, or a government or any political subdivision, agency or instrumentality
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pounds Sterling" or "(pound)" means the lawful currency of the United
Kingdom.
"Pre-Commitment Information" has the meaning specified in Section
3.01(g).
"Preferred Stock" means, with respect to any corporation, capital stock
issued by such corporation that is entitled to a preference or priority over any
other capital stock issued by such corporation upon any distribution of such
corporation's assets, whether by dividend or upon liquidation.
"Prime Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Fleet in
Boston, Massachusetts, from time to time, as Fleet's prime rate, which
is not necessarily the lowest rate made available by Fleet; or
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Prime Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"Pro Rata Share" of any amount means, with respect to any Revolving
Credit Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Revolving Credit Commitment at
such time and the denominator of which is the Revolving Credit Facility at such
time and, with respect to any Alternative Currency Revolving Credit Lender (in
its capacity as such) at any time, the product of such amount times a fraction
the numerator of which is the amount of such Alternative Currency Revolving
Credit Lender's Alternative Currency Revolving Credit Sub-Commitment at such
time and the denominator of which is the Alternative Currency Revolving Credit
Facility at such time.
"Receivables" of any Person means all of such Person's right, title and
interest, whether now owned or hereafter acquired, in and to all accounts,
contract rights, chattel paper,
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instruments, deposit accounts, general intangibles and other obligations of any
kind, now or hereafter existing, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services, and all rights now
or hereafter existing in and to all security agreements, leases and other
contracts securing or otherwise relating to any such accounts, contract rights,
chattel paper, instruments, deposit accounts, general intangibles or
obligations.
"Reduction Amount" has the meaning specified in Section 2.06(b)(iv).
"Register" has the meaning specified in Section 8.07(d).
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Release" means any release, spill, emission, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Materials) or into or from any property, including, without limitation, the
movement of any Hazardous Materials through the air, soil, surface waters or
ground water.
"Remedial" shall have the meaning as set forth in CERCLA at 42 U.S.C.
ss. 9601(24) and/or any other applicable Environmental Laws.
"Removal" shall have the meaning as set forth in CERCLA at 42 U.S.C.
ss. 9601(23) and/or any other applicable Environmental Laws.
"Required Alternative Currency Lenders" means at any time Alternative
Currency Revolving Credit Lenders owed or holding greater than 50% of the
aggregate principal amount of the Alternative Currency Revolving Credit Advances
outstanding at such time or, if no such principal amount is outstanding at such
time, Alternative Currency Revolving Credit Lenders holding greater than 50% of
the aggregate of the Alternative Currency Revolving Credit Sub-Commitments;
provided, however, that if any Alternative Currency Revolving Credit Lender
shall be a Defaulting Lender at such time, there shall be excluded from the
determination of Required Alternative Currency Lenders at such time (i) the
aggregate principal amount of the Alternative Currency Revolving Credit Advances
owing to such Lender and outstanding at such time, and (ii) the aggregate
Alternative Currency Revolving Credit Sub-Commitment of such Lender at such
time.
"Required Lenders" means at any time Lenders owed or holding greater
than 50% of the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and (ii) the aggregate Available Amount of all Letters
of Credit and all Alternative Currency Letters of Credit outstanding at such
time, or, if no such principal amount and no Letters of Credit and no
Alternative Currency Letters of Credit are outstanding at such time, Lenders
holding greater than 50% of the aggregate of the Revolving Credit Commitments;
provided, however, that if any Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination
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of Required Lenders at such time (i) the aggregate principal amount of the
Advances owing to such Lender (in its capacity as a Lender) and outstanding at
such time, and (ii) the aggregate Revolving Credit Commitment of such Lender at
such time. For purposes of this definition, the aggregate principal amount of
Swing Line Advances owing to the Swing Line Bank, Letter of Credit Advances and
Alternative Currency Letter of Credit Advances owing to the Issuing Bank and the
Available Amount of each Letter of Credit and each Alternative Currency Letter
of Credit shall be considered to be owed to the Revolving Credit Lenders ratably
in accordance with their respective Revolving Credit Commitments.
"Response" shall have the meaning as set forth in CERCLA at 42 U.S.C.
ss. 9601(25) and/or any other applicable Environmental Laws.
"Responsible Officer" means, in the case of the Borrower, any officer
and, in the case of any other Loan Party, the Chairman, Treasurer or Assistant
Treasurer of such Loan Party.
"Revolving Credit Advance" has the meaning specified in Section 2.01(a)
and shall include an Automatically Converted Revolving Credit Advance.
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Revolving
Credit Lenders.
"Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Revolving Credit Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set forth for
such Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(d) as such Lender's "Revolving Credit Commitment," as such amount
may be reduced at or prior to such time pursuant to Section 2.05.
"Revolving Credit Facility" means, at any time, the aggregate amount of
the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means any Lender that has a Revolving Credit
Commitment.
"Revolving Credit Note" means a promissory note of the Borrower payable
to the order of any Revolving Credit Lender, in substantially the form of
Exhibit B hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Revolving Credit Advances made by such Lender.
"Revolving Credit Termination Date" means the earlier of the fifth
anniversary of the Closing Date and the Termination Date.
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means the Administrative Agent, the Lender Parties
and the Hedge Banks and the other Persons the Obligations owing to which are or
are purported to be secured by the Collateral under the terms of the Collateral
Documents.
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"Security Agreement" has the meaning specified in Section 3.01(a).
"Senior Subordinated Note Documents" means the Senior Subordinated Note
Indenture, Senior Subordinated Notes and all other documents, instruments and
agreements executed and delivered in connection with the original issuance of
the Senior Subordinated Notes, in each case, as the same shall, subject to the
terms and conditions of this Agreement, be amended, supplemented or otherwise
modified and in effect from time to time.
"Senior Subordinated Note Indenture" means the indenture, dated as of
March 31, 1998, between the Borrower, as issuer, and State Street Bank and Trust
Company, N.A., as trustee, as the same shall, subject to the terms and
conditions of this Agreement, be amended, supplemented or otherwise modified and
in effect from time to time.
"Senior Subordinated Notes" means the Borrower's 8 1/2% senior
subordinated notes due 2008 issued pursuant to the Senior Subordinated Note
Indenture, as the same shall, subject to the terms and conditions of this
Agreement, be amended, supplemented or otherwise modified and in effect from
time to time.
"Shares" means the shares of Common Stock, par value $.01 per share, of
LICO.
"Significant Subsidiary" means each Loan Party and any other Subsidiary
of the Borrower which (i) for the most recent Fiscal Year of the Borrower
accounted for more than 5% of the Consolidated revenues of the Borrower, or (ii)
as of the end of such Fiscal Year was the owner of more than 5% of the
Consolidated assets of the Borrower, all as shown on the Consolidated financial
statements of the Borrower for such fiscal year.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of any Loan
Party or any ERISA Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (ii) was so maintained and in respect of which any Loan
Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in
the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (i) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (ii) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (iv) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit or Alternative
Currency Letter of Credit other than a Trade Letter of Credit.
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"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (i) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (ii) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (iii) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"Surviving Debt" shall have the meaning specified in Section 3.01(c).
"Swing Line Advance" means an advance made by (x) the Swing Line Bank
pursuant to Section 2.01(c) or (y) any Revolving Credit Lender pursuant to
Section 2.02(c).
"Swing Line Bank" means Fleet.
"Swing Line Borrowing" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section 2.01(c).
"Taxes" has the meaning specified in Section 2.12(a).
"Termination Date" means the date of termination in whole of the
Commitments pursuant to Section 2.05 or 6.01.
"Trade Letter of Credit" means any Letter of Credit or Alternative
Currency Letter of Credit that is issued for the benefit of a supplier of
Inventory to the Borrower or any of its Subsidiaries to effect payment for such
Inventory, the conditions to drawing under which include the presentation to the
Issuing Bank of negotiable bills of lading, invoices and related documents
sufficient, in the judgment of the Issuing Bank, to create a valid and perfected
lien on or security interest in such Inventory, bills of lading, invoices and
related documents in favor of the Issuing Bank.
"Transactions" means the transactions contemplated by the Acquisition,
the Senior Subordinated Note Documents and the Loan Documents.
"Type" refers to the distinction between Advances bearing interest at
the Prime Rate and Advances bearing interest at the Eurodollar Rate.
"Univeyor" means Univeyor A/S, a corporation organized and existing
under the laws of Denmark and a direct or indirect wholly-owned Subsidiary of
the Borrower.
"Unused Alternative Currency Revolving Credit Sub-Commitment" means, as
to any Alternative Currency Revolving Credit Lender at any time, an amount in
U.S. Dollars equal to (i) such Lender's Alternative Currency Revolving Credit
Sub-Commitment minus (ii) the sum of
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(x) the aggregate Assigned Dollar Value of all Alternative Currency Revolving
Credit Advances made by such Lender (in its capacity as an Alternative Currency
Revolving Credit Lender) and outstanding at such time, plus (y) such Lender's
Pro Rata Share of (1) the aggregate Assigned Dollar Value of all Alternative
Currency Revolving Credit Advances made by the Alternative Currency Revolving
Credit Lenders (other than such Lender) and outstanding at such time, (2) the
aggregate Available Amount of all Alternative Currency Letters of Credit
outstanding at such time and (3) the aggregate Assigned Dollar Value of all
Alternative Currency Letter of Credit Advances made by the Issuing Bank pursuant
to Section 2.03(d) and outstanding at such time.
"Unused Revolving Credit Commitment" means, with respect to any Lender
at any time, (i) such Lender's Revolving Credit Commitment at such time minus
(ii) the sum of (x) the aggregate principal amount of all Revolving Credit
Advances, all Swing Line Advances, all Letter of Credit Advances, the Assigned
Dollar Value of all Alternative Currency Letter of Credit Advances and the
Assigned Dollar Value of all Alternative Currency Revolving Credit Advances, in
each instance made by such Lender (in its capacity as a Lender) and outstanding
at such time, plus (y) such Lender's Pro Rata Share of (1) the aggregate
Assigned Dollar Value of all Alternative Currency Revolving Credit Advances made
by the Alternative Currency Revolving Credit Lenders (other than such Lender)
and outstanding at such time, (2) the aggregate Available Amount of all Letters
of Credit, including, without limitation, Existing Letters of Credit,
outstanding at such time, (3) the aggregate Available Amount of all Alternative
Currency Letters of Credit outstanding at such time, (4) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Bank pursuant to
Section 2.03(c) and outstanding at such time, (5) the aggregate Assigned Dollar
Value of all Alternative Currency Letter of Credit Advances made by the Issuing
Bank pursuant to Section 2.03(d) and outstanding at such time, and (6) the
aggregate principal amount of all Swing Line Advances made by the Swing Line
Bank pursuant to Section 2.01(c) and outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of which
any Loan Party could have liability.
"Withdrawal Liabilities" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"Yale Germany" means Yale Industrial Products GmbH, a corporation
organized and existing under the laws of Germany and a direct or indirect
wholly-owned Subsidiary of the Borrower.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
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SECTION 1.03. Accounting Terms. All accounting terms used in any of the
financial covenants set forth in Section 5.04, and all other accounting terms
not specifically defined herein, shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f)(ii) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES,
THE LETTERS OF CREDIT AND ALTERNATIVE
CURRENCY LETTERS OF CREDIT
SECTION 2.01. The Advances.
(a) The Revolving Credit Advances. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Revolving Credit Advance") to the Borrower from time to time
on any Business Day during the period from the date hereof until the Revolving
Credit Termination Date in an amount for each such Advance not to exceed such
Lender's Unused Revolving Credit Commitment at such time. Each Revolving Credit
Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof (other than a Borrowing the proceeds of which
shall be used solely to repay or prepay in full outstanding Swing Line Advances,
outstanding Letter of Credit Advances or outstanding Alternative Currency Letter
of Credit Advances) and shall consist of Revolving Credit Advances made
simultaneously by the Revolving Credit Lenders ratably according to their
Revolving Credit Commitments. Within the limits of each Revolving Credit
Lender's Unused Revolving Credit Commitment in effect from time to time, the
Borrower may borrow, repay and reborrow.
(b) The Alternative Currency Revolving Credit Advances. Each
Alternative Currency Revolving Credit Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances denominated in an Alternative
Currency ("Alternative Currency Revolving Credit Advances") to the Borrower from
time to time on any Business Day during the period from the date hereof until
the Revolving Credit Termination Date in an amount for each such Advance not to
exceed the Assigned Dollar Value of such Lender's Unused Alternative Currency
Revolving Credit Sub-Commitment at such time; provided, however, that the
aggregate amount of all Alternative Currency Revolving Credit Advances at any
time outstanding shall not at any time exceed the Assigned Dollar Value of
$20,000,000 (the "Alternative Currency Revolving Credit Facility"), and,
provided, further, that the aggregate amount of an Alternative Currency
Revolving Credit Borrowing shall in no event exceed the aggregate of the Unused
Revolving Credit Commitments of the Revolving Credit Lenders at such time. Each
Alternative Currency Revolving Credit Borrowing (other than, in the case of a
continuation of a Eurodollar Rate Advance, a change in the Assigned Dollar Value
thereof solely as a result of currency fluctuations) shall be in an aggregate
amount of the Applicable Currency which would purchase approximately two million
dollars ($2,000,000) or an integral multiple of one million dollars ($1,000,000)
in excess thereof based on the exchange rate as published in the Wall Street
Journal (or if such rate is not available, the spot rate quoted by the
Administrative Agent on such date)
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with respect to such currency on the date of the applicable Notice of
Alternative Currency Borrowing or, if less, the then Dollar Equivalent amount of
the aggregate Unused Alternative Currency Revolving Credit Sub-Commitments. Each
Alternative Currency Revolving Credit Borrowing shall consist of Alternative
Currency Revolving Credit Advances made simultaneously by the Alternative
Currency Revolving Credit Lenders ratably according to their Alternative
Currency Revolving Credit Sub-Commitments. Within the limits of each Alternative
Currency Revolving Credit Lender's Unused Alternative Currency Revolving Credit
Sub-Commitment in effect from time to time, the Borrower may borrow, repay and
reborrow.
(c) The Swing Line Advances. The Borrower may request the Swing Line
Bank to make, and the Swing Line Bank may, if in its discretion it elects to do
so, make, on the terms and conditions hereinafter set forth, Swing Line Advances
to the Borrower from time to time on any Business Day during the period from the
date hereof until the Revolving Credit Termination Date (i) in an aggregate
amount not to exceed at any time outstanding $15,000,000 (the "Swing Line
Facility") and (ii) in an amount for each such Swing Line Borrowing not to
exceed the aggregate of the Unused Revolving Credit Commitments of the Revolving
Credit Lenders at such time. No Swing Line Advance shall be used for the purpose
of funding the payment of principal of any other Swing Line Advance. Each Swing
Line Borrowing shall be made as a Prime Rate Advance. Within the limits of the
Swing Line Facility and within the limits referred to in clause (ii) above, so
long as the Swing Line Bank, in its discretion, elects to make Swing Line
Advances, the Borrower may borrow and reborrow under this Section 2.01(c) and
may repay or prepay the Swing Line Advances at such times prior to the Revolving
Credit Termination Date, and in such integral multiples, as the Borrower may
elect.
(d) Letters of Credit. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue Letters of Credit for the account of
the Borrower from time to time on any Business Day during the period from the
Closing Date until sixty (60) days before the Revolving Credit Termination Date
(A) in an aggregate Available Amount for all Letters of Credit, including,
without limitation, Existing Letters of Credit, not to exceed at any time the
Issuing Bank's Letter of Credit Commitment at such time and (B) in an Available
Amount for each such Letter of Credit not to exceed an amount equal to the
Unused Revolving Credit Commitments of the Revolving Credit Lenders at such
time. No Letter of Credit shall have an expiration date (including all rights of
the Borrower or the beneficiary to require renewal) later than the earliest of
(A) 60 days before the Revolving Credit Termination Date, (B) in the case of a
Standby Letter of Credit, 365 days after the date of issuance thereof and (C) in
the case of a Trade Letter of Credit, 180 days after the date of issuance
thereof. The foregoing notwithstanding, any Standby Letter of Credit may, by its
terms, be renewable annually upon notice (a "Notice of Renewal") given to the
Issuing Bank and the Administrative Agent on or prior to any date for notice of
renewal set forth in such Letter of Credit (but in any event at least five (5)
Business Days prior to the date of the proposed renewal of such Standby Letter
of Credit) and upon fulfillment of the applicable conditions set forth in
Article III unless such Issuing Bank shall have notified the Borrower (with a
copy to the Administrative Agent) on or prior to the date for notice of
termination set forth in such Letter of Credit (but in any event at least thirty
(30) Business Days prior to the date of automatic renewal) of its election not
to renew such Standby Letter of Credit (a "Notice of Termination"); provided
that the terms of each Standby Letter of Credit that is automatically renewable
annually shall not permit the expiration date (after giving effect to any
renewal) of such Standby Letter of Credit in any event to be extended to a date
later
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than sixty (60) days before the Revolving Credit Termination Date. If either a
Notice of Renewal is not given by the Borrower or a Notice of Termination is
given by the Issuing Bank pursuant to the immediately preceding sentence, such
Standby Letter of Credit shall expire on the date on which it otherwise would
have been automatically renewed; provided, however, that even in the absence of
receipt of a Notice of Renewal, the Issuing Bank may, in its discretion unless
instructed to the contrary by the Administrative Agent or the Borrower, deem
that a Notice of Renewal had been timely delivered and, in such case, a Notice
of Renewal shall be deemed to have been so delivered for all purposes under this
Agreement. Within the limits of the Letter of Credit Facility, and subject to
the limits referred to above, the Borrower may request the issuance of Letters
of Credit under this Section 2.01(d), repay any Letter of Credit Advances
resulting from drawings under Letters of Credit pursuant to Section 2.03(c) and
request the issuance of additional Letters of Credit under this Section 2.01(d).
(e) Alternative Currency Letters of Credit. The Issuing Bank agrees, on
the terms and subject to the conditions set forth in this Agreement, to issue
Alternative Currency Letters of Credit for the account of the Borrower from time
to time on any Business Day during the period from the Closing Date until sixty
(60) days before the Revolving Credit Termination Date (A) in an aggregate
Available Amount for all Alternative Currency Letters of Credit not to exceed at
any time the Issuing Bank's Alternative Currency Letter of Credit Commitment at
such time and (B) in an Available Amount for each such Alternative Currency
Letter of Credit (i) not to exceed an amount equal to the Unused Alternative
Currency Revolving Credit Sub-Commitments of the Alternative Currency Revolving
Credit Lenders at such time and (ii) not to exceed an amount equal to the Unused
Revolving Credit Commitments of the Revolving Credit Lenders at such time. No
Alternative Currency Letter of Credit shall have an expiration date (including
all rights of the Borrower or the beneficiary to require renewal) later than the
earliest of (A) 60 days before the Revolving Credit Termination Date, (B) in the
case of a Standby Letter of Credit, 365 days after the date of issuance thereof
and (C) in the case of a Trade Letter of Credit, 180 days after the date of
issuance thereof. Within the limits of the Alternative Currency Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may request
the issuance of Alternative Currency Letters of Credit under this Section
2.01(e), repay any Alternative Currency Letter of Credit Advances resulting from
drawings under Alternative Currency Letters of Credit pursuant to Section
2.03(d) and request the issuance of additional Alternative Currency Letters of
Credit under this Section 2.01(e).
SECTION 2.02. Making the Advances. (a) Each Revolving Credit Borrowing
shall be made on notice, given not later than 11:00 A.M. (Buffalo, New York
time) on the third Business Day prior to the date of the proposed Borrowing in
the case of a Borrowing consisting of Eurodollar Rate Advances, or the second
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Prime Rate Advances, by the Borrower to the
Administrative Agent, which shall give to each appropriate Lender prompt notice
thereof by telex or telecopier. Each such notice of a Revolving Credit Borrowing
(a "Notice of Borrowing") may be by telephone, confirmed immediately in writing,
or telex or telecopier in substantially the form of Exhibit D hereto, specifying
therein the requested (i) date of such Borrowing, (ii) Type of Advances
comprising such Borrowing, (iii) aggregate amount of such Borrowing and (iv) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Advance. Each Lender shall, before 11:00 A.M. (Buffalo, New
York time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the
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Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing in accordance with the
respective Revolving Credit Commitments of such Lender and the other Lenders.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower by crediting the Borrower's
Account; provided, however, that the Administrative Agent shall first make a
portion of such funds equal to the aggregate principal amount of any Swing Line
Advances, Letter of Credit Advances and Alternative Currency Letter of Credit
Advances made by the Swing Line Bank, the Issuing Bank and any other Revolving
Credit Lender and outstanding on the date of such Borrowing, plus interest
accrued and unpaid thereon to and as of such date, available to the Swing Line
Bank, the Issuing Bank and such other Revolving Credit Lenders for repayment of
such Swing Line Advances, Letter of Credit Advances and Alternative Currency
Letter of Credit Advances.
(b) (i) Each Alternative Currency Revolving Credit Borrowing shall be
made on notice, given not later than 11:00 A.M. (Buffalo, New York time) on the
fifth Business Day prior to the date of the proposed Borrowing, by the Borrower
to the Administrative Agent, which shall give to each Alternative Currency
Revolving Credit Lender prompt notice thereof by telex or telecopier. Each such
notice of an Alternative Currency Revolving Credit Borrowing (a "Notice of
Alternative Currency Borrowing") may be by telephone, confirmed immediately in
writing, or telex or telecopier in substantially the form of Exhibit E hereto,
specifying therein the requested (i) date of such Alternative Currency Revolving
Credit Borrowing, (ii) Applicable Currency, (iii) aggregate amount of such
Alternative Currency Revolving Credit Borrowing and (iv) initial Interest Period
for each such Alternative Currency Revolving Credit Advance (it being understood
by the Borrower and Alternative Currency Revolving Credit Lenders that all
Alternative Currency Revolving Credit Advances shall be Eurodollar Rate
Advances). Each Alternative Currency Revolving Credit Lender shall, before 11:00
A.M. (local time at the place of payment) on the date of such Borrowing, make
available to the Administrative Agent at such account at such bank or office in
London or the principal financial center in the country of the Applicable
Currency as the Administrative Agent shall have designated by written notice to
such Lender, in same day funds, such Alternative Currency Revolving Credit
Lender's ratable portion of such Borrowing in accordance with the respective
Alternative Currency Revolving Credit Sub-Commitments of such Alternative
Currency Revolving Credit Lender and the other Alternative Currency Revolving
Credit Lenders. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower by wire
transfer to such account as the Borrower shall have previously designated to the
Administrative Agent in writing, which account must be in the name of the
Borrower or a Subsidiary of the Borrower and in London or the financial center
of the country of the Applicable Currency.
(ii) Upon the occurrence and during the continuance of any Default or
Event of Default or at any other time that the Administrative Agent may in its
reasonable discretion so determine, the Administrative Agent may, and, in the
case of the occurrence and continuance of a Default or Event or Default, shall
at the direction of the Required Alternative Currency Lenders, terminate the
Alternative Currency Revolving Credit Facility by giving notice of such
termination to the Borrower, each of the Alternative Currency Revolving Credit
Lenders and each of the other Revolving Credit Lenders. Thereupon, (A) any and
all then outstanding
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Alternative Currency Revolving Credit Advances shall automatically be converted
into Revolving Credit Advances denominated in U.S. Dollars (in an amount equal
to the Dollar Equivalent thereof) (the "Automatically Converted Revolving Credit
Advances"), (B) no further Alternative Currency Revolving Credit Advances shall
be permitted to be made and (C) the Alternative Currency Revolving Credit
Sub-Commitments of the Alternative Currency Revolving Credit Lenders shall be
automatically terminated. In addition, at such time the Revolving Credit Lenders
shall purchase from the Alternative Currency Revolving Credit Lenders, and the
Alternative Currency Revolving Credit Lenders shall sell and assign to the
Revolving Credit Lenders, Automatically Converted Revolving Credit Advances in
an amount so that each and every Revolving Credit Lender shall have a share of
the total Automatically Converted Revolving Credit Advances equal to its Pro
Rata Share of the aggregate Revolving Credit Commitments. The Administrative
Agent shall specify the amounts required to effect such purchases and sales
among the Revolving Credit Lenders. The Borrower hereby agrees to each such sale
and assignment. Each Revolving Credit Lender agrees to purchase its Pro Rata
Share of Automatically Converted Revolving Credit Advances on (i) the Business
Day on which demand therefor is made, provided that notice of such demand is
given not later than 11:00 A.M. (Buffalo, New York time) on such Business Day,
or (ii) the first Business Day next succeeding such demand if notice of such
demand is given after such time. Upon any such assignment by an Alternative
Currency Revolving Credit Lender to Revolving Credit Lenders of a portion of the
Automatically Converted Revolving Credit Advances, such Alternative Currency
Revolving Credit Lender represents and warrants to such other Lenders that such
Alternative Currency Revolving Credit Lender is the legal and beneficial owner
of the interest being assigned by it, but makes no other representation or
warranty and assumes no responsibility with respect to any of the Automatically
Converted Revolving Credit Advances, any of the Loan Documents, the Borrower or
any Loan Party (including, without limitation, as to the financial condition of
the Borrower or any Loan Party). The occurrence of any event which results in
the existence of Automatically Converted Revolving Credit Advances pursuant to
the foregoing shall be deemed to constitute, for all purposes of this Agreement,
a prepayment of all of the Alternative Currency Revolving Credit Advances so
automatically converted into Automatically Converted Revolving Credit Advances
before the last day of the Interest Period relating thereto.
(c) Each Swing Line Borrowing shall be made either (x) on notice, given
not later than 11:00 A.M. (Buffalo, New York time) on the date of the proposed
Swing Line Borrowing, by the Borrower to the Swing Line Bank and the
Administrative Agent or (y) pursuant to other arrangements, including, by way of
example and not of limitation, arrangements for daily repayments and borrowings
on each Business Day, which are satisfactory in form and substance to the Swing
Line Bank, the Administrative Agent and the Borrower. Each notice of a Swing
Line Borrowing pursuant to clause (x) in the immediately preceding sentence (a
"Notice of Swing Line Borrowing") shall be by telephone, confirmed immediately
in writing, or telex or telecopier, specifying therein the requested (i) date of
such Borrowing, (ii) amount of such Borrowing and (iii) maturity of such
Borrowing (which maturity shall be no later than the seventh day after the
requested date of such Borrowing). If, in its discretion, it elects to make a
requested Swing Line Advance, the Swing Line Bank will make the amount thereof
available to the Administrative Agent at the Administrative Agent's Account, in
same day funds. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower by crediting
the Borrower's Account. Upon written demand by the Swing Line Bank, with a copy
of such
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demand to the Administrative Agent, each other Revolving Credit Lender shall
purchase from the Swing Line Bank, and the Swing Line Bank shall sell and assign
to each such other Lender, such other Lender's Pro Rata Share of all outstanding
Swing Line Advances as of the date of such demand, by making available for the
account of its Applicable Lending Office to the Administrative Agent for the
account of the Swing Line Bank, by deposit to the Administrative Agent's
Account, in same day funds, an amount equal to the portion of the outstanding
principal amount of Swing Line Advances to be purchased by such Lender. The
Borrower hereby agrees to each such sale and assignment. Each Revolving Credit
Lender agrees to purchase its Pro Rata Share of outstanding Swing Line Advances
on (i) the Business Day on which demand therefor is made by the Swing Line Bank,
provided that notice of such demand is given not later than 11:00 A.M. (Buffalo,
New York time) on such Business Day, or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. Upon
any such assignment by the Swing Line Bank to any other Revolving Credit Lender
of a portion of a Swing Line Advance, the Swing Line Bank represents and
warrants to such other Lender that the Swing Line Bank is the legal and
beneficial owner of such interest being assigned by it, but makes no other
representation or warranty and assumes no responsibility with respect to such
Swing Line Advance, the Loan Documents or any Loan Party. If and to the extent
that any Revolving Credit Lender shall not have so made the amount of such Swing
Line Advance available to the Administrative Agent, such Lender agrees to pay to
the Administrative Agent, for the account of the Swing Line Bank, forthwith on
demand such amount together with interest thereon, for each day from the date of
demand by the Swing Line Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such amount for the account of the Swing Line Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Swing Line Advance made by such Lender on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Swing Line Advance made
by the Swing Line Bank shall be reduced by such amount on such Business Day.
(d) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances if the obligation of
the appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.09 or Section 2.10, and (ii) Revolving Credit Advances
made on any date may not be outstanding as part of more than ten (10) separate
Borrowings.
(e) Each Notice of Borrowing, Notice of Alternative Currency Borrowing
and Notice of Swing Line Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, and in the case of any
Alternative Currency Revolving Credit Borrowing, the Borrower shall indemnify
each appropriate Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing or Notice of Alternative Currency Borrowing, as the
case may be, for such Borrowing the applicable conditions set forth in Article
III, including, without limitation, any loss (including loss of anticipated
profits as reasonably determined by such Lender), cost or expense incurred by
reason of the liquidation or redeployment of deposits or other funds acquired by
such Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date.
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(f) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a), (b) or (c) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay or
pay to the Administrative Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such corresponding amount, such amount so
paid shall constitute such Lender's Advance as part of such Borrowing for all
purposes.
(g) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters
of Credit.
(a) Request for Issuance. Each Letter of Credit which is not an
Existing Letter of Credit shall be issued upon notice, given not later than
11:00 A.M. (Buffalo, New York time) on the fifth (5th) Business Day prior to the
date of the proposed issuance of such Letter of Credit, by the Borrower to the
Issuing Bank, which shall give to the Administrative Agent and each Revolving
Credit Lender prompt notice thereof by telex or telecopier. Each such notice of
issuance of a Letter of Credit (a "Notice of Issuance") shall be by telephone,
confirmed immedi-
ately in writing, or telex or telecopier, specifying therein the requested (i)
date of such issuance (which shall be a Business Day), (ii) Available Amount of
such Letter of Credit, (iii) expiration date of such Letter of Credit, (iv) name
and address of the beneficiary of such Letter of Credit and (v) form of such
Letter of Credit, and shall be accompanied by such application and agreement for
letter of credit as the Issuing Bank may specify to the Borrower for use in
connection with such requested Letter of Credit (a "Letter of Credit
Agreement"). If the requested form of such Letter of Credit is acceptable to the
Issuing Bank, in its sole discretion, the Issuing Bank will, upon fulfillment of
the applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower at its office referred to in Section 8.02 or as
otherwise agreed with the Borrower in connection with such issuance. In the
event and to the extent that the provisions of any such Letter of Credit
Agreement shall conflict with this Agreement, the provisions of this Agreement
shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (i) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such
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week under all Letters of Credit, including, without limitation, drawings under
Existing Letters of Credit, (ii) to the Administrative Agent, the Borrower and
each Revolving Credit Lender on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the preceding month and drawings during such month under all Letters of
Credit, including, without limitation, drawings under Existing Letters of
Credit, and (iii) to the Administrative Agent, the Borrower and each Revolving
Credit Lender on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit, including, without
limitation, all Existing Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit, including, without limitation, under any
Existing Letter of Credit, shall constitute for all purposes of this Agreement
the making by the Issuing Bank of a Letter of Credit Advance which shall be a
Prime Rate Advance, in the amount of such draft. Each of the Borrower, the
Administrative Agent and each Revolving Credit Lender hereby acknowledges and
agrees that Letter of Credit Advances may be made, or deemed made, by the
Issuing Bank in respect of Existing Letters of Credit or any other Letter of
Credit and to participate in all Letter of Credit Advances made hereunder as
provided herein. Upon written demand by the Issuing Bank, with a copy of such
demand to the Administrative Agent, each Revolving Credit Lender shall purchase
from the Issuing Bank, and the Issuing Bank shall sell and assign to each such
Revolving Credit Lender such Lender's Pro Rata Share of such outstanding Letter
of Credit Advance as of the date of such purchase, by making available (for the
account of its Applicable Lending Office) to the Administrative Agent (for the
account of the Issuing Bank), by deposit to the Administrative Agent's Account,
in same day funds, an amount equal to the portion of the outstanding principal
amount of such Letter of Credit Advance to be purchased by such Lender. Promptly
after receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. The Borrower hereby agrees to each such sale and assignment. Each
Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which demand therefor is
made by the Issuing Bank, provided notice of such demand is given not later than
11:00 A.M. (Buffalo, New York time) on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such demand is given after
such time. Upon any such assignment by the Issuing Bank to any other Revolving
Credit Lender of a portion of a Letter of Credit Advance, the Issuing Bank
represents and warrants to such other Lender that the Issuing Bank is the legal
and beneficial owner of such interest being assigned by it, free and clear of
any liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan
Documents, the Borrower or any other Loan Party. If and to the extent that any
Revolving Credit Lender shall not have so made the amount of such Letter of
Credit Advance available to the Administrative Agent, such Revolving Credit
Lender agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank until the date such amount is paid to the Administrative Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable. If such Lender shall pay to the Administrative Agent such amount for
the account of the Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Lender on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by the Issuing Bank shall
be reduced by such amount on such Business Day.
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(d) Alternative Currency Letters of Credit. (i) Each Alternative
Currency Letter of Credit may, in the sole discretion of the Issuing Bank, be
issued upon notice, given not later than 11:00 A.M. (Buffalo, New York time) on
the tenth (10th) Business Day prior to the date of the proposed issuance of such
Alternative Currency Letter of Credit, by the Borrower to the Issuing Bank,
which shall give to the Administrative Agent, each Alternative Currency
Revolving Credit Lender and each other Revolving Credit Lender prompt notice
thereof by telex or telecopier. Each such notice of issuance of an Alternative
Currency Letter of Credit (an "Alternative Currency Notice of Issuance") shall
be by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (i) date of issuance (which shall be a Business
Day), (ii) Available Amount of such Alternative Currency Letter of Credit, (iii)
Applicable Currency, (iv) expiration date of such Alternative Currency Letter of
Credit, (v) name and address of the beneficiary of such Alternative Currency
Letter of Credit and (vi) form of such Alternative Currency Letter of Credit,
and shall be accompanied by such application and agreement for letter of credit
as the Issuing Bank may specify to the Borrower for use in connection with such
requested Alternative Currency Letter of Credit (an "Alternative Currency Letter
of Credit Agreement"). If the requested form of such Alternative Currency Letter
of Credit is acceptable to the Issuing Bank, in its sole discretion, the Issuing
Bank may, in its sole discretion, upon fulfillment of the applicable conditions
set forth in Article III, make such Alternative Currency Letter of Credit
available to the Borrower as agreed between the Issuing Bank and the Borrower in
connection with such issuance, provided, that, such Alternative Currency Letter
of Credit shall in any event be made available to the Borrower or as the
Borrower may direct in London or the financial center of the country of the
Applicable Currency. In the event and to the extent that the provisions of any
such Alternative Currency Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.
(ii) The Issuing Bank shall furnish (i) to the Administrative
Agent on the first Business Day of each week a written report summarizing
issuance and expiration dates of Alternative Currency Letters of Credit issued
during the previous week and drawings during such week under all Alternative
Currency Letters of Credit, (ii) to the Administrative Agent, the Borrower, each
Alternative Currency Revolving Credit Lender and each other Revolving Credit
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Alternative Currency Letters of Credit issued
during the preceding month and drawings during such month under all Alternative
Currency Letters of Credit and (iii) to the Administrative Agent, the Borrower,
each Alternative Currency Revolving Credit Lender and each other Revolving
Credit Lender on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Alternative Currency Letters of Credit.
(iii) The payment by the Issuing Bank of a draft drawn under
any Alternative Currency Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of an Alternative Currency Letter
of Credit Advance which shall be a Prime Rate Advance, shall be denominated in
U.S. Dollars and shall for all purposes of this Agreement be treated the same as
a Revolving Credit Advance made as a Prime Rate Advance, in the amount of such
draft, the amount of such Alternative Currency Letter of Credit Advance to be
determined by the Administration Agent based on the Dollar Equivalent of such
draft. Each of the Borrower, the Administrative Agent, each Alternative Currency
Revolving Credit Lender and each other Revolving Credit Lender hereby
acknowledges and agrees that such Alternative Currency Letter
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of Credit Advances may be made, or deemed made, by the Issuing Bank in respect
of such Alternative Currency Letters of Credit and to participate in all
Alternative Currency Letter of Credit Advances made hereunder as provided
herein. Upon written demand by the Issuing Bank, with a copy of such demand to
the Administrative Agent, each Revolving Credit Lender shall purchase from the
Issuing Bank, and the Issuing Bank shall sell and assign to each Revolving
Credit Lender, such Lender's Pro Rata Share of each outstanding Alternative
Currency Letter of Credit Advance as of the date of such purchase, by making
available (for the account of its Applicable Lending Office) to the
Administrative Agent (for the account of the Issuing Bank), by deposit to the
Administrative Agent's Account, in same day funds in U.S. Dollars, an amount
equal to the portion of the outstanding principal amount of such Alternative
Currency Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. The Borrower hereby agrees to each such sale and assignment. Each
Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding
Alternative Currency Letter of Credit Advance on (i) the Business Day on which
demand therefor is made by the Issuing Bank, provided notice of such demand is
given not later than 11:00 A.M. (Buffalo, New York time) on such Business Day or
(ii) the first Business Day next succeeding such demand if notice of such demand
is given after such time. Upon any such assignment by the Issuing Bank to any
Revolving Credit Lender of a portion of an Alternative Currency Letter of Credit
Advance, the Issuing Bank represents and warrants to such Lender that the
Issuing Bank is the legal and beneficial owner of such interest being assigned
by it, free and clear of any liens, but makes no other representation or
warranty and assumes no responsibility with respect to such Alternative Currency
Letter of Credit Advance, the Loan Documents, the Borrower or any other Loan
Party. If and to the extent that any Revolving Credit Lender shall not have so
made the amount of such Alternative Currency Letter of Credit Advance available
to the Administrative Agent, such Alternative Currency Revolving Credit Lender
agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank until the date such amount is paid to the Administrative Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable. If such Lender shall pay to the Administrative Agent such amount for
the account of the Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute an Alternative Currency Letter of Credit
Advance made by such Lender on such Business Day for purposes of this Agreement,
and the outstanding principal amount of the Alternative Currency Letter of
Credit Advance made by the Issuing Bank shall be reduced by such amount on such
Business Day.
(e) Failure to Make Letter of Credit Advances or Alternative Currency
Letter of Credit Advances. The failure of any Lender to make any Letter of
Credit Advance or Alternative Currency Letter of Credit Advance to be made by it
on the date specified in Section 2.03(c) or (d), as applicable, shall not
relieve any other Lender of its obligation hereunder to make its Letter of
Credit Advance or Alternative Currency Letter of Credit Advance, as the case may
be, on such date, but no Lender shall be responsible for the failure of any
other Lender to make the Letter of Credit Advance or Alternative Currency Letter
of Credit Advance, as the case may be, to be made by such other Lender on such
date.
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SECTION 2.04. Repayment of Advances.
(a) Revolving Credit Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Revolving Credit Termination Date the aggregate outstanding principal amount
of the Revolving Credit Advances then outstanding.
(b) Alternative Currency Revolving Credit Advances. The Borrower shall
repay to the Administrative Agent for the ratable account of the Alternative
Currency Revolving Credit Lenders on the Revolving Credit Termination Date the
aggregate outstanding principal amount of the Alternative Currency Revolving
Credit Advances then outstanding.
(c) Swing Line Advances. The Borrower shall repay to the Administrative
Agent for the account of the Swing Line Bank and each other Revolving Credit
Lender that has made a Swing Line Advance the outstanding principal amount of
each Swing Line Advance made by each of them on the earlier of the maturity date
for such Swing Line Advance and the Revolving Credit Termination Date.
(d) Letter of Credit Advances and Alternative Currency Letter of Credit
Advances. (i) The Borrower shall repay to the Administrative Agent for the
account of the Issuing Bank and each other Revolving Credit Lender that has made
a Letter of Credit Advance or an Alternative Currency Letter of Credit Advance,
on the earlier of demand and the Revolving Credit Termination Date the
outstanding principal amount of each Letter of Credit Advance and each
Alternative Currency Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement, any Alternative Currency Letter of Credit Agreement
and any other agreement or instrument relating to any Letter of Credit,
including, without limitation, any Existing Letter of Credit, or any Alternative
Currency Letter of Credit, shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement, such Letter of
Credit Agreement, such Alternative Currency Letter of Credit Agreement and such
other agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(A) any lack of validity or enforceability of any
Loan Document, any Letter of Credit Agreement, any Alternative Currency
Letter of Credit Agreement, any Letter of Credit, including, without
limitation, any Existing Letter of Credit, any Alternative Currency
Letter of Credit or any other agreement or instrument relating to any
of the foregoing (all of the foregoing being, collectively, the "L/C
Related Documents");
(B) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations of
the Borrower in respect of any L/C Related Document or any other
amendment or waiver of or any consent to departure from all or any of
the L/C Related Documents;
(C) the existence of any claim, set-off, defense or
other right that the Borrower may have at any time against any
beneficiary or any transferee of a Letter of
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Credit or an Alternative Currency Letter of Credit (or any Persons for
whom any such beneficiary or any such transferee may be acting), the
Issuing Bank, or any other Person, whether in connection with the
transactions contemplated by the L/C Related Documents or any unrelated
transaction;
(D) any statement or any other document presented
under a Letter of Credit or an Alternative Currency Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect; or
(E) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment or waiver
of or consent to departure from any Guaranty or any other guarantee,
for all or any of the Obligations of the Borrower in respect of the L/C
Related Documents.
SECTION 2.05. Termination or Reduction of the Commitments.
(a) Optional. The Borrower may, upon at least three Business Days'
notice to the Administrative Agent, terminate in whole or reduce in part the
unused portions of the Letter of Credit Facility and the Unused Revolving Credit
Commitments; provided, however, that each partial reduction of a Facility (i)
shall be in an aggregate amount of $10,000,000 or an integral multiple of
$5,000,000 in excess thereof, and (ii) shall be made ratably among the
appropriate Lenders in accordance with their Commitments with respect to such
Facility.
(b) Mandatory. (i) The Revolving Credit Facility shall be automatically
and permanently reduced on the third anniversary of the Closing Date, by
$25,000,000, and on the fourth anniversary of the Closing Date, by an additional
$25,000,000, each such reduction to be made ratably among the Revolving Credit
Lenders in accordance with their Revolving Credit Commitments.
(ii) The Revolving Credit Facility shall be automatically and
permanently reduced on each date on which prepayment thereof is required to be
made pursuant to Section 2.06(b)(ii) or (iii) in an amount equal to the
applicable Reduction Amount, each such reduction to be made ratably among the
Revolving Credit Lenders in accordance with their Commitments, provided,
however, that, notwithstanding the foregoing, in the case of a sale, lease,
transfer or other disposition of all of the capital stock of, or all or
substantially all of the assets of, Minitec and/or Mechanical Products, after
prepayment of the Advances in accordance with Section 2.06(b), there shall be no
permanent reduction of the Revolving Credit Facility.
(iii) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Revolving Credit
Facility by the amount, if any, by which the amount of the Letter of Credit
Facility exceeds the Revolving Credit Facility after giving effect to such
reduction of the Revolving Credit Facility.
(iv) In the event that the Closing Date shall not have
occurred by April 30, 1998, then all of the Commitments shall be automatically
terminated and this Agreement shall be of no further force or effect.
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SECTION 2.06. Prepayments.
(a) Optional. The Borrower may, upon at least one (1) Business Day's
notice in the case of Prime Rate Advances and three (3) Business Days' notice in
the case of Eurodollar Rate Advances, in each case to the Administrative Agent
stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given the Borrower shall, permanently prepay the outstanding
aggregate principal amount of the Advances, in whole or ratably in part,
together with accrued interest to the date of such prepayment on the aggregate
principal amount prepaid; provided, however, that (i) each such partial
prepayment shall be in an aggregate principal amount of $10,000,000 or an
integral multiple of $5,000,000 in excess thereof and (ii) no such prepayment of
a Eurodollar Rate Advance shall be made other than on the last day of an
Interest Period therefor. Each permanent prepayment made pursuant to this
Section 2.06(a) shall be applied to repay the Facilities in the following
manner: first, to prepay Letter of Credit Advances then outstanding until such
Advances are paid in full; second, to prepay Alternative Currency Letter of
Credit Advances then outstanding until such Advances are paid in full; third, to
prepay Swing Line Advances then outstanding until such Advances are paid in
full; fourth, to prepay Alternative Currency Revolving Credit Advances then
outstanding until such Alternative Currency Revolving Credit Advances are paid
in full; fifth, to prepay Revolving Credit Advances then outstanding until such
Revolving Credit Advances are paid in full; and sixth, deposited in the L/C Cash
Collateral Account to cash collateralize 100% of the Available Amount of the
Letters of Credit and Alternative Currency Letters of Credit then outstanding.
Upon the drawing of any Letter of Credit or Alternative Currency Letter of
Credit for which funds are on deposit in the L/C Cash Collateral Account, such
funds shall be applied to reimburse the Issuing Bank or the Revolving Credit
Lenders, as applicable.
(b) Mandatory. (i) On the third anniversary of the Closing Date and the
fourth anniversary of the Closing Date, respectively, the Borrower shall prepay
the amount, if any, equal to the excess of (A) the aggregate principal amount of
the Revolving Credit Advances plus the aggregate Dollar Equivalent of
Alternative Currency Revolving Credit Advances plus the aggregate principal
amount of Swing Line Advances plus the aggregate principal amount of Letter of
Credit Advances plus the aggregate principal amount of Alternative Currency
Letter of Credit Advances plus the aggregate Available Amount of all Letters of
Credit, including, without limitation, all Existing Letters of Credit, plus the
aggregate Available Amount of all Alternative Currency Letters of Credit, in
each instance, as then outstanding, after giving effect to any Advances or
renewals on such date, over (B) the Revolving Credit Facility after giving
effect to the permanent reduction thereof on such anniversary of the Closing
Date in accordance with this Section 2.05(b)(i).
(ii) Within fifteen (15) days after receipt by any Loan Party
or any of its Subsidiaries of Net Cash Proceeds from the sale, lease, transfer
or other disposition of any property or assets of any Loan Party or any of its
Subsidiaries (other than any sale, lease, transfer or other disposition of
inventory in the ordinary course of business), the Borrower shall prepay the
then outstanding Advances in an amount equal to one-hundred percent (100%) of
such Net Cash Proceeds; provided, however, that, in the case of the sale, lease,
transfer or other disposition of all of the capital stock of, or all or
substantially all of the assets of, Minitec and/or Mechanical Products, such
prepayment of then outstanding Advances in an amount equal to one-hundred
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percent (100%) of such Net Cash Proceeds shall be applied to reduce then
outstanding Advances without any corresponding permanent reduction in the amount
of the Revolving Credit Facility.
(iii) Within fifteen (15) days following the receipt of Net
Cash Proceeds by any Loan Party or any of its Subsidiaries from any
Extraordinary Receipt received by or paid to or for the account of any Loan
Party or any of its Subsidiaries and not otherwise included in clause (ii)
above, the Borrower shall prepay the then outstanding Advances in an amount
equal to one hundred percent (100%) of such Net Cash Proceeds.
(iv) Each prepayment made pursuant to clause (i), (ii) or
(iii) shall be applied to prepay the Facilities in the following manner: first,
to prepay Letter of Credit Advances then outstanding until such Letter of Credit
Advances are paid in full; second, to prepay Alternative Currency Letter of
Credit Advances then outstanding until such Alternative Currency Letter of
Credit Advances are paid in full; third, to prepay Swing Line Advances then
outstanding until such Swing Line Advances are paid in full; fourth, to prepay
Alternative Currency Revolving Credit Advances then outstanding until such
Alternative Currency Revolving Credit Advances are paid in full; fifth, to
prepay Revolving Credit Advances then outstanding until such Revolving Credit
Advances are paid in full; and sixth, deposited in the L/C Cash Collateral
Account to cash collateralize 100% of the Available Amount of the Letters of
Credit and Alternative Currency Letters of Credit then outstanding. The amount
remaining (if any) after the required prepayment of the Advances then
outstanding and the 100% cash collateralization of the aggregate Available
Amount of Letters of Credit, including, without limitation, Existing Letters of
Credit, and Alternative Currency Letters of Credit then outstanding (the sum of
such prepayment amounts, cash collateralization amounts and remaining amount
being referred to herein as the "Reduction Amount") may be retained by the
Borrower. Upon the drawing of any Letter of Credit, including, without
limitation, any Existing Letter of Credit, or any Alternative Currency Letter of
Credit for which funds are on deposit in the L/C Cash Collateral Account, such
funds shall be applied to reimburse the Issuing Bank or the Revolving Credit
Lenders, as applicable. Upon the termination of all of the Commitments and the
indefeasible payment in full of all Obligations, including, without limitation,
termination or expiration of all Letters of Credit, including, without
limitation, all Existing Letters of Credit, and all Alternative Currency Letters
of Credit and the indefeasible payment in full of all Obligations in respect of
all Letters of Credit, including, without limitation, all Existing Letters of
Credit, and all Alternative Currency Letters of Credit funds, if any, then
remaining on deposit in the L/C Cash Collateral Account shall be returned to the
Borrower.
(v) The Borrower shall, within fifteen (15) days following the
end of each month in each Fiscal Year, pay to the Administrative Agent for
deposit in the L/C Cash Collateral Account an amount sufficient to cause the
aggregate amount on deposit in such Account to equal (i) the amount by which the
aggregate Available Amount of all Letters of Credit then outstanding exceeds the
Letter of Credit Facility on such Business Day plus (ii) the Dollar Equivalent
amount by which the aggregate Available Amount of all Alternative Currency
Letters of Credit then outstanding exceeds the Alternative Currency Letter of
Credit Facility on such Business Day.
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SECTION 2.07. Interest.
(a) Scheduled Interest. The Borrower shall pay to the Administrative
Agent, for the benefit of the Revolving Credit Lenders or Alternative Currency
Revolving Credit Lenders, as appropriate, interest on the unpaid principal
amount of each Advance owing to each Lender which has made such Advance from the
date of such Advance until such principal amount shall be paid in full, at the
following rates per annum:
(i) Prime Rate Advances. During such periods as such Advance
is a Prime Rate Advance, a rate per annum equal at all times to the sum of (x)
the Prime Rate in effect from time to time plus (y) the Applicable Margin for
such Advance in effect from time to time, payable in arrears monthly on the last
day of each month during such periods and on the date such Prime Rate Advance
shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (x) the Eurodollar Rate for
such Interest Period for such Advance plus (y) the Applicable Margin for such
Advance in effect on the first day of such Interest Period plus (z) if such
Advance is denominated in Pounds Sterling, the Additional Cost relating to such
Advance for such Interest Period, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such Eurodollar Rate
Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of
a Default, the Borrower shall pay interest on (i) the unpaid principal amount of
each Advance owing to each Lender, payable in arrears on the dates referred to
in clause (a)(i) or (a)(ii) above and on demand, at a rate per annum equal at
all times to 2% per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid, in the case
of interest, on the type of Advance on which such interest has accrued pursuant
to clause (a)(i) or (a)(ii) above, and, in all other cases, on Prime Rate
Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a) or a Notice of Alternative Currency
Borrowing pursuant to Section 2.02(b), the Administrative Agent shall give
notice to the Borrower and each appropriate Lender of the applicable interest
rate determined by the Administrative Agent for purposes of clause (a)(i) or
(ii).
SECTION 2.08. Fees.
(a) Revolving Credit Commitment Fee. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, a commitment fee, from the
Closing Date in the case of
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each Initial Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other Lender
until the Revolving Credit Termination Date, payable in arrears on the last
Business Day of each March, June, September, and December, commencing June 30,
1998, and on the Revolving Credit Termination Date, at a rate per annum equal to
the Applicable Margin then in effect for the Commitment Fee on the average daily
Unused Revolving Credit Commitment of such Lender. For the purposes of this
clause (a), (i) Swing Line Advances shall not constitute utilization of the
Revolving Credit Commitments of the Revolving Credit Lenders and (ii)
Alternative Currency Revolving Credit Advances shall not constitute utilization
of the Revolving Credit Commitments of Revolving Credit Lenders which are not
also Alternative Currency Revolving Credit Lenders.
(b) Letter of Credit and Alternative Currency Letter of Credit Fees.
(i) The Borrower shall pay to the Administrative Agent for the account of each
Revolving Credit Lender a commission, payable in arrears quarterly on the last
Business Day of each March, June, September and December, commencing June 30,
1998, and on the earliest to occur of the full drawing, expiration, termination
or cancellation of any Letter of Credit or Alternative Currency Letter of
Credit, other than a Trade Letter of Credit, and on the Revolving Credit
Termination Date, on such Lender's Pro Rata Share of the average daily aggregate
Available Amount during such quarter of all Letters of Credit, including,
without limitation, all Existing Letters of Credit, and the average daily
aggregate Available Amount during such quarter of all Alternative Currency
Letters of Credit, in each instance, excluding all Trade Letters of Credit and
outstanding from time to time at the rate per annum equal to the Applicable
Margin then in effect for Eurodollar Advances under the Revolving Credit
Facility. All fees payable under Section 2.08(b)(i), (ii) or (iii) in connection
with any Letter of Credit or Alternative Currency Letter of Credit shall be
payable in U.S. Dollars.
(ii) The Borrower shall pay to the Administrative Agent for
the account of each Revolving Credit Lender a commission, payable in arrears
quarterly on the last Business Day of each March, June, September and December,
commencing June 30, 1998, and on the earliest to occur of the full drawing,
expiration, termination or cancellation of any Trade Letter of Credit
(regardless of whether it is a Letter of Credit or an Alternative Currency
Letter of Credit) and on the Revolving Credit Termination Date, on such Lender's
Pro Rata Share of the average daily aggregate Available Amount during such
quarter of all Trade Letters of Credit (regardless of whether Letters of Credit
or Alternative Currency Letters of Credit) outstanding from time to time, at a
rate per annum equal to 0.25%.
(iii) The Borrower shall pay to the Issuing Bank, for its own
account, such commissions, issuance fees, fronting fees, transfer fees and other
fees and charges in connection with the issuance or administration of each
Letter of Credit and each Alternative Currency Letter of Credit as the Borrower
and the Issuing Bank shall agree.
(c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent.
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SECTION 2.09. Conversion of Advances.
(a) Optional. The Borrower may on any Business Day, upon notice given
to the Administrative Agent not later than 11:00 A.M. (Buffalo, New York time)
on the third (3rd) Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.07 and 2.10, Convert all or any portion
of the Advances of one Type comprising the same Borrowing into Advances of the
other Type; provided, however, that any Conversion of Eurodollar Rate Advances
into Prime Rate Advances shall be made only on the last day of an Interest
Period for such Eurodollar Rate Advances, any Conversion of Prime Rate Advances
into Eurodollar Rate Advances shall be in an amount not less than the minimum
amount specified in Section 2.01(a), no Conversion of any Advances shall result
in more separate Borrowings than permitted under Section 2.02(d) and each
Conversion of Advances comprising part of the same Borrowing under any Facility
shall be made ratably among the appropriate Lenders in accordance with their
Commitments under such Facility. Each such notice of Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the Advances to be Converted and (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the initial Interest Period for such Advances.
Each notice of Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $1,000,000, such Advances shall
automatically Convert into Prime Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Prime Rate Advance
and (y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
(c) Alternative Currency Revolving Credit Advances. Notwithstanding the
foregoing, Alternative Currency Revolving Credit Advances shall at all times be
Eurodollar Rate Advances, must comply with all provisions of this Agreement
applicable to Eurodollar Rate Advances and may not be converted by the Borrower
into Prime Rate Advances.
SECTION 2.10. Increased Costs, Etc.
(a) If, due to either (i) the introduction of or any change in reserve
requirements included in the Eurodollar Rate Reserve Percentage, or in the
interpretation of any law or regulation, or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender Party of agreeing to make or of making, funding or
maintaining
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Eurodollar Rate or Prime Rate Advances or of agreeing to issue or of issuing or
maintaining Letters of Credit or Alternative Currency Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Advances or
Alternative Currency Letter of Credit Advances (excluding for purposes of this
Section 2.10 any such increased costs resulting from (x) Taxes or Other Taxes
(as to which Section 2.12 shall govern) and (y) changes in the basis of taxation
of overall net income or overall gross income by the United States or by the
foreign jurisdiction or state under the laws of which such Lender Party is
organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party additional amounts
sufficient to compensate such Lender Party for such increased cost; provided,
however, that a Lender Party claiming additional amounts under this Section
2.10(a) agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost that may thereafter accrue and would
not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to the amount of such
increased cost, submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or reasonably expected to be maintained by any Lender
Party or any corporation controlling such Lender Party as a result of or based
upon the existence of such Lender Party's commitment to lend or to issue Letters
of Credit or Alternative Currency Letters of Credit hereunder and other
commitments of such type or the issuance or maintenance of the Letters of Credit
or Alternative Currency Letters of Credit (or similar contingent obligations),
then, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party's commitment to lend or to issue Letters of Credit or Alternative
Currency Letters of Credit hereunder or to the issuance or maintenance of any
Letters of Credit or Alternative Currency Letters of Credit. A certificate as to
such amounts submitted to the Borrower by such Lender Party shall be conclusive
and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least 66-2/3 % of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under any Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Prime Rate Advance and (ii)
the obligation of the appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the
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Administrative Agent shall notify the Borrower that such Lenders have determined
that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commit-
ment will automatically, upon such demand, Convert into a Prime Rate Advance and
(ii) the obligation of the appropriate Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist; provided, however, that, before making
any such demand, such Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation would
allow such Lender or its Eurodollar Lending Office to continue to perform its
obligations to make Eurodollar Rate Advances or to continue to find or maintain
Eurodollar Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.
SECTION 2.11. Payments and Computations.
(a) Except as otherwise specifically provided in this Agreement, the
Borrower shall make each payment hereunder and under the Notes, irrespective of
any right of counterclaim or set-off (except as otherwise provided in Section
2.15), not later than 11:00 A.M. (Buffalo, New York time) on the day when due in
U.S. Dollars to the Administrative Agent at the Administrative Agent's Account
in same day funds. The Administrative Agent will promptly thereafter cause like
funds to be distributed (i) if such payment by the Borrower is in respect of
principal, interest, commitment fees or any other Obligation then payable
hereunder and under the Notes to more than one Lender Party, to such Lender
Parties for the account of their respective Applicable Lending Offices ratably
in accordance with the amounts of such respective Obligations then payable to
such Lender Parties and (ii) if such payment by the Borrower is in respect of
any Obligation then payable hereunder to one Lender Party, to such Lender Party
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(d), from and after the effective date of
such Assignment and Acceptance, the Administrative Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender Party assignee thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such funds to each
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Lender Party ratably in accordance with such Lender Party's proportionate share
of the principal amount of all outstanding Advances and the Available Amount of
all Letters of Credit then outstanding, including, without limitation, all
Existing Letters of Credit then outstanding, and the Available Amount of all
Alternative Currency Letters of Credit, in repayment or prepayment of such of
the outstanding Advances or other Obligations owed to such Lender Party, and for
application to such principal installments, as the Administrative Agent shall
direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or, in
the case of a Lender, under a Note held by such Lender, to charge from time to
time against any or all of the Borrower's accounts with such Lender Party any
amount so due.
(d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate or, in the case of
Alternative Currency Revolving Credit Advances only, at the Administrative
Agent's applicable cost as determined by the Administrative Agent and notified
by it to such Lender Party.
SECTION 2.12. Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes
shall be made, in accordance with Section 2.11, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender Party and the Administrative Agent, net income taxes
that are imposed by the United States and net income taxes (or franchise taxes
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imposed in lieu thereof) that are imposed on such Lender Party or the
Administrative Agent by the state or foreign jurisdiction under the laws of
which such Lender Party or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender
Party, net income taxes (or franchise taxes imposed in lieu thereof) that are
imposed on such Lender Party by the state or foreign jurisdiction of such Lender
Party's Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender Party or the Administrative Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender Party or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and the
Administrative Agent for the full amount of Taxes and Other Taxes, and for the
full amount of taxes imposed by any jurisdiction on amounts payable under this
Section 2.12, imposed on or paid by such Lender Party or the Administrative
Agent, as the case may be, and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto, except
with respect to any Lender Party or the Administrative Agent, as the case may
be, for such a liability arising from such Lender Party's or the Administrative
Agent's, as the case may be, willful misconduct or gross negligence. This
indemnification shall be made within thirty (30) days from the date on which
such Lender Party or the Administrative Agent, as the case may be, makes written
demand specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 8.02, the original receipt of payment thereof or a certified copy of
such receipt. In the case of any payment hereunder or under the Notes by or on
behalf of the Borrower through an account or branch outside the United States or
by or on behalf of the Borrower by a payor that is not a United States person,
if the Borrower determines that no Taxes are payable in respect thereof, the
Borrower shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of this subsection (d) and subsection (e), the terms "United States"
and "United States person" shall have the meanings specified in Section 7701 of
the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial Issuing
Bank, as the case may be, and on the date of the
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Assignment and Acceptance pursuant to which it became a Lender Party in the case
of each other Lender Party, and from time to time thereafter as requested in
writing by the Borrower or the Administrative Agent (but only so long thereafter
as such Lender Party remains lawfully able to do so), provide each of the
Administrative Agent and the Borrower with two original Internal Revenue Service
forms 1001 or 4224, as appropriate, or any successor or other form prescribed by
the Internal Revenue Service, certifying that such Lender is exempt from or
entitled to a reduced rate of United States withholding tax on payments pursuant
to this Agreement or the Notes. If the forms provided by a Lender Party at the
time such Lender Party first becomes a party to this Agreement indicates a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and until such
Lender Party provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such form; provided, however, that,
if at the date of the Assignment and Acceptance pursuant to which a Lender Party
becomes a party to this Agreement, the Lender Party assignor was entitled to
payments under subsection (a) in respect of United States withholding tax with
respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender Party assignee on such date.
If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
form 1001 or 4224, that the Lender Party reasonably considers to be
confidential, the Lender Party shall give notice thereof to the Borrower and
shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender Party shall not be entitled
to indemnification under subsection (a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Lender Party become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
(g) Any Lender Party claiming any additional amounts payable pursuant
to this Section 2.12 agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (i) on account of Obligations
due and payable to such Lender Party hereunder or under the Notes at such time
in excess of its ratable share (according to the proportion of (x) the amount of
such Obligations due and payable to such Lender Party at such time to (y) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under
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the Notes at such time) of payments on account of the Obligations due and
payable to all Lender Parties hereunder or under the Notes at such time obtained
by all the Lender Parties at such time or (ii) on account of Obligations owing
(but not due and payable) to such Lender Party hereunder and under the Notes at
such time in excess of its ratable share (according to the proportion of (x) the
amount of such Obligations owing to such Lender Party at such time to (y) the
aggregate amount of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time) of payments on
account of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time obtained by all of the Lender Parties
at such time, such Lender Party shall forthwith notify the Administrative Agent
thereof and purchase from the other Lender Parties such participations in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and each such other
Lender Party shall repay to the purchasing Lender Party the purchase price to
the extent of such Lender Party's ratable share (according to the proportion of
(x) the purchase price paid to such Lender Party to (y) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (x) the
amount of such other Lender Party's required repayment to (y) the total amount
of such required repayments to the purchasing Lender Party) of any interest or
other amount paid or payable by the purchasing Lender Party in respect of the
total amount so recovered.
The Borrower agrees that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such participation.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances and
issuances of Letters of Credit and Alternative Currency Letters of Credit shall
be available, and the Borrower shall use such proceeds and Letters of Credit and
Alternative Currency Letters of Credit solely (i) to finance the Acquisition,
(ii) to pay fees and expenses incurred in connection with the Acquisition, (iii)
to refinance certain Existing Debt of the Borrower and LICO, and (iv) for
general corporate purposes, including to finance acquisitions permitted under
clause (B) of Section 5.02(d)(iii). Notwithstanding the foregoing or any other
provision of this Agreement or any other Loan Document, Letters of Credit in
face amounts not to exceed $5,000,000 in the aggregate may be issued by the
Issuing Bank hereunder in support of the Existing Marine Midland Letters of
Credit or otherwise for the benefit of Marine Midland in respect of the Existing
Marine Midland Letters of Credit.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so long
as no Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set off and otherwise apply the obligation
of the Borrower to make such payment to or for the account of such Defaulting
Lender against the obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that, on any date, the
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Borrower shall so set off and otherwise apply its obligation to make any such
payment against the obligation of such Defaulting Lender to make any such
Defaulted Advance on or prior to such date, the amount so set off and otherwise
applied by the Borrower shall constitute for all purposes of this Agreement and
the other Loan Documents an Advance by such Defaulting Lender made on the date
under the Facility pursuant to which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01. Such Advance shall be a
Prime Rate Advance and shall be considered, for all purposes of this Agreement,
to comprise part of the Borrowing in connection with which such Defaulted
Advance was originally required to have been made pursuant to Section 2.01, even
if the other Advances comprising such Borrowing shall be Eurodollar Rate
Advances on the date such Advance is deemed to be made pursuant to this
subsection (a). The Borrower shall notify the Administrative Agent at any time
the Borrower exercises its right of set-off pursuant to this subsection (a) and
shall set forth in such notice (i) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and (ii) the
amount set off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise required
to be made by the Borrower to or for the account of such Defaulting Lender which
is paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents, payment, to such
extent, of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent; and
(ii) second, to the Lender Parties for any Defaulted Amounts
then owing to such Lender Parties, ratably in accordance with such respective
Defaulted Amounts then owing to such Lender Parties.
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Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Fleet, in the name and under the control of the Administrative Agent, but
subject to the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Fleet's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent in escrow
under, and applied by the Administrative Agent from time to time in accordance
with the provisions of, this subsection (c). The Administrative Agent shall, to
the fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances required
to be made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender Party, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in escrow
shall at any time be insufficient to make and pay all such Advances and amounts
required to be made or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) second, to the Lender Parties for any amount then due and
payable by such Defaulting Lender to such Lender Parties hereunder, ratably in
accordance with such respective amounts then due and payable to such Lender
Parties; and
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents in such manner as the Administrative
Agent shall reasonably direct.
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(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Extension of Credit. The
obligation of each Lender to make an Advance or of the Issuing Bank to issue a
Letter of Credit (other than the Existing Letters of Credit, which are already
issued and outstanding on the date hereof) or an Alternative Currency Letter of
Credit on the occasion of the Initial Extension of Credit hereunder is subject
to the satisfaction of each of the following conditions precedent before or
concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or before the day
of the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the Administrative
Agent and the Lenders, and in sufficient copies (except for the Notes), for each
Lender Party:
(i) The Revolving Credit Notes payable to the order of the
Revolving Credit Lenders.
(ii) The Alternative Currency Notes payable to the order of
the Alternative Currency Revolving Credit Lenders.
(iii) A security agreement in substantially the form of
Exhibit F granting to the Administrative Agent, for the ratable benefit of the
Lenders, a first and only priority security interest in all of the personal
property and assets of the Borrower and each of its Domestic Significant
Subsidiaries and such other Domestic Subsidiaries of the Borrower as the
Administrative Agent may reasonably request and LICO and each of its Domestic
Significant Subsidiaries and such other Domestic Subsidiaries of LICO as the
Administrative Agent may reasonably request (together with each other security
agreement delivered pursuant to Section 5.01(m), in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms, each a "Security Agreement"), duly executed by the Borrower and each of
such of its Subsidiaries and LICO and each of such of its Subsidiaries, together
with:
(A) acknowledgment copies or stamped receipt copies
of proper financing statements, duly filed before the day of the
Initial Extension of Credit (or other confirmation reasonably
satisfactory to the Administrative Agent of such filing) under the
Uniform Commercial Code of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect and protect
the first and only priority liens and security interests created under
the Security Agreement, covering the Collateral described in the
Security Agreement;
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(B) completed requests for information, dated on or
before the date of the Initial Extension of Credit, listing the
financing statements referred to in clause (A) above and all other
effective financing statements filed in the jurisdictions referred to
in clause (A) above that name the Borrower or any of its Subsidiaries
or LICO or any of its Subsidiaries as debtor, together with copies of
such other financing statements;
(C) evidence of the completion of all other
recordings and filings of or with respect to the Security Agreement
that the Administrative Agent may deem necessary or desirable in order
to perfect and protect the Liens created thereby;
(D) evidence of the insurance required by the terms
of the Security Agreement;
(E) copies of the Assigned Agreements, if any,
referred to in the Security Agreement, together with a consent to such
assignments, if any, in substantially the form of Exhibit C to the
Security Agreement, duly executed by each party to such Assigned
Agreements other than the Borrower;
(F) certificates representing the Pledged Shares
referred to in the Security Agreement, accompanied by undated stock
powers executed in blank; and
(G) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the first and only priority liens and security
interests created under the Security Agreement has been taken.
(iv) An intellectual property security agreement in
substantially the form of Exhibit G hereto granting to the
Administrative Agent for the ratable benefit of the Lenders a first and
only priority security interest in all of the intellectual property of
the Borrower and each of its Domestic Significant Subsidiaries and such
other Domestic Subsidiaries of the Borrower as the Administrative Agent
shall reasonably request, and LICO and each of its Domestic Significant
Subsidiaries and such other Domestic Subsidiaries of LICO as the
Administrative Agent shall reasonably request (together with each other
intellectual property security agreement delivered pursuant to Section
5.01(m), in each case as amended, supplemented or otherwise modified
from time to time in accordance with its terms, each an "Intellectual
Property Security Agreement"), duly executed by the Borrower and each
of such of its Subsidiaries and LICO and each of such of its
Subsidiaries, together with evidence that all action that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the first and only priority liens and security
interests created under the Intellectual Property Security Agreement
has been taken.
(v) A guaranty in substantially the form of Exhibit H hereto
(as hereafter amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Guaranty"), duly executed by each Domestic
Significant Subsidiary of the Borrower or LICO and each such other Domestic
Subsidiary of the Borrower or LICO as the Administrative Agent may reasonably
request.
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(vi) Certified copies of (A) resolutions of the Board of
Directors of the Borrower and each other Loan Party approving this Agreement,
the Notes, the Acquisition, the LICO Stock Purchase Agreement, the Senior
Subordinated Notes, and each other Loan Document, Acquisition Document and
Senior Subordinated Note Document to which it is or is to be a party, and all of
the transactions contemplated hereby or thereby, including, without limitation,
the Acquisition and the offering of the Senior Subordinated Notes, and (B) all
documents evidencing other necessary corporate action and governmental and other
third party approvals and consents, if any, with respect to this Agreement, the
Notes, the Acquisition, the LICO Stock Purchase Agreement, the Senior
Subordinated Notes, the Senior Subordinated Note Indenture, and each other Loan
Document, Acquisition Document and Senior Subordinated Note Document, and all of
the transactions contemplated hereby or thereby, including, without limitation,
the Acquisition and the offering of the Senior Subordinated Notes.
(vii) A copy of the charter of the Borrower, LICO and each
other Loan Party and each amendment thereto, certified (as of a date reasonably
near the date of the Initial Exten-
sion of Credit) by the Secretary of State of the jurisdiction of its
incorporation as being a true and correct copy thereof.
(viii) A copy of a certificate of the Secretary of State of
the jurisdiction of its incorporation, dated within five (5) Business Days of
the date of the Initial Extension of Credit, listing the charter of the
Borrower, LICO and each other Loan Party and each amendment thereto on file in
its office and certifying that (A) such amendments are the only amendments to
the Borrower's, LICO's or such other Loan Party's charter on file in its office,
(B) the Borrower, LICO and each other Loan Party have paid all franchise taxes
to the date of such certificate and (C) the Borrower, LICO and each other Loan
Party are duly incorporated and in good standing under the laws of the State of
the jurisdiction of its incorporation.
(ix) A copy of a certificate of the Secretary of State of each
State listed on Schedule 3.01(a)(ix), dated reasonably near the date of the
Initial Extension of Credit, stating that the Borrower, LICO and each other Loan
Party are duly qualified and in good standing as foreign corporations in such
State and have filed all annual reports required to be filed to the date of such
certificate.
(x) A certificate of the Borrower, LICO and each other Loan
Party signed on behalf of the Borrower, LICO or such other Loan Party, as the
case may be, by a Responsible Officer and the Secretary or an Assistant
Secretary of the Borrower, LICO or such other Loan Party, as the case may be,
dated the date of the Initial Extension of Credit (the statements made in such
certificate shall be true on and as of the date of the Initial Extension of
Credit), certifying as to (A) the absence of any amendments to the charter of
the Borrower, LICO or such other Loan Party since the date of the Secretary of
State's certificate referred to in Section 3.01(a)(viii), (B) a true and correct
copy of the bylaws of the Borrower, LICO and each other Loan Party as in effect
on the date of the Initial Extension of Credit, (C) the due incorporation and
good standing of the Borrower, LICO and each other Loan Party as a corporation
organized under the laws of the jurisdiction of its incorporation, and the
absence of any proceeding for the dissolution or liquidation of the Borrower,
LICO or any other Loan Party, (D) the truth of the representations and
warranties contained in any Pre-Commitment Information, the Loan Documents, the
Acquisition Documents and the Senior Subordinated Note Documents as though made
on and as
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of the date of the Initial Extension of Credit and (E) the absence of any event
occurring and continuing, or resulting from the Initial Extension of Credit,
that constitutes a Default.
(xi) A certificate of the Secretary or an Assistant Secretary
of each of the Borrower, LICO and each other Loan Party certifying the names and
true signatures of the officers of the Borrower, LICO and each other Loan Party
authorized to sign this Agreement, the Notes, each other Loan Document to which
it is or is to be a party and the other documents to be delivered hereunder and
thereunder.
(xii) Such financial, business and other information regarding
the Borrower, LICO, each other Loan Party and each such Person's Subsidiaries as
any of the Lender Parties shall have reasonably requested, including, without
limitation, information as to possible contingent liabilities, tax matters,
Environmental Actions, Environmental Permits, obligations under Plans,
Multiemployer Plans and Welfare Plans, collective bargaining agreements and
other arrangements with employees, audited annual financial statements dated
March 31, 1997 (September 30, 1997, in the case of LICO and its Subsidiaries),
interim financial statements dated the end of the most recent fiscal quarter for
which financial statements are available (or, in the event the Lender Parties'
due diligence review reveals material changes since such financial statements,
as of a later date within thirty (30) days of the day of the Initial Extension
of Credit), pro forma financial statements as to the Borrower, LICO and each of
the other Loan Parties and forecasts prepared by management the Borrower, all in
form and substance reasonably satisfactory to the Lender Parties.
(xiii) A Notice of Borrowing.
(b) The Lender Parties shall be satisfied with the corporate and legal
structure and capitalization of the Borrower, each Guarantor and each Foreign
Significant Subsidiary, including, without limitation, the terms and conditions
of the charter, by-laws and each class of capital stock of the Borrower, each
such Guarantor and each such Foreign Significant Subsidiary and of each
agreement or instrument relating to such structure or capitalization.
(c) The Lender Parties shall be satisfied that all Existing Debt, other
than the Debt identified on Schedule 4.01(aa) (the "Surviving Debt"), has been
(or, upon consummation of the Acquisition, will be) prepaid, repaid, redeemed or
defeased in full or otherwise satisfied and extinguished, that all Liens in
respect thereof have been (or, upon consummation of the Acquisition, will be)
terminated and released and that all such Surviving Debt shall be on terms and
conditions satisfactory to the Lender Parties.
(d) There shall have occurred no material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of either (i) the Borrower and its Subsidiaries, taken
as a whole, since March 31, 1997, or (ii) LICO and its Subsidiaries, taken as a
whole, since September 30, 1997.
(e) There shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental or regulatory agency or authority that (i) could reasonably be
expected to (A) have a material adverse effect on the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the
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Borrower and its Subsidiaries, taken as a whole, or LICO and its Subsidiaries,
taken as a whole, (B) adversely affect the ability of the Borrower or any
Guarantor to perform its obligations under the Loan Documents or (C) adversely
affect the rights and remedies of the Administrative Agent and the Lender
Parties under the Loan Documents or (ii) purports to adversely affect any aspect
of the Transactions or the Facilities.
(f) All governmental and third party consents and approvals necessary
in connection with each aspect of the Acquisition, the Senior Subordinated Notes
(including, without limitation, the offering thereof), and the Facilities shall
have been obtained (without the imposition of any conditions that are not
acceptable to the Initial Lenders) and shall remain in effect; all applicable
waiting periods shall have expired without any adverse action being taken by any
competent authority; and no law or regulation shall be applicable in the
reasonable judgment of the Lender Parties that restrains, prevents or imposes
materially adverse conditions upon any aspect of the Acquisition, the Senior
Subordinated Notes (including, without limitation, the offering thereof) or the
Facilities.
(g) The Lender Parties shall have completed a due diligence
investigation of LICO and its Subsidiaries in scope, and with results,
satisfactory to the Lender Parties; the Borrower and each of the Guarantors
shall have given the Administrative Agent such access to their respective books
and records as the Administrative Agent may have requested in order to carry out
its investigations, appraisals and analyses, and the Lenders shall have received
all additional financial, business and other information regarding the Borrower,
LICO and their respective Subsidiaries and properties as they shall have
reasonably requested. All of the information provided by or on behalf of the
Borrower or any of its Subsidiaries or by or on behalf of LICO or any of its
Subsidiaries to the Administrative Agent or the Lender Parties prior to February
26, 1998 (the "Pre-Commitment Information") shall be true and correct in all
material aspects, and no development or change shall have occurred, and no
additional information shall have come to the attention of the Administrative
Agent or the Lenders, that (i) has resulted in or could reasonably be expected
to result in a material change in, or material deviation from, the
Pre-Commitment Information or (ii) has had or could reasonably be expected to
have a Material Adverse Effect.
(h) The Borrower shall have delivered a letter, in form and substance
satisfactory to the Administrative Agent, attesting to the Solvency (as
hereinafter defined) of the Borrower, individually and together with its
Subsidiaries, taken as a whole, immediately before and immediately after giving
effect to the Acquisition and the offering of the Senior Subordinated Notes,
from its chief financial officer. As used herein, the term "Solvency" of any
person means (i) the fair value of the property of such person exceeds its total
liabilities (including, without limitation, contingent liabilities), (ii) the
present fair saleable value of the assets of such person is not less than the
amount that will be required to pay its probable liability on its debts as they
become absolute and matured, (iii) such person does not intend to, and does not
believe that it will, incur debts or liabilities beyond its ability to pay as
such debts and liabilities mature and (iv) such person is not engaged, and is
not about to engage, in business or a transaction for which its property would
constitute an unreasonably small capital.
(i) The Borrower shall have demonstrated to the Administrative Agent's
reasonable satisfaction (i) whether the operations of the Borrower and its
Subsidiaries and LICO and its
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Subsidiaries comply in all material respects with applicable Environmental Laws
and health and safety statutes and regulations, including, without limitation,
regulations promulgated under the Federal Resource Conservation and Recovery
Act; (ii) whether such operations are the subject of any Environmental Actions
requiring an expenditure which could have a Material Adverse Effect on the
Borrower and its Subsidiaries, taken as a whole, or, in the case of LICO or any
of its Subsidiaries, LICO and its Subsidiaries, taken as a whole, to respond to
such Environmental Actions; (iii) whether the Borrower, any of the Guarantors or
any Foreign Significant Subsidiary has or could reasonably be expected to have
any contingent liability which could have a Material Adverse Effect on the
Borrower and its Subsidiaries, taken as a whole, or, in the case of LICO or any
of its Subsidiaries, LICO and its Subsidiaries, taken as a whole, in connection
with any Environmental Action; (iv) that the Borrower, LICO and their respective
Subsidiaries have complied in all material respects with applicable
Environmental Laws; and (v) that the Borrower has completed such environmental
investigations as the Administrative Agent may request with respect to the
operations of the Borrower and its Subsidiaries and LICO and its Subsidiaries
and such investigations have not uncovered any condition or conditions which
could reasonably be expected to have a Material Adverse Effect on the Borrower
and its Subsidiaries, taken as a whole, or, in the case of LICO or any of its
Subsidiaries, LICO and its Subsidiaries, taken as a whole.
(j) The Lenders shall be satisfied that (i) the Borrower and its
Subsidiaries will be able to meet their respective obligations under all
employee and retiree welfare plans, (ii) the employee benefit plans of the
Borrower and its Subsidiaries and of LICO and its Subsidiaries are, in all
material respects, funded in accordance with the minimum statutory requirements,
(iii) no material "reportable event" (as defined in ERISA, but excluding events
for which reporting has been waived) has occurred as to any such employee
benefit plan and (iv) no termination of, or withdrawal from, any such employee
benefit plan, including, without limitation, any Multiemployer Plan, has
occurred or is contemplated that could reasonably be expected to result in a
material liability. The Borrower shall have delivered to the Administrative
Agent copies of each employment agreement and each other compensation agreement
or arrangement with any officer of the Borrower, LICO or any other Loan Party.
(k) The Lenders shall be satisfied with the amount, types and terms and
conditions of all insurance maintained by or, after giving effect to the
consummation of the Acquisition, to be maintained by, the Borrower and its
Subsidiaries, and the Lenders shall have received endorsements naming the
Administrative Agent, on behalf of the Lenders, as an additional insured or loss
payee, as applicable, under all insurance policies to be maintained with respect
to the properties of the Borrower and its Subsidiaries forming any part of the
Lenders' Collateral under the Security Agreement and the other Loan Documents.
(l) The Lenders shall have received satisfactory opinions of counsel
for the Borrower and Guarantors, and of local and special counsel, to the extent
requested by the Administrative Agent, as to the transactions contemplated
hereby.
(m) There shall exist no Default or Event of Default under any of the
Loan Documents, and all legal matters incident to the Initial Extension of
Credit shall be satisfactory to counsel for the Administrative Agent.
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(n) All accrued fees and expenses of the Administrative Agent and the
Lenders (including the fees and expenses of counsel for the Administrative Agent
and local counsel for the Administrative Agent) shall have been paid.
(o) The final terms and conditions of the Acquisition (i) shall be as
described in this Agreement and otherwise consistent with the description
thereof received in writing as part of the Pre-Commitment Information and (ii)
shall be otherwise satisfactory to the Administrative Agent and Lenders. All
documentation relating to the Acquisition shall be in form and substance
satisfactory to the Administrative Agent. The Acquisition shall have been
consummated for aggregate consideration not in excess of $155,000,000, all in
accordance with the terms of the LICO Stock Purchase Agreement (such Agreement
to be in form and substance acceptable to the Administrative Agent), without any
waiver or amendment of any material term or condition contained therein not
consented to by the Administrative Agent and in compliance with all applicable
laws and all necessary approvals, and the Administrative Agent shall have
received evidence, in form and substance satisfactory to the Administrative
Agent, of such consummation.
(p) The final terms and conditions of the Senior Subordinated Notes
shall be in form and substance satisfactory to the Administrative Agent and
Lenders. All of the Senior Subordinated Note Documents, including the prospectus
and the Senior Subordinated Note Indenture, shall be in form and substance
satisfactory to the Administrative Agent and Lenders. The Senior Subordinated
Notes shall be general unsecured obligations of the Borrower, fully subordinated
to all Obligations under this Agreement and the other Loan Documents on terms
and pursuant to documentation acceptable to the Administrative Agent and
Lenders. The net proceeds of the offering of the Senior Subordinated Notes shall
be at least $190,000,000, and the entire net proceeds of the offering of the
Senior Subordinated Notes shall have been received by the Borrower and used by
the Borrower, together with proceeds of the Revolving Credit Facility, to
finance the Acquisition, to pay fees and expenses and to refinance existing
indebtedness, including, without limitation, the Existing Credit Agreement and
other Existing Debt, all in amounts and on terms acceptable to the
Administrative Agent and Lenders.
(q) All Advances made under this Agreement shall be in full compliance
with all applicable requirements of law, including, without limitation,
Regulations G, T, U and X.
(r) The Administrative Agent shall have received a duly executed and
delivered counterpart of landlord waivers from all landlords and leasehold
mortgage holders with respect to any Inventory located at a location that is not
owned by the Borrower, as deemed necessary or desirable in the Administrative
Agent's sole discretion, to preserve or otherwise in respect of the
Administrative Agent's rights in Collateral.
(s) The Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request, and all legal matters incident to such Borrowing shall be
satisfactory to the Administrative Agent.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. The
obligation of each appropriate Lender to make an Advance (other than a Revolving
Credit Advance made by a Revolving Credit Lender pursuant to Section 2.02(b), a
Letter of Credit Advance made by the Issuing Bank or a Revolving Credit Lender
pursuant to Section 2.03(c), an Alternative
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Currency Letter of Credit Advance made by Issuing Bank or a Revolving Credit
Lender pursuant to Section 2.03(d) and a Swing Line Advance made by a Revolving
Credit Lender pursuant to Section 2.02(c)), and the obligation of the Issuing
Bank to issue a Letter of Credit or an Alternative Currency Letter of Credit
(including the initial issuance thereof) or renew a Letter of Credit or an
Alternative Currency Letter of Credit and the right of the Borrower to request
the issuance or renewal of a Letter of Credit or an Alternative Currency Letter
of Credit, shall each be subject to the further conditions precedent that on the
date of each such Borrowing or issuance or renewal:
(a) Each of the conditions precedent listed in Section 3.01 shall have
been satisfied or waived in accordance with this Agreement.
(b) The following statements shall be true and the Administrative Agent
shall have received a certificate signed by a duly authorized officer of the
Borrower, dated the date of such Borrowing or issuance or renewal, stating that
(and each of the giving of the applicable Notice of Borrowing, Notice of Swing
Line Borrowing or Notice of Issuance or Notice of Renewal and the acceptance by
the Borrower of the proceeds of a Borrowing or of a Letter of Credit or the
renewal of a Letter of Credit shall constitute a representation and warranty by
the Borrower that both on the date of such notice and on the date of such
Borrowing or issuance or renewal such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving effect to
such Borrowing or issuance or renewal and to the application of the proceeds
therefrom, as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or renewal or from the application of the
proceeds therefrom, that consti-
tutes a Default; and
(iii) for each Revolving Credit Advance, Alternative Currency
Revolving Credit Advance, Swing Line Advance made by the Swing Line Bank or
issuance or renewal of any Letter of Credit or Alternative Currency Letter of
Credit, the Revolving Credit Facility exceeds the aggregate principal amount of
the Revolving Credit Advances plus the Assigned Dollar Value of Alternative
Currency Revolving Credit Advances plus Swing Line Advances plus Letter of
Credit Advances plus the Assigned Dollar Value of Alternative Currency Letter of
Credit Advances plus the aggregate Available Amount of all Letters of Credit and
Alternative Currency Letters of Credit, in each instance, then outstanding after
giving effect to such Advance or issuance or renewal, respectively.
(c) for each Alternative Currency Revolving Credit Advance or issuance
or renewal of any Alternative Currency Letter of Credit, the Alternative
Currency Revolving Credit Facility exceeds the aggregate principal amount of the
Assigned Dollar Value of Alternative Currency Revolving Credit Advances plus
Alternative Currency Letter of Credit Advances plus the aggregate Available
Amount of all Alternative Currency Letters of Credit, in each instance, then
outstanding after giving effect to such Advance or issuance or renewal,
respectively.
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(d) The Administrative Agent shall have received such other approvals,
opinions or documents as any appropriate Lender through the Administrative Agent
may reasonably request, and all legal matters incident to such Borrowing or
issuance of such Letter of Credit shall be satisfactory to counsel for the
Administrative Agent.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.0l, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received written notice from such
Lender Party prior to the Initial Extension of Credit, specifying its objection
thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed could not reasonably be
expected to have a Material Adverse Effect and (iii) has all requisite corporate
power and authority (including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party, showing as of the Closing Date,
after giving effect to the Borrower's satisfaction of the conditions precedent
set forth in Section 3.01(o) of this Agreement, and as to each such Subsidiary,
the jurisdiction of its incorporation, the number of shares of each class of
capital stock authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class owned (directly or
indirectly) by such Loan Party and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof. All of the outstanding capital stock of all of such
Subsidiaries has been validly issued, is fully paid and non-assessable and is
owned by such Loan Party or one or more of its Subsidiaries free and clear of
all Liens, except those created under the Collateral Documents. Each such
Subsidiary (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed, except where the failure to
so qualify or be licensed could not reasonably be expected to have a Material
Adverse Effect, and (iii) has all requisite corporate
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power and authority (including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party of this
Agreement, the Notes, each other Loan Document, each Acquisition Document to
which it is or is to be a party, and each Senior Subordinated Note Document to
which it is or is to be a party, and the consummation of the Acquisition and the
offering of the Senior Subordinated Notes, and the consummation of the other
transactions contemplated hereby and thereby, are within such Loan Party's
corporate powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene such Loan Party's charter or bylaws, (ii) violate any
law (including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any material contract, loan agreement, indenture,
mortgage, deed of trust, lease or other material instrument or agreement binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
respective properties or (iv) except for the Liens created under the Collateral
Documents, result in or require the creation or imposition of any Lien upon or
with respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of any
such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument or agreement, the
violation or breach of which could reasonably be expected to have a Material
Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other third
party is required for (i) the due execution, delivery, recordation, filing or
performance by any Loan Party of this Agreement, the Notes, any other Loan
Document, any Acquisition Document to which it is or is to be a party, or any
Senior Subordinated Note Document to which it is or is to be a party, or for the
consummation of the Acquisition or the offering of the Senior Subordinated
Notes, or the consummation of the other transactions contemplated hereby or
thereby, (ii) the grant by any Loan Party of the Liens granted by it pursuant to
the Collateral Documents, (iii) the perfection or maintenance of the Liens
created by the Collateral Documents (including the first and only priority
nature thereof) or (iv) the exercise by the Administrative Agent or any Lender
Party of its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for the authorizations,
approvals, actions, notices and filings listed on Schedule 4.01(d), all of which
have been duly obtained, taken, given or made and are in full force and effect.
All applicable waiting periods in connection with the Acquisition and the other
transactions contemplated hereby or thereby have expired without any action
having been taken by any competent authority restraining, preventing or imposing
materially adverse conditions upon the Acquisition, the offering of the Senior
Subordinated Notes or the transactions contemplated hereby or thereby or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
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(e) This Agreement, each of the Notes, each other Loan Document, each
Acquisition Document and each Senior Subordinated Note Document has been, or
when delivered hereunder will have been, duly executed and delivered by each
Loan Party thereto. This Agreement, each of the Notes, each other Loan Document,
each Acquisition Document and each Senior Subordinated Note Document has been,
or when delivered hereunder will be, the legal, valid and binding obligation of
each Loan Party thereto, enforceable against such Loan Party in accordance with
its terms.
(f) (i) The Consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as at March 31, 1997, and the related Consolidated
and consolidating statements of income and Consolidated and consolidating
statements of cash flows of the Borrower and its Subsidiaries for the fiscal
year then ended, accompanied by (in the case of such Consolidated financial
statements) an opinion of Ernst & Young LLP, independent public accountants, and
the Consolidated balance sheets of the Borrower and its Subsidiaries as at June
30, 1997, September 30, 1997 and December 31, 1997 and the related Consolidated
statements of income and Consolidated statements of cash flows of the Borrower
and its Subsidiaries for the periods then ended, duly certified by the chief
financial officer of the Borrower, copies of which have been furnished to each
Lender Party, fairly present, subject, in the case of said balance sheets as at
June 30, 1997, September 30, 1997 and December 31, 1997 and said statements of
income and cash flows for each of the periods then ended, to normal year-end
audit adjustments, the Consolidated (and, with respect to the balance sheets
dated March 31, 1997, consolidating) financial condition of the Borrower and its
Subsidiaries as at such dates and the Consolidated (and, with respect to the
statements of income dated March 31, 1997, consolidating) results of the
operations of the Borrower and its Subsidiaries for the period ended on such
date, all in accordance with generally accepted accounting principles applied on
a consistent basis, and, since March 31, 1997, there has been no Material
Adverse Change.
(ii) The consolidated and consolidating balance sheets of LICO
and its Subsidiaries as at September 30, 1997, and the related consolidated and
consolidating statements of income and consolidated and consolidating statements
of cash flows of LICO and its Subsidiaries for the fiscal year then ended,
accompanied by (in the case of such consolidated financial statements) the
opinion of Ernst & Young LLP, independent public accountants, and the
consolidated balance sheet of LICO and its Subsidiaries as at December 31, 1997
and the related consolidated statement of income and consolidated statement of
cash flows of LICO and its Subsidiaries for the three months then ended, copies
of which have been furnished to each Lender Party, fairly present, subject, in
the case of said balance sheet as at December 31, 1997 and said statements of
income and cash flows for the period then ended, to normal year-end audit
adjustments, the consolidated (and, with respect to the balance sheets dated
September 30, 1997, consolidating) financial condition of LICO and its
Subsidiaries as at such dates and the consolidated (and, with respect to the
statements of income dated September 30, 1997, consolidating) results of
operations of LICO and its Subsidiaries for the period ended on such date, all
in accordance with GAAP applied on a consistent basis, and since September 30,
1997, there has been no Material Adverse Change.
(g) The Consolidated pro forma balance sheet of the Borrower and its
Subsidiaries as at the date on which the Acquisition is consummated, and the
related Consolidated pro forma statement of income and cash flows of the
Borrower and its Subsidiaries for the period then
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ended, certified by the chief financial officer of the Borrower, copies of which
have been furnished to each Lender Party, fairly present the Consolidated pro
forma financial condition of the Borrower and its Subsidiaries as at such date
and the Consolidated pro forma results of operations of the Borrower and its
Subsidiaries for the period ended on such date, in each case after giving effect
to the Acquisition, the offering of the Senior Subordinated Notes (and the
receipt and application by the Borrower of the net proceeds therefrom) and the
other transactions contemplated hereby and thereby, all in accordance with GAAP.
(h) None of the Pre-Commitment Information or any information, exhibit
or report furnished by any Loan Party to the Administrative Agent or any Lender
Party in connection with the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements made therein not misleading.
(i) Except as set forth on Schedule 4.01(i) hereto, there is no action,
suit, investigation, litigation or proceeding affecting the Borrower, LICO, any
other Loan Party or any of their respective Subsidiaries, including, without
limitation, any Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that could reasonably be expected to have a
Material Adverse Effect, and there has been no material adverse change in the
status, or financial effect on any Loan Party or any of its Subsidiaries, of any
of the litigation disclosed on Schedule 4.01(i) from the description thereof set
forth on such Schedule 4.01(i).
(j) Neither the Borrower nor LICO nor any of their respective
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(k) Except as set forth on Schedule 4.01(k) hereto, none of the
Borrower, LICO or any of their ERISA Affiliates maintains or has maintained any
Plans or Multiemployer Plans. Set forth on Schedule 4.01(k) is a complete and
accurate list of all Welfare Plans and all defined contribution plans in respect
of which any Loan Party could have liability.
(l) Except as set forth in the financial statements referred to in this
Section 4.01 and in Section 5.03, none of the Borrower, LICO, any of the other
Loan Parties or any of their respective Subsidiaries has any material liability
with respect to "expected post retirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards No. 106.
(m) Neither the business nor the properties of any Loan Party or any of
its Subsidiaries are affected by any fire, explosion, accident, strike, lockout
or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or
of the public enemy or other casualty (whether or not covered by insurance) that
could reasonably be expected to have a Material Adverse Effect.
(n) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all known material respects with all applicable
Environmental Laws and Environmental Permits, all known past non-compliance with
such Environmental Laws and Environmental Permits has been resolved without
ongoing obligations or costs that could reasonably be expected to have a
Material Adverse Effect, and no circumstances exist that could reasonably be
expected to (i) form the basis of an Environmental Action against any Loan Party
or any of its Subsidiaries or any of their properties that could reasonably be
expected to have a Material Adverse Effect
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or (ii) cause any such property to be subject to any material restrictions on
ownership, occupancy, use or transferability under any Environmental Law.
(o) Except as disclosed in the environmental assessment reports listed
on Schedule 4.01(o) hereto and except for any or all disclosures which would not
either individually or in the aggregate be material to the Borrower or any other
Loan Party, (i) none of the properties currently or formerly owned or operated
by any Loan Party or any of its Subsidiaries is listed or proposed for listing
on the NPL or on the CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property; (ii) there are no and, to the best of its
knowledge, never have been any underground or aboveground storage tanks or any
surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous
Materials are being or, to the best of its knowledge, have been treated, stored
or disposed on any property currently owned or operated by any Loan Party or any
of its Subsidiaries or on any property formerly owned or operated by any Loan
Party or any of its Subsidiaries; (iii) there is no friable asbestos or friable
asbestos-containing material on any property currently owned or operated by any
Loan Party or any of its Subsidiaries; and (iv) Hazardous Materials have not
been released, discharged or disposed of on any property currently owned or
operated by any Loan Party or any of its Subsidiaries, or any property formerly
owned or operated by any Loan Party or any of its Subsidiaries or, to the best
of its knowledge, any property owned or operated or formerly owned or operated
by LICO or any of its Subsidiaries.
(p) Except as disclosed on Schedule 4.01(o), neither any Loan Party nor
any of its Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties, any
investigation or assessment or Remedial, Response or Removal action relating to
any actual or threatened release, discharge or disposal of Hazardous Materials
at any site, location or operation, either voluntarily or pursuant to the order
of any governmental or regulatory authority or the requirements of any
Environmental Law that could reasonably be expected to have a Material Adverse
Effect; and all Hazardous Materials generated, used, treated, handled or stored
at, or transported to or from, any property currently owned or operated by any
Loan Party or any of its Subsidiaries or any property formerly owned or operated
by any Loan Party or any of its Subsidiaries or, to the best of its knowledge,
any property owned or operated or formerly owned or operated by LICO or any of
its Subsidiaries have been disposed of in a manner not reasonably expected to
result in material liability to any Loan Party or any of its Subsidiaries.
(q) Except as set forth on Schedule 4.01(q), neither any Loan Party nor
any of its Subsidiaries nor LICO nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that could
reasonably be expected to have a Material Adverse Effect.
(r) The Collateral Documents create in favor of the Administrative
Agent, for the ratable benefit of the Lenders, a valid and perfected first
priority security interest in the Collateral (which Collateral includes all of
the assets and personal property, whether now owned or hereafter acquired and
all of the products and proceeds of any of the foregoing, of the Borrower and
each Guarantor, and all of the outstanding capital stock of each of the
Borrower's Domestic Subsidiaries and such of the Borrower's Foreign Subsidiaries
as are listed on Schedule 4.01(r)), securing the payment of the Obligations, and
all filings and other actions necessary or reasonably
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desirable to perfect and protect such security interest have been duly taken.
The Loan Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the liens and security interests created or
expressly permitted under the Loan Documents.
(s) Each Loan Party and each of its Subsidiaries has filed, has caused
to be filed or has been included in all tax returns (Federal, state, local and
foreign) required to be filed and has paid all taxes shown thereon to be due,
together with applicable interest and penalties.
(t) Set forth on Schedule 4.01(t) is a complete and accurate list of
each taxable year of each Loan Party and each of its Subsidiaries for which
Federal income tax returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection has not occurred
by reason of extension or otherwise (an "Open Year").
(u) There is no unpaid amount of adjustments to the Federal income tax
liability of each Loan Party and each of its Subsidiaries proposed by the
Internal Revenue Service with respect to Open Years. No issues have been raised
by the Internal Revenue Service in respect of Open Years that, in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(v) There is no unpaid amount of adjustments to the state, local and
foreign tax liability of each Loan Party and its Subsidiaries proposed by any
state, local or foreign taxing authorities (other than amounts arising from
adjustments to Federal income tax returns). No issues have been raised by such
taxing authorities that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(w) Except to the extent effected by the consummation of the
Acquisition, no "ownership change" as defined in Section 382(g) of the Internal
Revenue Code, and no event that would result in the application of the "separate
return limitation year" or "consolidated return change of ownership" limitations
under the Federal income tax consolidated return regulations, has occurred with
respect to any Loan Party.
(x) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the making of any Advances,
nor the issuance of any Letters of Credit, nor the application of the proceeds
or repayment thereof by the Borrower, nor the consummation of the Acquisition or
the other transactions contemplated hereby or thereby, will violate any
provision of such Act or any rule, regulation or order of the Securities and
Exchange Commission thereunder or any takeover, disclosure or other federal,
state or foreign securities law or Regulations G, T, U or X of the Federal
Reserve Board. The Borrower is not subject to regulation under any federal,
state or foreign statute or regulation which limits its ability to incur Debt.
(y) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(z) Set forth on Schedule 4.01(z) is a complete and accurate list of
all Existing Debt the principal amount of which is greater than $1,000,000
(other than Surviving Debt), showing
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as of the date hereof the principal amount outstanding thereunder, the maturity
date thereof and the amortization schedule therefor.
(aa) Set forth on Schedule 4.01(aa) is a complete and accurate list of
all Surviving Debt the principal amount of which is greater than $1,000,000,
showing as of the date hereof the principal amount outstanding thereunder, the
maturity date thereof and the amortization schedule therefor.
(bb) Set forth on Schedule 4.01 (bb) is a complete and accurate list of
all real property owned by any Loan Party or any of its Subsidiaries or in which
any Loan Party has an interest as a contract vendee, showing as of the date
hereof the street address, county or other relevant jurisdiction, state, record
owner and book and estimated fair value thereof. Each Loan Party or such
Subsidiary has good, marketable and insurable fee simple title to such real
property, free and clear of all Liens, other than Permitted Liens.
(cc) Set forth on Schedule 4.01(cc) is a complete and accurate list of
all leases of real property under which any Loan Party or any of its
Subsidiaries is the lessee, showing as of the date hereof the street address,
county or other relevant jurisdiction, state, lessor, lessee, expiration date
and annual rental cost thereof. To the best knowledge of each Loan Party, each
such lease is the legal, valid and binding obligation of the lessor thereof,
enforceable in accordance with its terms.
(dd) Set forth on Schedule 4.01(dd) is a complete and accurate list of
all Material Contracts of each Loan Party and its Subsidiaries, showing as of
the date hereof the parties, subject matter and term thereof. Except as could
not reasonably be expected to have a Material Adverse Effect, each such Material
Contract has been duly authorized, executed and delivered by all parties
thereto, has not been amended or otherwise modified, is in full force and effect
and is binding upon and enforceable against all parties thereto in accordance
with its terms. There exists no material default under any Material Contract by
the Borrower, LICO or any of their respective Subsidiaries party thereto and, to
the best knowledge of each Loan Party, there exists no default under any
Material Contract by any other party thereto.
(ee) Set forth on Schedule 4.01(ee) is a complete and accurate list of
all Investments in excess of $1,000,000 held by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
(ff) Set forth on Schedule 4.01(ff) is a complete and accurate list of
all patents, trademarks, trade names, service marks and copyrights, and all
applications therefor and licenses thereof, of each Loan Party or any of its
Subsidiaries, showing as of the date hereof the jurisdiction in which
registered, the registration number, the date of registration and the expiration
date. Each Loan Party and each of their respective Subsidiaries owns or has
rights to use all patents, trademarks, trade names, service marks, copyrights
and other intellectual property necessary to conduct its business as now or
heretofore conducted by it or proposed to be conducted by it. Each Loan Party
and each of their respective Subsidiaries conducts its business and affairs
without infringement of or interference with any patent, trademark, trade name,
service mark, copyright or other intellectual property of any other Person.
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(gg) Each Acquisition Document and each Senior Subordinated Note
Document to which the Borrower or any of its Subsidiaries is a party has been
duly executed and delivered by the Borrower or such Subsidiary, as the case may
be, and, to the best knowledge of the Borrower, each Acquisition Document and
each Senior Subordinated Note Document has been duly executed and delivered by
the parties thereto other than the Borrower and its Subsidiaries and is in full
force and effect. The representations and warranties of the Borrower and each of
its Subsidiaries contained in each Acquisition Document and each Senior
Subordinated Note Document to which the Borrower or such Subsidiary, as the case
may be, is a party are true and correct in all material respects on the date
hereof and will be true and correct in all material respects on the Closing
Date, as if made on such date, and the Administrative Agent and each Lender
Party shall be entitled to rely upon such representations and warranties with
the same force and effect as if they were incorporated in this Agreement and
made to the Administrative Agent and each Lender Party directly as of the date
hereof and the Closing Date. To the best knowledge of the Borrower and each of
its Subsidiaries, the representations and warranties of each other party,
including, without limitation, in the case of the Acquisition Documents, LICO,
to each Acquisition Document and each Senior Subordinated Note Document
contained therein are true and correct in all material respects on the date
hereof and will be true and correct on the Closing Date as if made on such date.
(ii) Except for the fees to be paid to the initial purchasers in
accordance with the Senior Subordinated Note Documents (which fees are fully
disclosed in the prospectus used in connection with the offering and sale of the
Senior Subordinated Notes), no broker's or finder's fees or commissions or any
similar fees or commissions will be payable by the Borrower or any Subsidiary
with respect to the incurrence and maintenance of the Obligations, any other
transaction contemplated by the Loan Documents, the Acquisition Documents or the
Senior Subordinated Note Documents or any services rendered in connection with
any such transactions. The Borrower hereby covenants and agrees to indemnify the
Administrative Agent and each Lender Party against and hold the Administrative
Agent and each Lender Party harmless from any claim, demand or liability for
broker's or finder's fees or similar fees or commissions, including, without
limitation, those of the initial purchasers under the Senior Subordinated Note
Documents and those of any financial advisors to LICO, incurred or alleged to
have been incurred in connection with any of the transactions contemplated
hereby, by the Acquisition Documents or by the Senior Subordinated Note
Documents.
(hh) For as long as any Senior Subordinated Notes, or guaranties
executed in connection therewith, remain outstanding, all principal and interest
in respect of the Advances, and all other Obligations under this Agreement or
any other Loan Document, including, without limitation, (i) Obligations to pay
charges, expenses, fees, attorneys' fees and disbursements, indemnities, Letter
of Credit and Alternative Currency Letter of Credit commissions and other
amounts payable by the Borrower and/or any of the other Loan Parties under this
Agreement or any other Loan Document, (ii) all liabilities and other Obligations
arising out of, based upon or relating to Existing Letters of Credit or any
other Letters of Credit or any Alternative Currency Letters of Credit, and (iii)
all Obligations to reimburse any amounts in respect of any of the foregoing that
any Lender Party, in its sole discretion, may elect to pay or advance on behalf
of any Loan Party, constitute Senior Debt (as defined in the Senior Subordinated
Note Indenture) and Designated Senior Debt (as defined in the Senior
Subordinated Note Indenture). As such, all of the Obligations (and the
Administrative Agent and Lenders) are entitled to the benefits of each of
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the subordination and other provisions contained in the Senior Subordinated Note
Documents which are available in respect of Senior Debt and Designated Senior
Debt (and to the holders thereof), and each of such subordination and other
provisions is in full force and effect and enforceable in accordance with its
terms.
ARTICLE V
COVENANTS OF THE BORROWER AND THE SUBSIDIARIES
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit or Alternative Currency Letter of Credit
shall be outstanding or any Lender Party shall have any Commitment hereunder,
the Borrower will:
(a) Compliance with Law. Comply, and cause each of its Subsidiaries to
comply, in all material respects, with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation, compliance with
ERISA.
(b) Payment of Taxes, Etc. Timely pay and discharge, and cause each of
its Subsidiaries to timely pay and discharge, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property and (ii) all
lawful claims that, if unpaid, might by law become a Lien upon its property;
provided, however, that the Borrower and its Subsidiaries shall not be required
to pay or discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which appropriate
reserves are being maintained, unless and until any Lien resulting therefrom
attaches to its property and becomes enforceable against the Borrower or any of
its Subsidiaries; and, provided, further, that, if such Lien, individually and
in the aggregate with all such other Liens, does not secure more than $250,000
of taxes, assessments, charges and claims, such Lien may be paid within three
(3) Business Days after the Borrower or such Subsidiary, as the case may be,
obtains knowledge thereof.
(c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause each of
its Subsidiaries to obtain and renew all Environmental Permits reasonably
necessary for its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove and
clean up all Hazardous Materials from any of its properties, in accordance with
the requirements of all Environmental Laws; provided, however, that the Borrower
and its Subsidiaries shall not be required to undertake any such cleanup,
Removal, Remedial or Response action to the extent that its obligation to do so
is being contested in good faith and by proper proceedings and adequate reserves
as reasonably determined by the Administrative Agent are being maintained with
respect to such circumstances.
(d) Preparation of Environmental Reports. The Borrower agrees that the
Administrative Agent may, upon reasonable prior notice, from time to time in its
reasonable discretion, retain, in consultation with the Borrower and at the
Borrower's expense, an
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independent professional consultant to prepare environmental site assessment
reports for the Borrower or any of its Subsidiaries and/or to review any report
(other than a report properly subject to attorney-client privilege) relating to
Hazardous Materials prepared by or for the Borrower and, upon a reasonable
belief that the Borrower or any of its Subsidiaries has breached any covenant or
representation with respect to environmental matters or that there has been a
material violation of Environmental Laws by the Borrower or one of its
Subsidiaries, the Administrative Agent may conduct its own investigation of such
matter at any facility or property currently owned, leased, operated or used by
the Borrower or one of its Subsidiaries and the Borrower agrees to use its best
efforts to obtain permission for the Administrative Agent's professional
consultant to conduct its own investigation of any such matter at any facility
or property previously owned, leased, operated or used by the Borrower or one of
its Subsidiaries. The Borrower and its Subsidiaries hereby grant to the
Administrative Agent, its employees, consultants and contractors, the right to
enter into or onto the facilities or properties currently owned, leased,
operated or used by the Borrower or its Subsidiaries upon reasonable notice to
the Borrower to perform such assessments on such property as are reasonably
necessary to conduct such a review and/or investigation. Any such investigation
of any such facility or property shall be conducted, unless otherwise agreed to
by the Borrower and the Administrative Agent, during normal business hours and,
to the extent reasonably practicable, shall be conducted so as not to interfere
with the ongoing operations at any facility or property or to cause any damage
or loss to any facility or property. The Borrower and the Administrative Agent
hereby acknowledge and agree that any report of any investigation conducted at
the request of the Administrative Agent will be obtained and shall be reasonably
used by the Administrative Agent and Lender Parties for the purpose of internal
credit decisions to monitor and police the Advances and/or protect the
Administrative Agent's and Lender Parties' security interests in the Collateral
and shall not be used by the Administrative Agent or Lender Parties for any
other purpose except as otherwise expressly set forth in this Agreement. The
Administrative Agent and Lender Parties acknowledge and agree that any such
report and any information or data gleaned from or based upon any such report or
investigation conducted by the Administrative Agent, by the Borrower or by both
the Administrative Agent and Borrower acting in cooperation hereunder, is and
will be considered Confidential Information for the purposes of this Agreement.
The Administrative Agent agrees to deliver a copy of any such report to the
Borrower with the understanding that the Borrower acknowledges and agrees that
(i) the Borrower will indemnify and hold harmless the Administrative Agent and
each Lender Party from any costs, losses or liabilities relating to the
Borrower's use of or reliance on such report and (ii) neither the Administrative
Agent nor any Lender Party makes any representation or warranty with respect to
such report.
(e) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates.
(f) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises.
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(g) Visitation Rights. (i) At any reasonable time and from time to
time, upon reasonable notice, permit the Administrative Agent or any agents or
representatives thereof, together with no more than three (3) designated
representatives of the Required Lenders, to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of
the Borrower and its Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and any such Subsidiaries with any of their officers or
directors.
(ii) In the case of the Borrower, meet at least once each
calendar year (and more frequently if the Administrative Agent so requests) with
representatives of the Adminis-
trative Agent and the Lender Parties to discuss the affairs, finances and
accounts of the Borrower and the Subsidiaries.
(iii) If a Default or Event of Default has occurred and is
continuing, permit the Administrative Agent, on behalf of the Lender Parties, to
conduct such commercial finance examinations and/or Collateral audits of the
Borrower and its Subsidiaries as the Administrative Agent may reasonably
request. Such commercial finance examinations and Collateral audits shall be
conducted, in accordance with the Administrative Agent's instructions and
protocol, by, at the Administrative Agent's election, either Ernst & Young LLP
or any other Person reasonably selected by the Administrative Agent.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Borrower
and each such Subsidiary in accordance with GAAP.
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties that
are reasonably necessary in the conduct of its business in good working order
and condition, ordinary wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property to
which the Borrower or any of its Subsidiaries is a party, keep such leases in
full force and effect and not allow such leases to lapse or be terminated or any
rights to renew such leases to be forfeited or canceled, notify the
Administrative Agent of any default by any party with respect to such leases and
cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so except, in any case, where
the failure to do so, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(k) Performance of Material Contracts. Perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms and provisions
of each Material Contract to be performed or observed by it, maintain, and cause
each of its Subsidiaries to maintain, each such Material Contract in full force
and effect, and enforce, and cause each of its Subsidiaries to enforce, each
such Material Contract in accordance with its terms.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to the Borrower or such
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Subsidiary than it would obtain in a comparable arms-length transaction with a
Person not an Affiliate.
(m) Agreement to Grant Additional Security. (i) Promptly, and in any
event within thirty (30) days after the acquisition of assets of the type that
would have constituted Collateral at the date hereof and investments of the type
that would have constituted Collateral on the date hereof (other than assets
with a fair market value of less than $50,000), notify the Administrative Agent
of the acquisition of such assets or investments and, to the extent not already
Collateral in which the Administrative Agent has a perfected security interest
pursuant to the Collateral Documents, such assets and investments will become
additional Collateral hereunder to the extent the Administrative Agent deems the
pledge of such assets practicable (the "Additional Collateral"), and the
Borrower will, and will cause each of its Subsidiaries to, take all necessary
action, including the filing of appropriate financing statements under the
provisions of the UCC, applicable foreign, domestic or local laws, rules or
regulations in each of the offices where such filing is necessary or appropriate
to grant Administrative Agent a perfected Lien in such Collateral (or comparable
interest under foreign law in the case of foreign Collateral) pursuant to and to
the full extent required by the Collateral Documents and this Agreement.
(ii) Promptly, and in any event no later than thirty (30) days
after a request with respect thereto, cause (a) LICO and each of its Domestic
Significant Subsidiaries and such other of LICO's Domestic Subsidiaries as the
Administrative Agent shall reasonably request, and (b) each of the Borrower's
Domestic Significant Subsidiaries and such other of the Borrower's Domestic
Subsidiaries as the Administrative Agent shall reasonably request, to become
party to, or to execute and deliver, a Guaranty guarantying to the
Administrative Agent and the Lenders the prompt payment, when and as due, of all
Obligations of the Loan Parties under the Loan Documents, including all
obligations under any Hedge Agreements entered into by a Lender Party pursuant
to, and in accordance with the terms and conditions of, Section 5.02(b)(v), each
such Guaranty to be in form and substance satisfactory to Administrative Agent.
(iii) Promptly, and in any event no later than thirty (30)
days after a request with respect thereto, pledge to the Administrative Agent,
for the ratable benefit of the Lenders and pursuant to the Security Agreement
(or another pledge or security agreement in form and substance satisfactory to
the Administrative Agent), all (100%) of the capital stock of each of the
Borrower's Domestic Subsidiaries (including, without limitation, of LICO and its
Domestic Subsidiaries) and sixty-five percent (65%) of the capital stock of such
of the Borrower's Foreign Subsidiaries (including, without limitation, of LICO's
Foreign Subsidiaries) as the Administrative Agent shall reasonably request after
consultation with the Borrower.
(iv) Promptly, and in any event no later than thirty (30) days
after a request with respect thereto, pledge to the Administrative Agent, for
the ratable benefit of the Lenders, and pursuant to the Security Agreement (or
another pledge and security agreement in form and substance satisfactory to the
Administrative Agent) sixty-five percent (65%) of the capital stock of all or
such of the Borrower's Foreign Significant Subsidiaries (including, without
limitation, of LICO's Foreign Significant Subsidiaries) as the Administrative
Agent or Required Lenders shall request and, in connection therewith, shall
deliver such legal opinions (including, without limitation, of local counsel
satisfactory to the Administrative Agent) as to perfection and other
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matters as the Administrative Agent or Required Lenders may request, each such
legal opinion to be in form and substance satisfactory to the Administrative
Agent and its counsel.
(v) Promptly, and in any event no later than thirty (30) days
after a request with respect thereto, cause each Guarantor created or
established after the date hereof to grant to the Administrative Agent, for the
ratable benefit of the Lenders, a first priority Lien on all property (tangible
and intangible) of such Guarantor upon terms similar to those set forth in the
Collateral Documents and otherwise satisfactory in form and substance to
Administrative Agent. The Borrower shall cause each Guarantor, at its own
expense, to become a party to a Security Agreement and an Intellectual Property
Security Agreement and to execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record in any appropriate governmental office, any document or instrument
reasonably deemed by Administrative Agent to be necessary or desirable for the
creation and perfection of the foregoing Liens (including any additional or
substitute security agreements). The Borrower will cause each such Guarantor to
take all actions requested by Administrative Agent (including, without
limitation, the filing of UCC-1's) in connection with the granting of such
security interests.
(vi) Promptly, and in any event not later than thirty (30)
days after a request with respect thereto, (A) deliver to the Administrative
Agent the original of all instruments, documents and chattel paper, and all
other Collateral of which the Administrative Agent determines it should have
physical possession in order to perfect and protect its security interest
therein, duly pledged, endorsed or assigned to the Administrative Agent without
restriction; (B) obtain landlord waivers, in form and substance satisfactory to
the Administrative Agent, with respect to any Inventory or other Collateral
located at a location that is not owned by the Borrower or a Subsidiary; (C)
deliver to the Administrative Agent warehouse receipts covering any portion of
the Inventory or other Collateral located in warehouses and for which warehouse
receipts are issued; (D) when an Event of Default exists, transfer Inventory to
locations designated by the Administrative Agent; (E) if any Collateral is at
any time in the possession or control of any warehousemen, bailee or any of the
Borrower's agents or processors, notify the Administrative Agent thereof and
notify such person of the Administrative Agent's security interest in such
Collateral and obtain a landlord waiver or bailee letter, in form and substance
satisfactory to the Administrative Agent, from such person and instruct such
person to hold all such Collateral for the Administrative Agent's account
subject to the Administrative Agent's instructions; (F) if at any time any
Inventory or other Collateral is located on any real property of the Borrower
which is subject to a mortgage or other Lien, obtain a mortgagee waiver, in form
and substance satisfactory to the Administrative Agent, from the holder of each
mortgage or other Lien on such real property; and (G) take all such other
actions and obtain all such other agreements as the Administrative Agent may
reasonably deem necessary or desirable in respect of any Collateral.
(vii) The security interests required to be granted pursuant
to this Section shall be granted pursuant to the Collateral Documents or, in the
Administrative Agent's discretion, such other security documentation (which
shall be substantially similar to the Collateral Documents already executed and
delivered by the Borrower) as is satisfactory in form and substance to
Administrative Agent (the "Additional Collateral Documents") and shall
constitute valid and enforceable perfected security interests prior to the
rights of all third Persons and subject to no
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other Liens except Liens permitted under Section 5.02(a). The Additional
Collateral Documents and other instruments related thereto shall be duly
recorded or filed in such manner and in such places and at such times as are
required by law to establish, perfect, preserve and protect the Liens, in favor
of Administrative Agent, for the benefit of the Lender Parties, granted pursuant
to the Additional Collateral Documents and, all taxes, fees and other charges
payable in connection therewith shall be paid in full by the Borrower. At the
time of the execution and delivery of Additional Collateral Documents, the
Borrower shall cause to be delivered to Administrative Agent such agreements,
opinions of counsel, and other related documents as may be reasonably requested
by the Administrative Agent or the Required Lenders to assure themselves that
this Section has been complied with.
(n) Performance of Acquisition Documents. Perform and observe, or cause
the relevant Subsidiary to perform and observe, all of the terms and provisions
of each Acquisition Document to be performed or observed by it or such
Subsidiary, maintain each such Acquisition Document in full force and effect,
enforce each such Acquisition Document in accordance with its terms, take all
such action to such end as may be from time to time requested by the Adminis-
trative Agent and, upon request of the Administrative Agent, make to each other
party to each such Acquisition Document such demands and requests for action or
for information and reports as the Borrower or any Subsidiary is entitled to
make under such Acquisition Document.
(o) Cash Concentration Accounts. The Borrower will, and will cause each
of its Subsidiaries to, maintain its main cash concentration accounts with the
Administrative Agent.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid, any Letter of Credit or Alternative Currency Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will not, at any time, without the prior consent of the Required
Lenders:
(a) Liens, Etc.. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on
or with respect to any of its properties of any character (including, without
limitation, Accounts, Inventory and other Collateral) whether now owned or
hereafter acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial
Code or any other statute of any jurisdiction, a financing statement that names
the Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist,
or permit any of its Subsidiaries to sign or suffer to exist, any security
agreement authorizing any secured party thereunder to file any such financing
statement, or assign, or permit any of its Subsidiaries to assign, any accounts
or other right to receive income, excluding, however, from the operation of the
foregoing restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described
on Schedule 5.02(a)(iii);
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(iv) purchase money Liens upon real property or equipment
acquired or held by the Borrower or any of its Subsidiaries in the ordinary
course of business to secure the purchase price of such real property or
equipment or to secure Debt incurred solely for the purpose of financing the
acquisition, construction or improvement of any such real property or equipment
to be subject to such Liens, or Liens existing on any such real property or
equipment at the time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the same or a
lesser amount; provided, however, that no such Lien shall extend to or cover any
property other than the real property or equipment being acquired, constructed
or improved, and no such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being extended, renewed
or replaced; and, provided, further, that the aggregate principal amount of the
Debt secured by Liens permitted by this clause (iv) shall not exceed $4,000,000
at any time outstanding; and, provided, further, that any such Debt shall not
otherwise be prohibited by the terms of the Loan Documents;
(v) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iii)(B); provided, that no such Lien shall
extend to or cover any Collateral or any assets other than the assets subject to
such Capitalized Leases;
(vi) the replacement, extension or renewal of any Lien
permitted by clauses (iii) through (v) above upon or in the same property
theretofore subject thereto in connection with the replacement, extension or
renewal (without increase in the amount or any change in any direct or
contingent obligor) of the Debt secured thereby.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt other
than:
(i) in the case of the Borrower, Debt incurred pursuant to the
Loan Documents;
(ii) in the case of any of the Subsidiaries of the Borrower,
Debt owed to the Borrower or to a wholly-owned Subsidiary of the Borrower;
provided, that, such Debt is evidenced by a promissory note, such promissory
note is pledged to the Administrative Agent pursuant to the terms of the
Security Agreement and there are no restrictions whatsoever on the ability of
the Subsidiary to repay such Debt;
(iii) unsecured, fully subordinated Debt of the Borrower and
certain of its Domestic Subsidiaries incurred under the Senior Subordinated Note
Indenture and the other Senior Subordinated Note Documents in an aggregate
amount not to exceed $200,000,000 less the amount of any and all prepayments, if
any, of principal thereof after the date of this Agreement;
(iv) in the case of the Borrower and any of its Subsidiaries:
(A) Debt secured by Liens permitted by Section
5.02(a)(iv) not to exceed in the aggregate $4,000,000 at any
time outstanding;
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(B) Capitalized Leases not to exceed in the aggregate
$2,000,000 at any time outstanding;
(C) the Surviving Debt, and any Debt extending the
maturity of, or refunding or refinancing, in whole or in part,
the Surviving Debt; provided, that the terms of any such
extending, refunding or refinancing Debt, and of any agreement
entered into and of any instrument issued in connection
therewith, are consented to in writing by the Administrative
Agent, with the approval of the Required Lenders, and
otherwise permitted by this Agreement and the other Loan
Documents; and, provided, further, that the principal amount
of such Surviving Debt shall not be increased above the
principal amount thereof outstanding on the date hereof, and
the direct and contingent obligors therefor shall not be
changed, as a result of or in connection with such extension,
refunding or refinancing; and
(D) endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course
of business;
(v) in the case of the Borrower, Debt in respect of Hedge
Agreements entered into from time to time in the ordinary course of business by
the Borrower with counterparties that are Hedge Banks in connection with
transactions otherwise expressly permitted hereunder; provided, that (A) the
Borrower shall have notified the Administrative Agent in writing prior to
entering into each and every such Hedge Agreement and (B) each and every such
Hedge Agreement shall be non-speculative in nature (including, without
limitation, with respect to the term and purpose thereof);
(vi) in the case of Yale Germany or Univeyor, Debt of Yale
Germany or Univeyor, as the case may be, in an amount for all such Debt of Yale
Germany and Univeyor not to exceed the Dollar Equivalent of $20,000,000 in the
aggregate at any one time outstanding; provided, that (A) such Debt is incurred
solely by Yale Germany or Univeyor, as the case may be, (B) such Debt is either
unsecured or secured only by the assets of Yale Germany or Univeyor, as the case
may be, and (C) no guaranty or other credit support of any kind is provided by
any Person (including, without limitation, the Borrower or any of its
Subsidiaries) of or for such Debt or any holder thereof, other than an unsecured
guaranty (having terms and conditions acceptable to the Administrative Agent, in
its sole discretion) by the Borrower limited to the amount of Debt incurred by
Yale Germany or Univeyor, as the case may be; and provided, further, that (X)
the Borrower shall notify the Administrative Agent in writing in advance prior
to permitting Yale Germany or Univeyor to incur any Debt under this Section
5.02(b)(vi) and (Y) prior to the Borrower entering into any unsecured guaranty
pursuant to clause (C) above, the Borrower shall have provided a draft copy of
such guaranty to the Administrative Agent for its review and such guaranty shall
be in form and substance satisfactory to the Administrative Agent, in its sole
discretion; and
(vii) in the case of the Borrower, unsecured Debt incurred in
the ordinary course of business for the deferred purchase price of property or
services, maturing within one year from the date created, and aggregating, on a
Consolidated basis, not more than $3,000,000 at any one time outstanding.
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(c) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligations as lessee (i) for the rental or hire of real or personal property in
connection with any sale and leaseback transaction, or (ii) for the rental or
hire of other real or personal property of any kind under leases or agreements
to lease, including, without limitation, Capitalized Leases having an original
term of one year or more, that would cause the direct and contingent liabilities
of the Borrower and its Subsidiaries, on a Consolidated basis, in respect of all
such obligations to exceed $5,000,000 payable in any period of 12 consecutive
months.
(d) Fundamental Changes. (i) Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any of its Subsidiaries to do
any of the foregoing;
(ii) liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), convey, sell, assign, lease, transfer or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or
substantially all of its property, business or assets, or permit any of its
Subsidiaries to do any of the foregoing; and
(iii) acquire or permit any Subsidiary to acquire all or
substantially all of the assets of any other Person (including capital stock),
(A) except that the Borrower may consummate the Acquisition in accordance with
the terms and conditions of the LICO Stock Purchase Agreement and (B) except
that the Borrower or any wholly-owned Subsidiary of the Borrower may acquire all
or substantially all of the assets, or all of the capital stock, of any Person
(the "Target") (in each case, a "Permitted Acquisition") subject to the
satisfaction of each of the following conditions:
(1) the Administrative Agent shall have received
at least twenty (20) Business Days' prior
written notice of such proposed Permitted
Acquisition, which notice shall include a
reasonably detailed description of such
proposed Permitted Acquisition;
(2) such Permitted Acquisition shall only
involve a business of the same type engaged
in by the Borrower or one of its
Subsidiaries as of the date hereof, or a
business reasonably incidental thereto, and
such acquired business shall not subject the
Administrative Agent or any Lender to any
regulatory or third party approvals in
connection with the exercise of its rights
and remedies under this Agreement or any
other Loan Document, other than approvals
applicable to the exercise of such rights
and remedies prior to such Permitted
Acquisition;
(3) such Permitted Acquisition shall be
consensual and shall have been approved by
the Target's board of directors;
(4) the sum of all amounts payable in connection
with all Permitted Acquisitions (including
all transaction costs and all Debt,
liabilities and contingent obligations
incurred or assumed in connection
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therewith or otherwise reflected on a
balance sheet of the Target) shall not
exceed $35,000,000 in the aggregate in any
Fiscal Year;
(5) the business and assets acquired in such
Permitted Acquisition shall be free and
clear of all Liens, other than Permitted
Liens and other non-material Liens
acceptable to the Administrative Agent, in
its reasonable discretion, including, by way
of example, but not of limitation, Liens in
respect of purchase money indebtedness
incurred by the Target in the ordinary
course of business and Liens consisting of
mortgages on real property the amount and
terms of which mortgages are acceptable to
the Administrative Agent, in its sole
discretion;
(6) at or prior to the closing of any Permitted
Acquisition, the Administrative Agent, on
behalf of the Secured Parties, shall be
granted a first priority perfected Lien
(subject only to Liens expressly permitted
under clause (5) immediately above) in all
assets of the Target and each of its
Domestic Significant Subsidiaries and in all
of the Target's and each of its Significant
Subsidiaries' capital stock, the Target and
each of its Domestic Significant
Subsidiaries shall each become a party to
the Guaranty and the Borrower, each of the
Borrower's Subsidiaries and the Target and
each of the Target's Subsidiaries shall each
have executed and delivered all such
Collateral Documents and other documents and
taken all such actions as may be required by
the Administrative Agent in connection
therewith;
(7) at the time of such Permitted Acquisition
and after giving effect thereto, including,
without limitation, after giving pro forma
effect thereto for purposes of each of the
Financial Covenants set forth in Section
5.04 of this Agreement, no Default or Event
of Default shall have occurred and be
continuing or would result therefrom; and
(8) prior to the date of such Permitted
Acquisition, the Administrative Agent shall
have received, in form and substance
satisfactory to the Administrative Agent,
copies of the acquisition agreement and all
related agreements and instruments, and all
legal opinions, officer's certificates and
other certificates, lien search results and
other information and documents reasonably
requested by the Administrative Agent.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any assets or grant any option or other right to purchase, lease or
otherwise acquire any assets, except:
(i) sales of Inventory in the ordinary course of business;
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(ii) sales of obsolete equipment in the ordinary course of
business;
(iii) the sale of any asset by the Borrower or any of its
Subsidiaries (other than a sale of Inventory or a sale of Receivables) so long
as (A) the purchase price paid to the Borrower or such Subsidiary for such asset
shall be no less than the fair market value of such asset at the time of such
sale, (B) the purchase price for such asset shall be paid to the Borrower or
such Subsidiary solely in cash and (C) the aggregate purchase price paid to the
Borrower and all of its Subsidiaries for such asset and all other assets sold by
the Borrower and its Subsidiaries pursuant to this clause (iii) since the date
of this Agreement shall not exceed $25,000,000 in the aggregate;
(iv) the sale of all of the capital stock, or all or
substantially all of the assets, of Minitec and/or Mechanical Products;
provided, that (A) the purchase price paid to the Borrower in connection with
any such sale shall be no less than the fair market value of Minitec and/or
Mechanical Products, as the case may be, and (B) the purchase price is paid to
the Borrower at least 75% in cash; and
provided, further, that in the case of sales of assets pursuant to Section
5.02(e)(ii), (iii) or (iv) above, the Borrower shall, on the date of receipt
thereof, apply the entire Net Cash Proceeds from such sale in accordance with
Section 2.06(b)(ii).
(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments by the Borrower and its Subsidiaries in their
Subsidiaries outstanding on the date hereof and described on Schedule
5.02(f)(i), and additional investments in wholly-owned Subsidiaries of the
Borrower in an aggregate amount invested not to exceed $7,000,000 in the
aggregate in any Fiscal Year; provided, however, that no more than an aggre-
gate amount equal to $3,000,000 shall be invested (in addition to investments
outstanding on the date hereof and described on Schedule 5.02(f)(i))in
wholly-owned Foreign Subsidiaries in any Fiscal Year; and, provided, further,
that with respect to Investments in any newly acquired or created wholly-owned
Subsidiary, (A) any such Subsidiary which is a Domestic Significant Subsidiary
shall become a Guarantor pursuant to the terms of the Guaranty and an additional
grantor pursuant to the terms of the Security Agreement and Intellectual
Property Security Agreement and (B) the Borrower shall otherwise comply with the
provisions of Section 5.01(m);
(ii) Loans and advances to officers and other employees in the
ordinary course of the business of the Borrower and its Subsidiaries in an
aggregate principal amount not to exceed $500,000 at any time outstanding;
(iii) Investments by the Borrower and its Subsidiaries in Cash
Equivalents;
(iv) Investments consisting of intercompany Debt permitted
under Section 5.02(b)(ii); and
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(v) Investments existing on the date hereof and described on
Schedule 5.02(f)(vii) hereto.
(g) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or any
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit any of its
Subsidiaries to do any of the foregoing or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of the Borrower or any warrants, rights or options to acquire such capital
stock or to issue or sell any such capital stock or any warrants, rights or
options to acquire such capital stock, except:
(i) so long as no Default or Event of Default shall have
occurred and be continuing, or would result therefrom, the Borrower may declare
and pay regular quarterly dividends in cash on its common stock in an aggregate
amount not to exceed $10,000,000 in any Fiscal Year,
(ii) the Borrower may declare and pay dividends and
distributions payable solely in common stock of the Borrower,
(iii) a Subsidiary of the Borrower may declare and pay
dividends and distributions to the Borrower,
(iv) for issuances of stock expressly permitted by Section
5.02(r).
(h) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(i) Charter Amendments. Amend, or permit any of its Subsidiaries to
amend, its certificate or articles of incorporation or bylaws.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by GAAP (which required changes may be
made on a timely basis), or (ii) its Fiscal Year.
(k) Prepayments, Etc. of Debt. (i) Prepay, redeem, purchase, call,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, including, without limitation, as a result of an asset sale, change of
control or any other event or occurrence, or make any payment in violation of
any subordination terms of, any Debt, including, without limitation, the Senior
Subordinated Notes, or make any payment of principal, interest or liquidated
damages in respect of the Senior Subordinated Notes, other than (A) as expressly
provided in Schedule 4.01(aa), (B) the prepayment of Advances in accordance with
the terms of this Agreement, (C) so long as no Default or Event of Default shall
have occurred and be continuing, or would result therefrom, regularly scheduled
payments of interest (but not of principal) in respect of the Senior
Subordinated Notes in accordance with the terms and conditions of the Senior
Subordinated Note
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Indenture, (D) so long as no Default or Event of Default shall have occurred and
be continuing, or would result therefrom, the redemption of up to 35% of the
aggregate original principal amount of the Senior Subordinated Notes plus
accrued but unpaid interest thereon in accordance with the terms and conditions
of the Senior Subordinated Note Indenture with the net proceeds of one or more
public offerings of common stock of the Borrower, and (E) so long as no Default
or Event of Default shall have occurred and be continuing, or would result
therefrom, the payment of Liquidated Damages (as such term is defined in the
Senior Subordinated Note Documents) in an aggregate amount not to exceed
$150,000, it being understood that any payment of Liquidated Damages which
causes such aggregate amount to exceed $150,000 shall constitute an immediate
Event of Default hereunder or (ii) amend, modify or change in any manner any
term or condition of any Existing Debt or Surviving Debt, including, without
limitation, the Senior Subordinated Notes, or (iii) permit any of its
Subsidiaries to do any of the foregoing other than to repay any Debt payable to
the Borrower.
(l) Amendment, Etc. of Acquisition Documents or Senior Subordinated
Note Documents. Cancel or terminate any Acquisition Document or Senior
Subordinated Note Document or consent to or accept any cancellation or
termination thereof, amend, modify or change in any manner any term or condition
of any Acquisition Document or Senior Subordinated Note Document or give any
consent, waiver or approval thereunder, waive any default under or any breach of
any term or condition of any Acquisition Document or Senior Subordinated Note
Document or take any other action in connection with any Acquisition Document or
Senior Subordinated Note Document that would impair the value of the interests
or rights of the Borrower or any of its Subsidiaries thereunder or that would
impair the interests or rights of the Administrative Agent or any Lender Party,
or permit any of its Subsidiaries to do any of the foregoing.
(m) Amendment, Etc. of Material Contracts. Cancel or terminate any
Material Contract or consent to or accept any cancellation or termination
thereof, amend or otherwise modify any Material Contract or give any consent,
waiver or approval thereunder, waive any default under or breach of any Material
Contract or take any other action in connection with any Material Contract that
would materially impair the value of the interests or rights of the Borrower or
any of its Subsidiaries thereunder or that would materially impair the interests
or rights of the Administrative Agent or any Lender Party, or permit any of its
Subsidiaries to do any of the foregoing.
(n) Negative Pledge. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its properties
or assets other than as provided in the Loan Documents.
(o) Partnerships, New Subsidiaries. (i) Become a general partner in any
general or limited partnership or joint venture, or permit any of its
Subsidiaries to do so, or (ii) create any new Subsidiary, unless such newly
created Subsidiary shall become a Guarantor pursuant to the terms of the
Guaranty and an additional grantor pursuant to the terms of the Security
Agreement and Intellectual Property Security Agreement and all shares of the
capital stock of such new Subsidiary are pledged to the Administrative Agent
pursuant to the Pledge Agreement.
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(p) Speculative Transactions. Engage, or permit any of its Subsidiaries
to engage, in any transaction involving commodity options or futures contracts
or derivatives or any similar speculative transactions.
(q) Capital Expenditures. Make, or permit any of its Subsidiaries to
make, any Capital Expenditures in excess of an amount equal to $25,000,000 in
the aggregate in any Fiscal Year.
(r) Issuance of Stock. (i) The Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, issue, sell, assign, pledge
or otherwise encumber or dispose of any shares of capital stock of the Borrower
or any Subsidiary of the Borrower, except (x) to the Borrower, (y) to qualify
directors if required by applicable law or (z) as set forth in Schedule 5.02(r),
and except for issuances of common stock for cash by the Borrower to the extent
expressly permitted under Section 5.02(r)(ii) below.
(ii) The Borrower shall not issue any capital stock, except
for issuances of its common stock for cash in one or more underwritten public
offerings registered under the Securities Act of 1933, as amended, where no
Default or Event of Default either exists or, after giving effect to such
issuance, will exist.
SECTION 5.03. Reporting Requirements. So long as any Advance shall
remain unpaid, any Letter of Credit or Alternative Currency Letter of Credit
shall be outstanding or any Lender Party shall have any Commitment hereunder,
the Borrower will furnish to the Administrative Agent and Lender Parties:
(a) Default Notice. As soon as possible and in any event within two (2)
Business Days after obtaining knowledge of the occurrence of any Default or any
event, development or occurrence reasonably likely to have a Material Adverse
Effect, a statement of the chief financial officer of the Borrower setting forth
details of such Default or event, development or occurrence and the action that
the Borrower has taken and proposes to take with respect thereto.
(b) Quarterly Financials. As soon as available and in any event within
forty-five (45) days after the end of each of the first, second and third fiscal
quarters of each Fiscal Year, and as soon as available and in any event within
ninety (90) days after the end of the fourth fiscal quarter of each Fiscal Year,
a Consolidated balance sheet of the Borrower and its Subsidiaries, and
consolidating balance sheets of the Borrower and its Significant Subsidiaries,
as of the end of such quarter and a Consolidated statement of income and a
Consolidated statement of cash flows of the Borrower and its Subsidiaries, and
consolidating statements of income and consolidating statements of cash flows of
the Borrower and its Significant Subsidiaries, for the period commencing at the
end of the previous fiscal quarter and ending with the end of such fiscal
quarter and a Consolidated statement of income and a Consolidated statement of
cash flows of the Borrower and its Subsidiaries, and consolidating statements of
income and consolidating statements of cash flows of the Borrower and its
Significant Subsidiaries, for the period commencing at the end of the previous
Fiscal Year and ending with the end of such fiscal quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
period of the preceding Fiscal Year and the corresponding figures from the
budgeted forecasts delivered pursuant to Section 5.03(e) for such period and for
the Fiscal Year which includes such period, all in reasonable detail and duly
certified by the chief financial
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officer of the Borrower as having been prepared in accordance with GAAP (subject
to normal year-end audit adjustments), together with (i) a certificate of said
officer stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Borrower has taken and proposes to take with respect thereto and
(ii) a schedule in form satisfactory to the Administrative Agent of the
computations used by the Borrower in determining compliance with the financial
covenants contained in Sections 5.04(a) through (d), provided, that in the event
of any change in GAAP used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination of compliance
with Section 5.04, a statement of reconciliation conforming such financial
statements to GAAP. In connection with the Borrower's delivery of all quarterly
financial statements pursuant to the foregoing, the Borrower shall also furnish
to the Administrative Agent and Lender Parties a contract progress report with
respect to each and every ongoing contracted for project in process of the
Borrower, LICO or any of their respective Subsidiaries which involves aggregate
payments during the life of such contract in excess of $5,000,000. All such
contract in progress reports shall be prepared in a manner and presented in a
form reasonably acceptable to the Administrative Agent.
(c) Annual Financials. As soon as available and in any event within one
hundred and five (105) days after the end of each Fiscal Year, a copy of the
annual audit report for such year for the Borrower and its Subsidiaries,
including therein a Consolidated balance sheet of the Borrower and its
Subsidiaries, and consolidating balance sheets of the Borrower and its
Significant Subsidiaries, as of the end of such Fiscal Year and a Consolidated
statement of income and a Consolidated statement of cash flows of the Borrower
and its Subsidiaries, and consolidating statements of income and consolidating
statements of cash flows of the Borrower and its Significant Subsidiaries, for
such Fiscal Year, in each case setting forth in comparative form the
corresponding figures for the prior Fiscal Year and the corresponding figures
from the budgeted forecasts delivered pursuant to Section 5.03(e) for such
Fiscal Year and in each case accompanied (in the case of such Consolidated
financial statements) by an opinion acceptable to the Administrative Agent, with
the consent of the Required Lenders, of Ernst & Young LLP or other independent
certified public accountants of recognized national standing acceptable to the
Administrative Agent, with the consent of the Required Lenders, together with
(i) a letter of such accounting firm to the Administrative Agent and Lender
Parties stating that in the course of the regular audit of the business of the
Borrower and its Subsidiaries, which audit was conducted by such accounting firm
in accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that a Default has occurred and is continuing, or if,
in the opinion of such accounting firm, a Default has occurred and is
continuing, a statement as to the nature thereof, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by such
accountants in determining, as of the end of such Fiscal Year, compliance with
the covenants contained in Sections 5.04(a) through (d), provided, that in the
event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the determination
of compliance with Section 5.04, a statement of reconciliation conforming such
financial statements to GAAP and (iii) a certificate of the chief financial
officer of the Borrower stating that no Default has occurred and is continuing
or, if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take with
respect thereto.
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(d) Pro Forma Financials. In connection with the delivery of all
financial statements delivered under Section 5.03(b) or 5.03(c) above, pro forma
financial statements reflecting the acquisition of LICO and all other
acquisitions made by the Borrower or one of its Subsidiaries at any time during
such period, such pro forma financials to be prepared both (i) for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such fiscal quarter or Fiscal Year, as the case may be, as if the acquisition of
LICO and all such other acquisitions had occurred at the beginning of such
period and (ii) for the corresponding period of the preceding Fiscal Year,
setting forth the corresponding figures for such corresponding period of the
preceding Fiscal Year, as if the acquisition of LICO and all such other
acquisitions had occurred at the beginning of such corresponding period. All pro
forma balance sheets shall be prepared as if the acquisition of LICO and all
such other acquisitions had occurred as of the beginning of the period ending on
the relevant balance sheet date, and all pro forma statements of income and pro
forma statements of cash flows shall be prepared as if the acquisition of LICO
and all such other acquisitions had occurred at the beginning of the relevant
periods reflected therein. All pro forma financial statements shall be prepared
on a basis and presented in a form reasonably acceptable to the Administrative
Agent. The requirements set forth in this Section 5.03(d) to deliver pro forma
financial statements with respect to the acquisition of LICO or any other
acquisition made by the Borrower or one of its Subsidiaries, as the case may be,
shall continue until such time as the acquisition of LICO or such other
acquisition, as the case may be, has been fully reflected for all relevant time
periods in the financial statements delivered under Section 5.03(b) or 5.03(c)
above, as appropriate, whereupon the requirements to deliver pro forma financial
statements with respect to the acquisition of LICO or such other acquisition, as
the case may be, shall cease with respect to the acquisition of LICO or such
other acquisition, as the case may be, only, but shall continue with respect to
any and all acquisitions of the Borrower or one of its Subsidiaries other than
the acquisition of LICO or such other acquisition, as the case may be.
(e) Annual Forecasts. As soon as available and in any event no later
than sixty (60) days after the end of each Fiscal Year, forecasts prepared by
management of the Borrower, in form reasonably satisfactory to the
Administrative Agent, of balance sheets, income statements and cash flow
statements on a quarterly basis for the Fiscal Year following such Fiscal Year
then ended.
(f) ERISA Events and ERISA Reports. (i) Promptly and in any event
within twenty (20) days after any Loan Party or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of the chief
financial officer of the Borrower describing such ERISA Event and the action, if
any, that such Loan Party or such ERISA Affiliate has taken and proposes to take
with respect thereto and (ii) on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan pursuant to
Section 4010 of ERISA, a copy of such records, documents and information.
(g) Plan Terminations. Promptly and in any event within five (5)
Business Days after receipt thereof by any Loan Party or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan or correspondence from the
PBGC indicating it is considering termination of any Plan.
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(h) Actuarial Reports. Promptly upon receipt thereof by any Loan Party
or any ERISA Affiliate, a copy of the annual actuarial valuation report for each
Plan the funded current liability percentage (as defined in Section 302(d)(8)(B)
of ERISA) of which is less than 75% or the unfunded current liability (as
defined in Section 302(d)(8)(A) of ERISA) of which exceeds $2,000,000.
(i) Plan Annual Reports. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within thirty (30) days after
the filing thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with respect to
each Plan.
(j) Annual Plan Summaries. As soon as available and in any event within
one hundred and five (105) days after the end of each Fiscal Year, an annual
summary of actuarial valuation and other information with respect to each Plan
in form, substance and detail reasonably satisfactory to the Administrative
Agent.
(k) Multiemployer Plan Notices. Promptly and in any event within five
(5) Business Days after receipt thereof by any Loan Party or any ERISA Affiliate
from the sponsor of a Multiemployer Plan, copies of each notice concerning, or
other correspondence with respect to, (i) the imposition of Withdrawal Liability
by any such Multiemployer Plan, (ii) the reorganization or termination, within
the meaning of Title IV of ERISA, of any such Multiemployer Plan or (iii) the
amount of liability incurred, or that may be incurred, by such Loan Party or any
ERISA Affiliate in connection with any event described in clause (i) or (ii).
(l) Litigation. Promptly after the commencement thereof, or any
material development therein, notice of all material actions, suits,
investigations, litigation and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, Federal,
state, local or foreign, affecting any Loan Party or any of its Subsidiaries.
Without limiting the generality of the foregoing, promptly after the occurrence
thereof, notice of any material adverse change in the status, or the financial
effect on any Loan Party or any of its Subsidiaries, of any litigation disclosed
on Schedule 4.01(i).
(m) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any Loan
Party or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the Securities and Exchange
Commission or any other governmental authority, or with any national securities
exchange.
(n) Creditor Reports. Promptly after the furnishing thereof, copies of
any statement or report furnished to any other holder of the securities of any
Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture,
loan or credit agreement or similar agreement or instrument and not otherwise
required to be furnished to the Lender Parties pursuant to any other clause of
this Section 5.03.
(o) Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of its
Subsidiaries under or pursuant to any Acquisition Document, Senior Subordinated
Note Document or Material Contract or
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indenture, loan or credit agreement or similar agreement or instrument regarding
or related to any breach or default by any party thereto or any event that could
materially impair the value of the interests or the rights of any Loan Party or
any of its Subsidiaries or otherwise have a Material Adverse Effect and copies
of any amendment, modification or waiver of any provision of any Acquisition
Document, Senior Subordinated Note Document, Material Contract or loan or credit
agreement or similar agreement or indenture and, from time to time upon request
by the Administrative Agent, such information and reports regarding the
foregoing as the Administrative Agent may reasonably request.
(p) Revenue Agent Reports. Within ten (10) days after receipt, copies
of all Revenue Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the Internal Revenue Service, that propose, determine or
otherwise set forth any adjustments to the Federal income tax liability of the
affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Borrower is a member aggregating $250,000 or more.
(q) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could reasonably be expected to
have a Material Adverse Effect.
(r) Real Property. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within thirty (30) days after
any such request, a report supplementing Schedules 4.01(bb) and 4.01(cc) hereto,
including an identification of all real and leased property disposed of by the
Borrower or any of its Subsidiaries during such Fiscal Year, a list and
description (including the street address, county or other relevant
jurisdiction, state, record owner and, in the case of leases of property,
lessor, lessee, expiration date and annual rental cost thereof) of all real
property acquired or leased during such Fiscal Year and a description of such
other changes in the information included in such Schedules as may be necessary
for such Schedules to remain accurate and complete in all respects.
(s) Insurance. As soon as available and in any event within thirty (30)
days after the end of each Fiscal Year, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for each Loan Party and
its Subsidiaries and containing such additional information as the
Administrative Agent may reasonably request.
(t) Management Letters. As soon as available and in any event within
five (5) Business Days after the receipt thereof, copies of any "management
letter" or similar letter received by the Borrower or its Board of Directors (or
any Committee thereof) from its independent public accountants.
(u) Other Information. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries or the Collateral as the
Administrative Agent or any Lender Party (through the Administrative Agent) may
from time to time reasonably request.
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SECTION 5.04. Financial Covenants. So long as any Advance shall remain
unpaid, any Letter of Credit or Alternative Currency Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will:
(a) Funded Debt to EBITDA Ratio. Maintain as of the end of each fiscal
quarter of the Borrower a ratio of (i) Consolidated Funded Debt to (ii) EBITDA
for the most recently completed four fiscal quarters of the Borrower of not more
than the ratio set forth below:
Four Fiscal Quarters ending on: Ratio
June 30, 1998 4.75 to 1.0
September 30, 1998 4.75 to 1.0
December 31, 1998 4.75 to 1.0
March 31, 1999 3.75 to 1.0
June 30, 1999 3.75 to 1.0
September 30, 1999 3.75 to 1.0
December 31, 1999 3.75 to 1.0
March 31, 2000 3.25 to 1.0
June 30, 2000 3.25 to 1.0
September 30, 2000 3.25 to 1.0
December 31, 2000 3.25 to 1.0
March 31, 2001 and each fiscal
quarter end thereafter 3.00 to 1.0
(b) Interest Coverage Ratio. Maintain as of the end of each fiscal
quarter of the Borrower a ratio of (i) Consolidated EBITDA for the most recently
completed four fiscal quarters of the Borrower to (ii) Interest Expense of the
Borrower and its Subsidiaries for such period of not less than 3.0 to 1.0.
(c) Fixed Charge Coverage Ratio. Maintain as of the end of each fiscal
quarter of the Borrower a ratio of (i) Consolidated EBITDA for the most recently
completed four fiscal quarters of the Borrower, less Capital Expenditures made
during such period, less the aggregate amount of federal, state, local and
foreign taxes paid by the Borrower and its Subsidiaries during such period, less
cash dividends paid by the Borrower to the holders of its common stock during
such period, to the (ii) sum of (x) cash interest paid or payable by the
Borrower and its Subsidiaries on all Debt, including, without limitation, the
Senior Subordinated Notes, during such period, plus (y) cash rentals paid or
payable under Capitalized Leases during such period, plus (z) principal amounts
of all Funded Debt paid or payable by the Borrower and its Subsidiaries during
such period, of not less than the ratio set forth below for such period:
Four Fiscal Quarters ending on: Ratio
- ------------------------------ -----
June 30, 1998 1.40 to 1.0
September 30, 1998 1.40 to 1.0
December 31, 1998 1.40 to 1.0
March 31, 1999 and each fiscal
quarter ending thereafter 1.50 to 1.0
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(d) Minimum Net Worth. Maintain, as of the last day of each fiscal
quarter, an excess of Consolidated total assets over Consolidated total
liabilities of the Borrower and its Subsidiaries of not less than (i) the
greater of (A) 85% of the excess of Consolidated total assets over Consolidated
total liabilities of the Borrower and its Subsidiaries at March 31, 1998 and (B)
$155,000,000, plus (ii) 75% of Consolidated positive net income (and excluding
100% of Consolidated net losses) of the Borrower and its Subsidiaries since
March 31, 1998 to and including each date of determination computed on a
cumulative basis for said entire period.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default. If any of the following ("Events of
Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the Borrower shall fail to
pay any interest on any Advance, or any Loan Party shall fail to make any other
payment under any Loan Document, in each case under this clause (ii) within two
(2) Business Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made or confirmed; or
(c) the Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 2.14, 5.01(d), (e), (f), (g), (l), (m) or (n),
5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for thirty (30) days after the earlier
of the date on which (i) a Responsible Officer of any Loan Party becomes aware
of such failure or (ii) written notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt, including, without limitation, the Senior Subordinated Notes, that is
outstanding in a principal or notional amount of at least $1,000,000 either
individually or in the aggregate (but excluding Debt outstanding hereunder) of
such Loan Party or such Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or any event shall occur or condition shall
exist under any agreement or instrument relating to any such Debt, in each case
if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt or otherwise to cause, or to permit
the holder thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed (other than
by a regularly scheduled required prepayment or redemption), purchased, called
or defeased, or an offer to prepay, redeem,
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purchase, call or defease such Debt shall be required to be made, in each case
prior to the stated maturity thereof, including, without limitation, as a result
of an asset sale, a change of control or any other event or occurrence; or
(f) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it)
that is being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of thirty (30) days or any of
the actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur, or any Loan Party or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in this
subsection (f); or
(g) any judgment or order for the payment of money in excess of
$1,000,000 (other than such a judgment or order which is fully covered by
insurance for which the appropriate insurer has acknowledged responsibility in
writing) shall be rendered against any Loan Party or any of its Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be a period of seven (7)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect; or
(i) any material provision of any Loan Document after delivery thereof
shall for any reason cease to be valid and binding on or enforceable against any
Loan Party which is party to it, or any such Loan Party shall so state in
writing; or
(j) any Collateral Document after delivery thereof shall for any reason
cease to or otherwise not create a valid and perfected first and only priority
lien on and security interest in the Collateral purported to be covered thereby;
or
(k) (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3, of the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing 15% or more of the
combined voting power of all Voting Stock of the Borrower; (ii) the individuals
who at the date hereof were Directors of the Borrower (together with any other
Director whose election to the Board of Directors of the Borrower (or whose
nomination by the Board of Directors for election by the stockholders of the
Borrower) was approved by a
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vote of at least a majority of the Directors then in office who either were
directors at the date hereof or whose election was previously so approved) shall
cease for any reason to constitute a majority of the Board of Directors of the
Borrower; or (iii) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of
the power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Borrower; or
(1) any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of the last such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Affiliates related to such ERISA
Events) exceeds $2,000,000; or
(m) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $500,000 or requires payments exceeding $200,000 per
annum; or
(n) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $200,000; or
(o) there shall occur in the reasonable judgment of the Required
Lenders any Material Adverse Change; or
(p) the aggregate amount of the Revolving Credit Advances plus the
Assigned Dollar Value of Alternative Currency Revolving Credit Advances plus
Swing Line Advances plus Letter of Credit Advances plus the Assigned Dollar
Value of all Alternative Currency Letter of Credit Advances plus the aggregate
Available Amount of all Letters of Credit and Alternative Currency Letters of
Credit outstanding shall at any time exceed the Revolving Credit Facility, which
excess is not eliminated by the Borrower's immediate prepayment of then
outstanding Swing Line Advances, Revolving Credit Advances and Alternative
Currency Revolving Credit Advances in an amount at least equal to such excess;
or
(q) the aggregate amount of the Assigned Dollar Value of Alternative
Currency Revolving Credit Advances plus the Assigned Dollar Value of all
Alternative Currency Letter of Credit Advances plus the aggregate Available
Amount of all Alternative Currency Letters of Credit outstanding shall at any
time exceed the Alternative Currency Revolving Credit Facility, which excess is
not eliminated by the Borrower's immediate prepayment of then outstanding
Alternative Currency Revolving Credit Advances in an amount at least equal to
such excess; or
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(r) for as long as any Senior Subordinated Notes, or guaranties
executed in connection therewith, remain outstanding, all or any part of the
principal or interest in respect of the Advances, or other Obligations under
this Agreement or any other Loan Document, including, without limitation, (i)
Obligations to pay charges, expenses, fees, attorneys' fees and disbursements,
indemnities, Letter of Credit and Alternative Currency Letter of Credit
commissions and other amounts payable by the Borrower and/or any of the other
Loan Parties under this Agreement or any other Loan Document, (ii) all
liabilities and other Obligations arising out of, based upon or relating to
Existing Letters of Credit or any other Letters of Credit or any Alternative
Currency Letters of Credit, and (iii) Obligations to reimburse any amount in
respect of any of the foregoing that any Lender Party, in its sole discretion,
may elect to pay or advance on behalf of any Loan Party, shall cease to
constitute Senior Debt (as defined in the Senior Subordinated Note Indenture)
and Designated Senior Debt (as defined in the Senior Subordinated Note
Indenture). Or, as such, any of the Obligations (or the Administrative Agent or
Lenders) shall cease to be entitled to the benefit of any of the subordination
and other provisions which are available in respect of Senior Debt and
Designated Senior Debt (and to the holders thereof) or any of such subordination
or other provisions shall cease to be in full force and effect and enforceable
in accordance with its terms;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each appropriate Lender (other than the Commitment in
respect of Letter of Credit Advances or Alternative Currency Letter of Credit
Advances by the Issuing Bank or a Revolving Credit Lender pursuant to Section
2.03(c) or Section 2.03(d), as appropriate, and Swing Line Advances by a
Revolving Credit Lender pursuant to Section 2.02(c)) and of the Issuing Bank to
issue Letters of Credit and Alternative Currency Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, (A) by notice to the
Borrower, declare the Notes, all interest thereon and all other amounts payable
under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Notes, all such interest and all such other amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower and (B) by notice to each party required under the terms of any
agreement in support of which a Standby Letter of Credit (whether a Letter of
Credit or an Alternative Currency Letter of Credit) is issued, request that all
Obligations under such agreement be declared to be due and payable; provided,
however, that in the event of an actual or deemed entry of an order for relief
with respect to any Loan Party or any of its Subsidiaries under the Federal
Bankruptcy Code, (x) the obligation of each Lender to make Advances (other than
Letter of Credit Advances or Alternative Currency Letter of Credit Advances by
the Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) or
Section 2.03(d), as appropriate, and Swing Line Advances by a Revolving Credit
Lender pursuant to Section 2.02(c)) and of the Issuing Bank to issue Letters of
Credit and Alternative Currency Letters of Credit shall automatically be
terminated and (y) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit and
Alternative Currency Letters of Credit upon Default. If any Event of Default
shall have occurred and be continuing, the Administrative Agent may, or shall at
the request of the Required Lenders, irrespective of
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whether it is taking any of the actions described in Section 6.01 or otherwise,
make demand upon the Borrower to, and forthwith upon such demand the Borrower
will, pay to the Administrative Agent on behalf of the Lender Parties in same
day funds at the Administrative Agent's office designated in such demand, for
deposit in the L/C Cash Collateral Account, an amount equal to the aggregate
Available Amount of all Letters of Credit and Alternative Currency Letters of
Credit then outstanding. If at any time the Administrative Agent determines that
any funds held in the L/C Cash Collateral Account are subject to any right or
claim of any Person other than the Administrative Agent and the Lender Parties
or that the total amount of such funds is less than the aggregate Available
Amount of all Letters of Credit and Alternative Currency Letters of Credit, the
Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party (in its
capacities as a Lender, the Issuing Bank, the Swing Line Bank and any Hedge
Bank) hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action that exposes the Administrative Agent to personal liability or that
is contrary to this Agreement, any other Loan Document or applicable law. The
Administrative Agent agrees to give to each Lender Party prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07; (b) may consult
with legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender Party and
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shall not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Fleet and Affiliates. With respect to its Commitments,
the Advances made by it and the Notes issued to it, Fleet shall have the same
rights and powers under the Loan Documents as any other Lender Party and may
exercise the same as though it were not the Administrative Agent; and the term
"Lender Party" or "Lender Parties" shall, unless otherwise expressly indicated,
include Fleet in its individual capacity. Fleet and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if Fleet
were not the Administrative Agent and without any duty to account therefor to
the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party and based on the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender Party also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees
to indemnify the Administrative Agent (to the extent not promptly reimbursed by
the Borrower) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Administrative Agent in any way relating to or arising out of any of
the Loan Documents or any action taken or omitted by the Administrative Agent
under any of the Loan Documents; provided, however, that no Lender Party shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender Party agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 8.04, to the
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extent that the Administrative Agent is not promptly reimbursed for such costs
and expenses by the Borrower.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Issuing Bank under any of the Loan Documents; provided, however,
that no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Issuing Bank's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse the Issuing Bank promptly upon demand for its ratable share
of any costs and expenses (including, without limitation, fees and expenses of
counsel) payable by the Borrower under Section 8.04, to the extent that the
Issuing Bank is not promptly reimbursed for such costs and expenses by the
Borrower.
(c) For purposes of Sections 7.05(a) and 7.05(b), the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (b) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit and Alternative Currency Letters of Credit outstanding at such time and
(c) their respective Unused Revolving Credit Commitments at such time; provided,
that the aggregate principal amount of Swing Line Advances owing to the Swing
Line Bank and Letter of Credit Advances and Alternative Currency Letter of
Credit Advances owing to the Issuing Bank shall be considered to be owed to the
Revolving Credit Lenders ratably in accordance with their respective Revolving
Credit Commitments. In the event that any Defaulted Advance shall be owing by
any Defaulting Lender at any time, such Lender Party's Commitment with respect
to the Facility under which such Defaulted Advance was required to have been
made shall be considered to be unused for purposes of this Section 7.05 to the
extent of the amount of such Defaulted Advance. The failure of any Lender Party
to reimburse the Administrative Agent or the Issuing Bank, as the case may be,
promptly upon demand for its ratable share of any amount required to be paid by
the Lender Parties to the Administrative Agent or the Issuing Bank, as the case
may be, as provided herein shall not relieve any other Lender Party of its
obligation hereunder to reimburse the Administrative Agent or the Issuing Bank,
as the case may be, for its ratable share of such amount, but no Lender Party
shall be responsible for the failure of any other Lender Party to reimburse the
Administrative Agent or the Issuing Bank, as the case may be, for such other
Lender Party's ratable share of such amount. Without prejudice to the survival
of any other agreements of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05 shall survive
the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.
SECTION 7.06. Successor Administrative Agents. The Administrative Agent
may resign as to any or all of the Facilities at any time by giving written
notice thereof to the Lender Parties and the Borrower and may be removed as to
all of the Facilities at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders
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shall have the right to appoint a successor Administrative Agent as to such of
the Facilities as to which the Administrative Agent has resigned or been
removed. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within thirty
(30) days after the retiring Administrative Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Lender
Parties, appoint a successor Administrative Agent, which shall be a Lender which
is a commercial bank organized or licensed under the laws of the United States
or of any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent as to all of the Facilities and
upon the execution and filing or recording of such financing statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations under this Agreement and the
other Loan Documents. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent as to less than all of the
Facilities and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent as to such Facilities, other than with respect
to funds transfers and other similar aspects of the administration of Borrowings
under such Facilities, issuances of Letters of Credit (notwithstanding any
resignation as Administrative Agent with respect to the Letter of Credit
Facility) and payments by the Borrower in respect of such Facilities, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement as to such Facilities, other than as aforesaid.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent as to all of the Facilities, the provisions of this Article
VII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent as to any of the Facilities under this
Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or
consent shall, unless in writing and signed by all of the Lenders (other than
any Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (i) waive any of the conditions specified in Section 3.01
or, in the case of the Initial Extension of Credit, Section 3.02; (ii) change
the
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number of Lenders or the percentage of (x) the Commitments, (y) the aggregate
unpaid principal amount of the Advances or (z) the aggregate Available Amount of
outstanding Letters of Credit or Alternative Currency Letters of Credit that, in
each case, shall be required for the Lenders or any of them to take any action
hereunder; (iii) release any material portion of the Collateral in any
transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on any material portion of the
Collateral in any transaction or series of related transactions to secure any
liabilities or obligations other than Obligations owing to the Secured Parties
under the Loan Documents; (iv) release any of the Guarantors from their
Guaranty, other than the release of the Guaranty of Mechanical Products and/or
Minitec (and the release from any Collateral Document executed and delivered by
Mechanical Products and/or Minitec of Mechanical Products and/or Minitec, as
appropriate) upon the sale of all of the capital stock, or all or substantially
all of the assets, of Mechanical Products and/or Minitec, as applicable, in
accordance with the terms and conditions of this Agreement; (v) amend this
Section 8.01; or (vi) limit the liability of any Loan Party under any of the
Loan Documents and (b) no amendment, waiver or consent shall, unless in writing
and signed by the Required Lenders and each Lender affected thereby, (i)
increase the Commitments of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone any date fixed for any payment of principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (iv) waive or change the order or method of application of any
prepayment set forth in Section 2.06 in any manner that materially affects such
Lender; provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Required Alternative Currency Lenders, in addition to
the Lenders required above to take such action, affect the rights or obligations
of the Alternative Currency Revolving Credit Lenders under this Agreement or any
other Loan Document; provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Bank or the Issuing Bank,
as the case may be, in addition to the Lenders required above to take such
action, affect the rights or obligations of the Swing Line Bank or the Issuing
Bank, as the case may be, under this Agreement or any other Loan Document; and
provided, further, that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent, in addition to the Lenders required
above to take such action, affect the rights or duties of the Administrative
Agent under this Agreement or any other Loan Document.
SECTION 8.02. Notices Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
(i) if to the Borrower:
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228
Attention: Robert L. Montgomery, Jr.
Executive Vice President
Telephone No.: (716) 689-5405
Facsimile No.: (716) 689-5598
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with a copy to:
Phillips, Lytle, Hitchcock, Blaine & Huber
3400 Marine Midland Center
Buffalo, New York 14203
Attention: Frederick G. Attea, Esq.
Telephone No.: (716) 847-7010
Facsimile No.: (716) 852-6100
(ii) if to the Administrative Agent:
Fleet National Bank
10 Fountain Plaza
Buffalo, New York 14202
Attention: Corporate Banking Group
Telephone No.: (716) 847-7332
Facsimile No.: (716) 847-4491
with a copy to:
Winston & Strawn
200 Park Avenue
New York, New York 10166
Attention: William D. Brewer, Esq.
Telephone No.: (212) 294-6793
Facsimile No.: (212) 294-4700
(iii) if to any Initial Lender or the Initial Issuing Bank, at
its Domestic Lending Office specified opposite its name on Schedule I
attached hereto.
(iv) if to any other Lender Party, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it
became a Lender Party;
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when mailed by certified mail, return receipt
requested, telegraphed, telecopied or telexed, be effective three (3) days after
mailing, upon delivery to the telegraph company, upon transmission by telecopier
or upon confirmation by telex answerback, respectively, except that notices and
communications to the Administrative Agent pursuant to Article II, III or VII
shall not be effective until received by the Administrative Agent. Delivery by
telecopier of an executed counterpart of this Agreement, the Notes or any other
Loan Document or of any Exhibit hereto or thereto or of any amendment or waiver
of any provision thereof shall be as effective as delivery of a manually
executed counterpart thereof.
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SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender
Party or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law or in equity.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without limitation,
(A) all due diligence, collateral review, syndication (including printing,
distribution and bank meetings), transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses, and (B) the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto, with respect to advising the
Administrative Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests under the Loan Documents, with
respect to negotiations with any Loan Party or with other creditors of any Loan
Party or any of its Subsidiaries arising out of any Default or any events or
circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of the
Administrative Agent and the Lender Parties in connection with the enforcement
of the Loan Documents, whether in any action, suit or litigation or any
bankruptcy, insolvency or other similar proceeding affecting creditors' rights
generally or otherwise (including, without limitation, the fees and expenses of
counsel for the Administrative Agent and each Lender Party with respect
thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender Party and each of their respective Affiliates
and their respective officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) the Acquisition or any related transaction of Borrower or
any of its Subsidiaries or other Affiliates and any of the other transactions
contemplated by the Acquisition Documents, (ii) the offering of the Senior
Subordinated Notes or any related transaction of Borrower or any of its
Subsidiaries or other Affiliates and any of the other transactions contemplated
by the Senior Subordinated Note Documents, (iii) any acquisition or proposed
acquisition or similar business combination or proposed business combination by
the Borrower or any of its Subsidiaries or other Affiliates of all or any
portion of the shares of capital stock or substantially all of the property and
assets of any other Person, (iv) the Facilities, the actual or proposed use of
the proceeds of the Advances or the Letters of Credit by the Borrower or any of
its Subsidiaries or other Affiliates and any of the other transactions
contemplated by the Loan Documents, or (v) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, officers, employees,
stockholders or
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creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
The Borrower also agrees not to assert any claim against the Administrative
Agent, any Lender Party or any of their respective Affiliates, or any of their
respective officers, directors, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the Acquisition, the Senior Subordinated Notes
(including, without limitation, the offering thereof), the Facilities, the
actual or proposed use of the proceeds of the Advances or the Letters of Credit,
the Loan Documents, the Acquisition Documents, the Senior Subordinated Note
Documents or any of the transactions contemplated thereby, other than claims for
direct, as opposed to consequential, damages which shall have been determined in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Person's gross negligence or willful misconduct.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.09(b)(i) or 2.10(d),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, or by an Eligible Assignee to a Lender Party other than on the
last day of the Interest Period for such Advance upon an assignment of rights
and obligations under this Agreement pursuant to Section 8.07, the Borrower
shall, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds required by any Lender Party to fund or
maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Default and (b) the making of the request or the granting of
the consent specified by Section 6.01 to authorize the Administrative Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender Party and each of its respective Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final)
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at any time held and other indebtedness at any time owing by such Lender Party
or such Affiliate to or for the credit or the account of the Borrower or any of
its Subsidiaries against any and all of the Obligations of the Borrower now or
hereafter existing under this Agreement and the Note or Notes (if any) held by
such Lender Party, irrespective of whether such Lender Party shall have made any
demand under this Agreement or such Note or Notes and although such obligations
may be unmatured. Each Lender Party agrees promptly to notify the Borrower and
Administrative Agent after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender Party and its respective
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender Party
and its respective Affiliates may have at law, in equity or otherwise.
SECTION 8.06. Binding Effect This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have been notified by each Initial Lender
and the Initial Issuing Bank that each such Initial Lender and the Initial
Issuing Bank has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and each Lender Party and
their respective successors and assigns, except that the Borrower shall not have
the right to assign any of its rights hereunder or any interest herein without
the prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of one or more the Facilities, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) no
such assignments shall be permitted without the prior consent of the
Administrative Agent (which may be withheld for any reason) until the earlier of
(A) the Administrative Agent's having notified the Lender Parties that
syndication of the Commitments hereunder has been completed and (B) ninety (90)
days after the Closing Date, (v) no such assignment shall be permitted if,
immediately after giving effect thereto, the Borrower would be required to make
payments to or on behalf of the assignee Lender Party pursuant to Section
2.10(a) or (b) and the assignor Lender Party was not, at the time of such
assignment, entitled to receive any payment pursuant to Section 2.10(a) or (b),
(vi) no such assignment shall be permitted if, immediately after giving effect
thereto, either (1) the Assigned Dollar Value of the Alternative Currency
Revolving Credit Sub-Commitment, if any, of the assignor Lender shall be greater
than the Revolving Credit Commitment of such Lender or (2) the Assigned Dollar
Value of the Alternative Currency Revolving Credit Sub-Commitment, if any, of
the assignee Lender shall be greater than the Revolving Credit Commitment of
such Lender, and (vii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and
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Acceptance, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,000.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (y) the Lender or Issuing Bank assignor thereun-
der shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and the Commitment under each Facility of, and principal
amount of the Advances owing under each Facility to, each Lender Party from time
to time (the "Register"). The entries in the Register shall be conclusive and
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binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment and the appropriate processing and reconciliation fee, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit A hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. In the case of any
assignment by a Lender, within five (5) Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a new Note to
the order of such Eligible Assignee in an amount equal to the Commitment assumed
by it under a Facility pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder under such Facility, a new
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit B or C
hereto, as the case may be .
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment and/or Alternative Currency Letter of Credit Commitment at any time;
provided, however, that (i) each such assignment shall be to an Eligible
Assignee and (ii) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with a processing and recordation fee of
$3,000.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes, if any, held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment, waiver or other modification of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Loan Party therefrom, except to the extent that such amendment, waiver,
modification or consent would reduce the principal of, or interest on, the Notes
or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or
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other amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be as effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 8.09. No Liability of the Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit or Alternative Currency Letter of Credit with respect to its
use of such Letter of Credit or Alternative Currency Letter of Credit, as the
case may be. Neither the Issuing Bank nor any of its officers, directors,
employees or agents shall be liable or responsible for: (a) the use that may be
made of any Letter of Credit or Alternative Currency Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit or an Alternative Currency Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of Credit or
Alternative Currency Letter of Credit, as the case may be; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit or Alternative Currency Letter of Credit, except that the Borrower
shall have a claim against the Issuing Bank, and the Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit or an Alternative Currency Letter
of Credit comply with the terms of the Letter of Credit or Alternative Currency
Letter of Credit, as the case may be, or (ii) the Issuing Bank's willful failure
to make lawful payment under a Letter of Credit or Alternative Currency Letter
of Credit after the presentation to it of a draft and certificates strictly
complying with the terms and conditions of the Letter of Credit or Alternative
Currency Letter of Credit, as the case may be. In furtherance and not in
limitation of the foregoing, the
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Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.10. Confidentiality. Neither the Administrative Agent nor any
Lender Party shall disclose any Confidential Information to any Person without
the consent of the Borrower, other than (a) to the Administrative Agent's or
such Lender Party's Affiliates and their officers, directors, employees, agents
and advisors and to actual or prospective Eligible Assignees and participants,
and then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process, (c) as required by the National Association of
Insurance Commissioners and (d) as requested or required by any state, federal
or foreign authority or examiner regulating banks or banking or insurance
companies.
SECTION 8.11. JURISDICTION, ETC. (a) EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE
UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH NEW YORK STATE
COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL
AFFECT ANY RIGHT THAT ANY LENDER PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE
COURTS OF ANY JURISDICTION.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
SECTION 8.12. GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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SECTION 8.13. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE LOAN
PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
COLUMBUS MCKINNON CORPORATION
By___________________________________
Title:_________________________________
FLEET NATIONAL BANK, AS
ADMINISTRATIVE AGENT
By:__________________________________
Title:_________________________________
FLEET NATIONAL BANK,
AS INITIAL ISSUING BANK
By:_________________________________
Title:________________________________
FLEET NATIONAL BANK,
AS SWING LINE BANK
By:_________________________________
Title:________________________________
<PAGE>
INITIAL LENDERS
FLEET NATIONAL BANK
By:_________________________________
Title:________________________________
<PAGE>
INITIAL LENDERS
FIRST UNION NATIONAL BANK
By:_________________________________
Title:________________________________
<PAGE>
INITIAL LENDERS
MARINE MIDLAND BANK, AS A CO-AGENT
AND LENDER
By:_________________________________
Title:________________________________
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INITIAL LENDERS
BANKERS TRUST COMPANY
By:_________________________________
Title:________________________________
108
<PAGE>
INITIAL LENDERS
MANUFACTURERS AND TRADERS
TRUST COMPANY, AS A CO-AGENT AND LENDER
By:_________________________________
Title:________________________________
109
<PAGE>
INITIAL LENDERS
MELLON BANK, N.A.
By:_________________________________
Title:________________________________
110
<PAGE>
INITIAL LENDERS
THE BANK OF NOVA SCOTIA, AS A
CO-AGENT AND LENDER
By:_________________________________
Title:________________________________
111
<PAGE>
INITIAL LENDERS
KEYBANK NATIONAL ASSOCIATION
By:_________________________________
Title:________________________________
112
<PAGE>
INITIAL LENDERS
ABN-AMRO BANK N.V. NEW YORK
BRANCH, AS A CO-AGENT AND LENDER
By:_________________________________
Title:________________________________
By:__________________________________
Title:_________________________________
113
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INITIAL LENDERS
TORONTO DOMINION (TEXAS), INC.
By:_________________________________
Title:________________________________
114
<PAGE>
INITIAL LENDERS
NATIONAL CITY BANK OF
PENNSYLVANIA
By:_________________________________
Title:________________________________
115
<PAGE>
INITIAL LENDERS
COMERICA BANK
By:_________________________________
Title:________________________________
116
<PAGE>
INITIAL LENDERS
BANK OF NEW YORK
By:_________________________________
Title:________________________________
117
<PAGE>
INITIAL LENDERS
NATIONAL BANK OF CANADA
By:_________________________________
Title:________________________________
By:_________________________________
Title:________________________________
118
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-3212) pertaining to the Columbus McKinnon Corporation 1995 Incentive
Stock Option Plan, the Columbus McKinnon Corporation Non-Qualified Stock Option
Plan, the Columbus McKinnon Corporation Restricted Stock Plan, and the Columbus
McKinnon Corporation Employee Stock Ownership Plan Restatement Effective April
1, 1989 of Columbus Mckinnon Corporation of our report dated November 21, 1997
(except for Note 11, as to which the date is February 13, 1998), with respect to
the consolidated financial statements of LICO, Inc. and Subsidiaries included in
this Current Report (Form 8-K) dated April 9, 1998.
/s/Ernst & Young LLP
Kansas City, Missouri
April 9, 1998
NEWS RELEASE
CONTACT:
Robert L. Montgomery, Jr.
Executive Vice President and
Chief Financial officer
Columbus McKinnon Corporation
716-689-5405
COLUMBUS MCKINNON CORPORATION COMPLETES
DEBT OFFERING AND ACQUISITION OF LICO, INC.,
A LEADING MATERIAL HANDLING SYSTEMS PROVIDER
AMHERST, N.Y., March 31, 1998 -- Columbus McKinnon Corporation (Nasdaq-NNM:
CMCO) today announced that it has completed its previously announced purchase of
all of the outstanding stock of LICO, Inc. for approximately $155 million in
cash.
Concurrently, it has completed the sale of $200 million aggregate principal
amount of its 8 1/2% Senior Subordinated Notes due 2008 at 99.734% of the face
amount. The Notes have been issued and sold in a private placement transaction.
The Notes have not been registered under the Securities Act of 1933, as amended,
(the "Act"), and may not be offered or sold in the United States or to any U.S.
person absent registration under the Act or an applicable exemption from the
registration rights thereof.
Additionally, the Company put in place a new $300 million senior bank
revolving credit facility. The proceeds from the bank facility and the Notes
were used to fund the acquisition of LICO, to repay existing bank debt, and for
general corporate purposes.
CM's Chief Financial Officer, Robert L. Montgomery, commented on CM's
financing transactions, "In conjunction with the LICO acquisition, we have
restructured our debt financing to provide CM with greater flexibility and more
favorable terms. In doing so, we have reduced our existing borrowing costs and
gained the ability to respond swiftly to other business opportunities that may
arise in the future."
<PAGE>
2
In commenting on the LICO acquisition, CM President and Chief Operating
Officer, Timothy T. Tevens, said, "The completion of the LICO acquisition firmly
establishes CM as an important provider of integrated material handling
solutions. Over the last four years, we have successfully completed and
integrated nine acquisitions that have solidified our position as a market
leader in the material handling industry. We anticipate that LICO will be
immediately accretive to earnings, while further enhancing our strong cash flow
generating ability."
LICO, through its main operating subsidiary, Automatic Systems, Inc.
("ASI"), is a leading designer, manufacturer, and installer of technically
advanced material handling systems, including overhead and floor-mounted
conveyors, electrified monorail systems, robotic indexing systems, and automatic
body transfer systems primarily for the automotive industry. Based in Kansas
City, Missouri, ASI provides custom engineered systems by functioning either as
a turnkey contractor or as a supplier working in conjunction with the customer's
general contractor.
CM is a broad-line designer, manufacturer, and supplier of
material handling products and integrated material handling systems widely used
by industrial end users and consumers. Its chain and wire rope hoists, alloy and
high-strength carbon steel chain, forged accessories and other products are sold
in a large number of domestic and international markets.
Supplemental information about Columbus McKinnon and the LICO
acquisition is available on CM's Web site at: HTTP://WWW.CMWORKS.COM/
This press release shall not constitute an offer to sell or the solicitation of
any offer to buy nor shall there be any sale of the Notes.
###
