<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 30, 1998
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
ANTHONY CRANE RENTAL HOLDINGS, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PENNSYLVANIA 7353 25-1814367
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
1165 CAMP HOLLOW ROAD
WEST MIFFLIN, PENNSYLVANIA 15122
TELEPHONE: (412) 469-3700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
RAY G. ANTHONY
1165 CAMP HOLLOW ROAD
WEST MIFFLIN, PENNSYLVANIA 15122
TELEPHONE: (412) 469-3700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
LANCE C. BALK
KIRKLAND & ELLIS
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022-4675
TELEPHONE: (212) 446-4800
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
13 3/8% Senior Discount
Debentures due 2009...... $48,000,000 53.5% $25,667,404 $7,572
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f)(2) based upon the book value of the securities
as of September 28, 1998.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
(continued from previous page)
ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 7353 25-1817793
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
<PAGE>
INFORMATION CONTAINED HEREIN SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
PRELIMINARY PROSPECTUS
ANTHONY CRANE RENTAL HOLDINGS, L.P.
LOGO ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
OFFER TO EXCHANGE THEIR SERIES B 13 3/8% SENIOR DISCOUNT DEBENTURES DUE
2009 FOR ANY AND ALL OF THEIR OUTSTANDING SERIES A 13 3/8% SENIOR DISCOUNT
DEBENTURES DUE 2009
----------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1998,
UNLESS EXTENDED.
----------
Anthony Crane Rental Holdings, L.P., a Pennsylvania limited partnership
("Holdings"), and Anthony Crane Holdings Capital Corporation, a Delaware
Corporation and wholly owned subsidiary of Holdings ("AC Holdings Corp." and,
together with Holdings, the "Issuers"), hereby offer (the "Exchange Offer"),
upon the terms and conditions set forth in this Prospectus (the "Prospectus")
and the accompanying Letter of Transmittal (the "Letter of Transmittal"), to
exchange $1,000 principal amount of its Series B 13 3/8% Senior Discount
Debentures due 2009 (the "Exchange Debentures"), which will have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement of which this Prospectus is a part, for
each $1,000 principal amount of its outstanding Series A 13 3/8% Senior
Discount Debentures due 2009 (the "Debentures"), of which $25,667,404 principal
amount is outstanding. The form and terms of the Exchange Debentures are the
same as the form and term of the Debentures (which they replace) except that
the Exchange Debentures will have been registered under the Securities Act and,
therefore, will not bear legends restricting their transfer and will not
contain certain provisions relating to an increase in the interest rate which
were included in the terms of the Debentures in certain circumstances relating
to the timing of the Exchange Offer. The Exchange Debentures will evidence the
same debt as the Debentures (which they replace) and will be issued under and
be entitled to the benefits of the Indenture, dated July 22, 1998, among the
Issuers and State Street Bank and Trust Company, as trustee (the "Indenture"),
governing the Debentures. See "The Exchange Offer" and "Description of Exchange
Debentures."
The Exchange Debentures will be general unsecured obligations of the Issuers,
will rank pari passu in right of payment to all existing and future senior
unsecured indebtedness of the Issuers and will rank senior in right of payment
to all existing and future subordinated indebtedness of the Issuers. The
Debentures, however, will be (i) effectively subordinated to all secured
obligations of the Issuers, to the extent of the assets securing such
obligations and (ii) structurally subordinated to all obligations of Holdings'
subsidiaries. As of June 30, 1998, on a pro forma basis, after giving effect to
the Transactions, the Debentures would have been effectively subordinated to
$330.9 million of obligations of Holdings' subsidiaries (including capital
lease obligations). The Indenture will permit additional borrowings under the
Senior Credit Facilities in the future. Neither Issuer has issued, and does not
have any current firm arrangements to issue, any indebtedness to which the
Exchange Debentures would rank senior or pari passu in right of payment. See
"Risk Factors--Holdings Company Structure; Effective Subordination."
The Issuers will accept for exchange any and all Debentures validly tendered
and not withdrawn prior to 5:00 p.m., New York City time, on , 1998, unless
extended by the Issuers in their sole discretion (the "Expiration Date").
Notwithstanding the foregoing, the Issuers will not extend the Expiration Date
beyond , 1998. Tenders of Debentures may be withdrawn at any time prior to
5:00 p.m. on the Expiration Date. The Exchange Offer is subject to certain
customary conditions. The Debentures were sold by the Issuers on July 22, 1998
(the "Debenture Offering") to the Initial Purchasers (as defined) in a
transaction not registered under the Securities Act in reliance upon an
exemption under the Securities Act. The Initial Purchasers subsequently placed
the Debentures with qualified institutional buyers in reliance upon Rule 144A
under the Securities Act and in offshore transactions pursuant to Regulation S
under the Securities Act. Accordingly, the Debentures may not be reoffered,
resold or otherwise transferred in the United States unless registered under
the Securities Act or unless an applicable exemption from the registration
requirements of the Securities Act is available. The Exchange Debentures are
being offered hereunder in order to satisfy the obligations of the Issuers
under the Registration Rights Agreement entered into by the Issuers in
connection with the offering of the Debentures. See "The Exchange Offer".
With respect to resales of Exchange Debentures, based on interpretations by
the staff of the Securities and Exchange Commission (the "Commission") set
forth in no-action letters issued to third parties, the Issuers believe the
Exchange Debentures issued pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by any holder thereof (other than any
such holder that is an "affiliate" of either Holdings or AC Holdings Corp.
within the meaning of Rule 405 under the Securities Act) without compliance
with the registration and prospectus delivery provisions of the Securities Act,
provided that such Exchange Debentures are acquired in the ordinary course of
such holder's business and such holder has no arrangement or understanding with
any person to participate in the distribution of such Exchange Debentures. See
"The Exchange Offer--Purpose and Effect of the Exchange Offer" and "The
Exchange Offer--Resales of the Exchange Debentures." Each broker-dealer (a
"Participating Broker-Dealer") that receives Exchange Debentures for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Debentures. The
Letter of Transmittal states that by so acknowledging and by delivering a
Prospectus, a participating Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with resales of Exchange Debentures
received in exchange for Debentures where such Debentures were acquired by such
Participating Broker-Dealer as a result of market-making activities or other
trading activities. The Issuers have agreed that, for a period of 180 days from
the consummation of the Exchange Offer, it will make this Prospectus available
to any Participating Broker-Dealer for use in connection with any such resale.
See "Plan of Distribution."
If any holder of Debentures is an affiliate of either Holdings or AC Holdings
Corp., is engaged in or intends to engage in or has any arrangement or
understanding with any person to participate in the distribution of the
Exchange Debentures to be acquired in the Exchange Offer, such holder (i)
cannot rely on the applicable interpretations of the Commission and (ii) must
comply with the registration requirements of the Securities Act in connection
with any resale transaction.
Holders of Debentures not tendered and accepted in the Exchange Offer will
continue to hold such Debentures and will be entitled to all the rights and
benefits and will be subject to the limitations applicable thereto under the
Indenture and with respect to transfer under the Securities Act. The Issuers
will pay all the expenses incurred by them incident to the Exchange Offer. See
"The Exchange Offer."
----------
SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DESCRIPTION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER THEIR DEBENTURES IN THE
EXCHANGE OFFER.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 1998.
<PAGE>
(Cover page continued)
The Issuers will not receive any proceeds from the Exchange Offer. The
Issuers have agreed to bear the expenses of the Exchange Offer. No underwriter
is being used in connection with the Exchange Offer.
There has not previously been any public market for the Debentures or the
Exchange Debentures. The Issuers do not intend to list the Exchange Debentures
on any securities exchange or to seek approval for quotation through any
automated quotation system. There can be no assurance that an active market
for the Exchange Debentures will develop. See "Risk Factors--Absence of a
Public Market." Moreover, to the extent that Debentures are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Debentures could be adversely affected.
Concurrent with the Debenture Offering, the Company (as defined) and AC
Capital Corp. (as defined) (together, the "Note Issuers"), sold (the "Initial
Note Offering," and together with the Debenture Offering, the "Initial
Offerings") $155.0 million in aggregate principal amount of their 10 3/8%
Senior Notes due 2008 (the "Senior Notes").
Concurrent with this Exchange Offer, the Note Issuers are offering to
exchange (the "Note Exchange Offer," and together with this Exchange Offer,
the "Exchange Offers") $1,000 principal amount at maturity of their Series B
10 3/8% Senior Notes due 2008 (the "Exchange Notes") registered under the
Securities Act pursuant to a Registration Statement, for each $1,000 principal
amount at maturity of their outstanding Notes, of which $155.0 million
aggregate principal amount at maturity is outstanding as of the date hereof.
The Senior Notes and the Exchange Notes are sometimes referred to herein
collectively as the "Senior Notes." See "The Transactions" and "Description of
Certain Indebtedness--Senior Notes."
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE ISSUERS ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF DEBENTURES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE ISSUERS.
UNTIL , 1998 (90 DAYS AFTER COMMENCEMENT OF THE EXCHANGE OFFER), ALL
DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE DEBENTURES, WHETHER OR NOT
PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
The Exchange Debentures will be available initially only in book-entry form
and the Issuers expect that the Exchange Debentures issued pursuant to the
Exchange Offer will be issued in the form of a Global Note (as defined), which
will be deposited with, or on behalf of, The Depository Trust Company ("DTC")
and registered in its name or in the name of Cede & Co., its nominee.
Beneficial interests in the Global Note representing the Exchange Debentures
will be shown on, and transfers thereof will be effected through, records
maintained by DTC and its participants. After the initial issuance of the
Global Note, Exchange Debentures in certificated form will be issued in
exchange for the Global Note only under limited circumstances as set forth in
the Indenture. See "Description of the Exchange Debentures--Book-Entry;
Delivery and Form."
<PAGE>
AVAILABLE INFORMATION
The Issuers have filed with the Commission a Registration Statement on Form
S-4 (the "Exchange Offer Registration Statement," which term shall encompass
all amendments, exhibits, annexes and schedules thereto) pursuant to the
Securities Act, and the rules and regulations promulgated thereunder, covering
the Exchange Debentures being offered hereby. This Prospectus does not contain
all the information set forth in the Exchange Offer Registration Statement.
For further information with respect to the Issuers and the Exchange Offer,
reference is made to the Exchange Offer Registration Statement. Statements
made in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Exchange
Offer Registration Statement, reference is made to the exhibit for a more
complete description of the document or matter involved, and each such
statement shall be deemed qualified in its entirety by such reference. The
Exchange Offer Registration Statement, including the exhibits thereto, can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at
the Regional Offices of the Commission at 75 Park Place, New York, New York
10007 and at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Additionally, the Commission
maintains a web site (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission, including the Issuers.
As a result of the filing of the Exchange Offer Registration Statement with
the Commission, the Issuers will become subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith will be required to file periodic reports
and other information with the Commission. The obligation of the Issuers to
file periodic reports and other information with the Commission will be
suspended if the Exchange Debentures are held of record by fewer than 300
holders as of the beginning of any fiscal year of the Issuers other than the
fiscal year in which the Exchange Offer Registration Statement is declared
effective. The Issuers will nevertheless be required to continue to file
reports with the Commission if the Exchange Debentures are listed on a
national securities exchange. In the event the Issuers cease to be subject to
the informational requirements of the Exchange Act, Holdings will be required
under the Indenture to continue to file with the Commission the annual and
quarterly reports, information, documents or other reports, including, without
limitation, reports on Forms 10-K, 10-Q and 8-K, which would be required
pursuant to the informational requirements of the Exchange Act. Under the
Indenture, the Issuers shall file with the Trustee annual, quarterly and other
reports within fifteen days after it files such reports with the Commission.
Further, to the extent that annual or quarterly reports are furnished by the
Issuers to holders of partnership interests generally it will mail such
reports to holders of Exchange Debentures. The Issuers will furnish annual and
quarterly financial reports to unitholders of the Issuers and will mail such
reports to holders of Exchange Debentures pursuant to the Indenture, thus
holders of Exchange Debentures will receive financial reports every quarter.
Annual reports delivered to the Trustee and the holders of Exchange Debentures
will contain financial information that has been examined and reported upon,
with an opinion expressed by an independent public or certified public
accountant. The Issuers will also furnish such other reports as may be
required by law.
----------------
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The statements appear in a
number of places in this Prospectus and include statements regarding the
intent, belief or current expectations of the Issuers or their respective
officers with respect to, among other things, the ability to enter into and
borrow funds under the Senior Credit Facilities, the ability to successfully
implement operating strategies, including trends affecting the Company's
business, financial condition and results of operations. All statements other
than statements of historical facts included in this Prospectus, including,
without limitation, the statements under "Prospectus Summary," "Unaudited Pro
Forma Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business," and located
elsewhere herein regarding industry prospects and the Company's financial
position are forward-
i
<PAGE>
looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Although
the Issuers believe that the expectations reflected in such forward-looking
statements are reasonable, they can give no assurance that such expectations
will prove to have been correct. Important factors that could cause actual
results to differ materially from the Issuers' expectations (the "Cautionary
Statements") are disclosed in this Prospectus, including, without limitation,
in conjunction with the forward-looking statements included in this Prospectus
under "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business."
All subsequent written and oral forward-looking statements attributable to
the Issuers or persons acting on their behalf are expressly qualified in their
entirety by the Cautionary Statements and Risk Factors contained throughout
this Prospectus.
MARKET SHARE AND INDUSTRY DATA
The market share and industry data presented herein are based upon estimates
by management of the Company, utilizing various third party sources, where
available. While management believes that such estimates are reasonable and
reliable, in certain cases, such estimates cannot be verified by information
available from independent sources. Accordingly, no assurance can be given
that such market share and industry data are accurate in all material
respects.
ii
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Each prospective investor is urged to read this
Prospectus in its entirety, including information set forth under the heading
"Risk Factors." Unless the context otherwise requires, references herein to
"ACR" or the "Company" include Anthony Crane Rental, L.P., its subsidiaries and
affiliates after giving effect to the Transactions. References herein to other
companies include the subsidiaries and affiliates of such companies. See "The
Transactions."
HOLDINGS
Partnership interests of the Company and investment in the capital stock of
AC Holdings Corp. account for all of Holdings' assets. Holdings conducts all of
its business through the Company.
THE COMPANY
Anthony Crane Rental, L.P. is the largest provider of comprehensive crane and
lifting equipment rentals and services in North America. ACR is the only
national crane rental company in the highly fragmented U.S. crane rental
industry. The Company has a network of 25 crane rental yards that provide
services to over 8,000 customers in 41 states, Mexico and the Caribbean. The
Company owns approximately 2,400 pieces of lifting equipment, ranging from
1,000-ton mobile cranes to two-person aerial work platforms. The Company
believes that its crane fleet represented approximately 15% of the total U.S.
crane rental fleet in 1997. While its primary business is the rental of crane
and lifting equipment, approximately 15% of the Company's 1997 revenues were
derived from sales of new and used equipment. The Company has achieved 31
consecutive years of revenue growth and compound annual growth rates of
revenues and EBITDA (as defined) from 1993 to 1997 of 26.0% and 19.5%,
respectively. For the twelve months ended June 30, 1998, on a pro forma basis,
ACR generated revenues and EBITDA of $193.5 million and $55.4 million,
respectively.
The Company has grown by pursuing an operating philosophy focused on serving
the crane and lifting needs of industrial customers in the petrochemical,
paper, steel, utility, mining and multiple other industries. These industrial
customers, which accounted for approximately 70% of the Company's 1997 rental
revenues, frequently rent cranes for regularly scheduled, non-deferrable plant
maintenance activities. These projects can require up to 100 cranes of varying
sizes at any one time and are often extremely time-sensitive because they
interrupt plant operations. As a result, industrial customers value
reliability, availability, safety and operator experience more than certain
other factors. The Company believes that its industrial customer base provides
stable crane rental demand as such customers tend to require a certain level of
predictable and necessary plant maintenance regardless of economic conditions.
The Company has also been successful in serving the needs of construction
contractors, which accounted for approximately 30% of 1997 rental revenues.
These construction customers rent cranes primarily for large, long-term public
infrastructure and commercial construction projects which are generally not
deferred once started.
INDUSTRY
The crane rental industry is an estimated $750 million market within the $16
billion general equipment rental industry. The general equipment rental
industry has grown at a compound annual growth rate of approximately 15% from
1991 to 1996. This growth has been driven by a combination of underlying end-
user growth and a trend toward outsourcing non-core operations in order to: (i)
reduce their capital investments; (ii) gain access to specialized equipment on
an economic basis; (iii) meet safety standards; and (iv) minimize the downtime,
maintenance, repair, storage and other operating costs associated with
equipment ownership.
1
<PAGE>
Growth in the crane rental industry has resulted from factors similar to
those driving growth in the general equipment rental industry, particularly the
trend toward further outsourcing. Rental companies are able to provide
customers with savings relative to owning cranes by capitalizing on volume-
driven equipment purchase discounts and high utilization rates. As evidence of
the outsourcing trend, the Company believes that approximately 80% of new
cranes sold in 1997 were purchased directly for the rental market, representing
an increase from 40% in the early 1980s. However, the Company believes rental
companies own less than one-half of the total installed base of cranes in the
United States. Management believes there is substantial growth potential from
the continued outsourcing of lifting equipment as an increasing number of end
users assess the "rent versus buy" decision.
The crane rental industry is highly fragmented and is served by a distinct
set of companies who focus almost exclusively on crane and lifting equipment
rental. ACR generally competes with a small number of regional crane rental
companies (who typically own less than 200 cranes) and hundreds of local crane
rental companies (who typically own less than 50 cranes). Management believes
that general equipment rental companies have not significantly participated in
the crane rental market because they are less able to meet the broad needs of
crane rental customers for several reasons, including: (i) the high levels of
expertise and commitment required to provide a full range of value-added
lifting services, such as highly qualified, well trained operators and lift
planning; (ii) the substantial amount of capital dedicated to cranes and
lifting equipment required to provide the fleet size and selection necessary to
meet the broad demands of larger customers; and (iii) the significant
maintenance programs required to ensure equipment reliability and safety. Given
the unique characteristics and fragmentation of the crane rental industry,
management believes there are substantial opportunities for ACR to leverage its
competitive advantages and further increase its market share through geographic
expansion and consolidation.
COMPETITIVE STRENGTHS
ACR believes that it benefits from the following competitive strengths:
LEADING MARKET POSITION AND NATIONAL SCOPE. ACR is the largest and only
national provider of comprehensive crane and lifting equipment rentals and
services in the United States. The Company estimates that its crane fleet
represented approximately 15% of the total U.S. crane rental fleet in 1997.
According to industry estimates, the Company's crane rental fleet is
significantly larger than that of its next largest competitor. Management
believes that, relative to the Company, most local and regional crane rental
competitors lack the fleet size necessary to provide customers with comparable
selection and availability. Furthermore, ACR's national scope, together with
the mobile nature of its fleet, affords it the ability to move assets in
response to varying levels of regional or seasonal demand and thus maximize its
fleet utilization.
LOW COST POSITION. ACR's leadership position results in economies of scale,
which management believes provide significant cost savings relative to its
competitors and thus allow the Company to provide superior services at
competitive prices. ACR's low cost position results from a number of factors.
First, ACR is the largest non-government buyer of cranes in the United States
and consequently benefits from volume-driven purchase discounts. Second, ACR
achieves superior utilization rates for its equipment due to its broad customer
base and ability to move equipment among both yards and regions. Third, ACR
realizes greater efficiency in its maintenance operations, which enables the
Company to realize longer equipment lives than many of its competitors.
Finally, ACR spreads operating and corporate overhead costs over a larger
revenue base. As a result of these advantages, management believes that the
Company generally earns higher margins and returns on its equipment investments
than its smaller local and regional competitors.
EMPHASIS ON INDUSTRIAL CUSTOMERS. The Company focuses on serving the crane
and lifting needs of industrial customers, who frequently rent cranes for
regularly scheduled, non-deferrable plant maintenance activities. Industrial
usage accounted for approximately 70% of the Company's rental revenues in 1997.
Management believes that, relative to its competitors, ACR is better positioned
to serve industrial customers for
2
<PAGE>
several reasons. First, ACR meets the quantity, availability and reliability
requirements of large industrial customers with its broad, well maintained
fleet which includes larger and more specialized cranes required for major
plant maintenance jobs and special applications. Second, the Company offers a
full range of lifting services and experienced crane operators, which are
increasingly important as customers outsource more of their crane and lifting
needs. Last, ACR minimizes downtime on a customer's site through both
preventative maintenance and field repair/replacement services. The Company
believes that its industrial customer base provides stable crane rental demand
as such customers tend to require a certain level of predictable and necessary
plant maintenance regardless of economic conditions.
MODERN, WELL MAINTAINED CRANE FLEET. ACR has a modern, well maintained fleet
with an average age of approximately five years as of June 30, 1998. From
January 1, 1994 through June 30, 1998, the Company has invested approximately
$266 million in rental equipment. As a result of these capital investments, the
Company has expanded its rental fleet by approximately 1,500 units over such
four and one half year period. In addition, ACR spent over $13 million on
expensed fleet maintenance during 1997 and $7 million for the six months ended
June 30, 1998, in order to maintain the value of its fleet and exceed industry-
accepted safety and reliability standards. By regularly inspecting its cranes
and investing in preventive maintenance, ACR is able to minimize costly field
repairs and downtime on customer sites. Management believes that its strong
maintenance programs enhance the long-term value of its cranes over their 15 to
25 year average lives. From 1994 to 1997, ACR sold its used equipment for an
average of greater than 90% of its original cost.
SUPERIOR FLEET MANAGEMENT. The Company believes that a key factor
contributing to its ability to generate consistent returns and strong resale
values on its rental fleet investment has been its proactive fleet management
program. Through this program, the Company uses a tracking system to monitor
and maximize asset utilization on a crane-by-crane basis. The Company's fleet
management program facilitates decisions regarding: (i) asset mix at individual
yards; (ii) movements of equipment on an intra-regional and inter-regional
basis; and (iii) relocation or divestiture of underperforming assets.
Management believes that as a result of its effective fleet management and high
utilization rates, the Company has generated consistent returns on its fleet
investment.
COMPREHENSIVE CRANE AND LIFTING EXPERTISE. Over its 30-year history, the
Company has developed significant lifting expertise. The Company provides a
full range of turnkey lift planning and execution services, including job
specification, equipment selection and skilled crane operation and rigging. The
Company's regional managers average over 27 years of crane rental experience.
The Company maintains a Crane Specialist at each yard and has several special
situation experts throughout its organization who typically have many years of
lifting and crane operating experience. In addition, the Company believes that
it has the ability to attract and retain superior operators which allows it to
strengthen customer relationships and provide superior execution. ACR believes
that its long history and reputation as a crane expert and total lifting
solution provider represents a significant competitive advantage, and the
majority of the Company's rentals include the value-added services described
above.
DIVERSE CUSTOMER BASE. The Company believes its diverse customer base
mitigates the impact of an economic downturn related to a particular customer,
industry or geographic region. In 1997, ACR served over 8,000 customers in 41
states, Mexico and the Caribbean. Examples of the Company's key customers
include: Hess Oil, USX Corp., Mobil Corp., Huntsman Corp., Florida Power and
Light Co., International Paper Co., Procter & Gamble Co. and Bayer AG. No
customer accounted for greater than 2% of the Company's rental revenues in
1997, other than a single industrial customer who represented 7% of 1997 rental
revenues and for whom the Company provides fleet management services under the
terms of an exclusive contract. The Company's customers cover a wide spectrum
of industries, and management estimates that of the end-user groups for which
it records data, no single industry accounted for more than 13% of rental
revenues in 1997. Additionally, no single region accounted for greater than 28%
of the Company's 1997 rental revenues.
3
<PAGE>
BUSINESS STRATEGY
ACR's business strategy is to serve the crane and lifting needs of industrial
and other large customers by providing a broad selection of modern, well
maintained lifting equipment, comprehensive lift planning and execution
services and highly qualified, well trained operators. The Company's leading
market position and track record of profitable internal growth are attributable
to the successful implementation of this business strategy. ACR intends to
achieve further growth and strengthen its competitive position through the
continued implementation of this strategy and the following initiatives:
LEVERAGE MARKET LEADERSHIP POSITION. The Company intends to leverage its
leadership position and build on its track record of profitable internal
growth. From 1993 to 1997, ACR achieved a compound annual revenue growth rate
of 26.0% primarily through internal growth. The Company intends to continue
this growth by: (i) expanding sales in existing yards through equipment
additions and marketing efforts targeted at new and existing customers; (ii)
opening satellite yards in contiguous geographic areas; and (iii) opening
greenfield yards in selected noncontiguous markets.
EMPHASIZE LONG-TERM CUSTOMER RELATIONSHIPS. Management believes that its
customers value the broad range of equipment and services that the Company
provides and many of its customers use ACR for predominantly all of their
lifting needs. The strength of ACR's customer relationships is evidenced by the
fact that 23 of the Company's top 25 customers in 1997 have been major
customers in each of the last five years. The Company capitalizes on its
presence on a customer's site by proactively anticipating and pursuing
incremental equipment rental opportunities and continuously strengthening this
customer relationship. In addition, as the only national provider of crane
rental services, the Company believes that it is uniquely positioned to serve
customers across multiple locations.
COMPLETE CALIFORNIA ROLLOUT. ACR intends to continue to invest in the Los
Angeles and San Diego markets, which it entered in 1997 with three new rental
yards. During the initial stages of infrastructure buildout, the Company
incurred significant start-up costs and experienced lower fleet utilization
than that of its more mature yards. The Company is increasing the fleet size of
these new yards in order to leverage its existing investment and meet the
diverse lifting needs of larger customers in these markets. Management expects
that these equipment additions will allow the Company to grow revenues in these
attractive markets and achieve fleet utilization and operating margins
consistent with those of the Company's more mature yards.
EXPAND THROUGH SELECTED ACQUISITIONS. The crane rental industry is highly
fragmented and the Company generally competes with a small number of regional
and hundreds of local crane rental companies. Management believes that there
are substantial opportunities for ACR to leverage its competitive strengths and
increase its market share through selected acquisitions. In evaluating
acquisition targets, the Company seeks acquisitions that would allow it to
penetrate new geographic markets or to solidify its position in certain
existing geographic markets, while generating attractive economic returns and
building on existing customer relationships.
RECENT DEVELOPMENTS
The Company has continued to experience growth in revenues and EBITDA since
December 31, 1997. For the seven months ended July 31, 1998, total revenues
increased 9.5%, from $108.2 million in 1997 to $118.5 million in 1998. Over the
same seven-month period, pro forma EBITDA increased 31.0%, from $27.7 million
to $36.3 million. A significant portion of this growth resulted from the full-
year impact of the capital expenditures for new rental equipment made in 1997
and the improved performance of the Company's new yards in California. See
"Unaudited Pro Forma Consolidated Financial Data" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
4
<PAGE>
THE SPONSOR
Bain Capital, Inc. ("Bain") manages capital in excess of $3 billion and has
invested in more than 110 companies representing over $10 billion in purchase
price. Bain is one of the most experienced and successful private equity
investors in the United States and the firm's principals have extensive
experience working with companies in a wide range of industries. Bain's
investment strategy is to acquire companies in partnership with exceptional
management teams and to improve the long-term value of businesses. Bain
typically identifies companies with strong strategic positions and significant
opportunities for growth. Bain's investment in the Company is among its largest
to date.
THE TRANSACTIONS
Concurrent with the consummation of the Debenture Offering, the Company
consummated the Recapitalization (as defined) whereby, among other things: (i)
the Company and AC Capital Corp. completed the Note Offering; (ii) the Company
entered into and borrowed under the Senior Credit Facilities (as defined);
(iii) the Current Owners (as defined) received the Holdings Preferred Units (as
defined) with a liquidation value of approximately $22.5 million;
(iv) Bain/ACR, L.L.C., a Delaware limited liability company and certain members
of senior management of the Company (the "Equity Investor") indirectly acquired
through Holdings approximately 82% of the outstanding common partnership
interests of the Company; and (v) the Current Owners (as defined) indirectly
retained through Holdings approximately 18% of the outstanding common
partnership interests of the Company. See "The Transactions" and "Use of
Proceeds."
------------
The executive offices of Holdings are located at 1165 Camp Hollow Road, West
Mifflin, Pennsylvania 15122, and its telephone number is (412) 469-3700.
5
<PAGE>
THE DEBENTURE OFFERING
Debentures.................. The Debentures were sold (the "Debenture
Offering") by Holdings and AC Holdings Corp. on
July 22, 1998 to Donaldson, Lufkin & Jenrette and
Goldman, Sachs & Co. (the "Initial Purchasers")
pursuant to a Purchase Agreement dated July 16,
1998 (the "Purchase Agreement"). The Initial
Purchasers subsequently resold the Debentures to
qualified institutional buyers pursuant to Rule
144A under the Securities Act. AC Holdings Corp.
is a wholly owned subsidiary of Holdings that was
incorporated for the sole purpose of serving as a
co-issuer of the Debentures in order to
facilitate the Debenture Offering. AC Holdings
Corp. does not have any operations or assets of
any kind and will not have any revenues.
Prospective investors in the Exchange Debentures
should not expect AC Holdings Corp. to
participate in servicing the interest, principal
obligations or Liquidated Damages (as defined),
if any, on the Exchange Debentures. See
"Description of Exchange Debentures--Certain
Covenants."
Registration Rights Pursuant to the Purchase Agreement, the Issuers
Agreement.................. and the Initial Purchasers entered into a
Registration Rights Agreement, dated as of
July 22, 1998 (the "Registration Rights
Agreement"), which grants the holders of the
Debentures certain exchange and registration
rights. The Exchange Offer is intended to satisfy
such exchange and registration rights which
terminate upon the consummation of the Exchange
Offer.
THE EXCHANGE OFFER
Securities Offered.......... $48,000,000 in principal amount at maturity of
Series B 13 3/8% Senior Discount Debentures due
2009.
The Exchange Offer.......... $1,000 principal amount of the Exchange
Debentures in exchange for each $1,000 principal
amount of Debentures. As of the date hereof,
$25,667,404 aggregate principal amount of
Debentures are outstanding. The Issuers will
issue the Exchange Debentures to holders on or
promptly after the Expiration Date.
Based on an interpretation by the staff of the
Commission set forth in no-action letters issued
to third parties, the Issuers believe that the
Exchange Debentures issued pursuant to the
Exchange Offer in exchange for Debentures may be
offered for resale, resold and otherwise
transferred by any holder thereof (other than any
such holder which is an "affiliate" of either
Holdings or AC Holdings Corp. within the meaning
of Rule 405 under the Securities Act) without
compliance with the registration and prospectus
delivery provisions of the Securities Act,
provided that such Exchange Debentures are
acquired in the ordinary course of such holder's
business and that such holder does not intend to
participate and has no arrangement or
understanding with any person to participate in
the distribution of such Exchange Debentures.
6
<PAGE>
Each Participating Broker-Dealer that receives
Exchange Debentures for its own account pursuant
to the Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any
resale of such Exchange Debentures. The Letter of
Transmittal states that by so acknowledging and
by delivering a prospectus, a Participating
Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be
amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in
connection with resales of Exchange Debentures
received in exchange for Debentures where such
Debentures were acquired by such Participating
Broker-Dealer as a result of market-making
activities or other trading activities. The
Issuers have agreed that, for a period of 180
days from the consummation of the Exchange Offer,
it will make this Prospectus available to any
Participating Broker-Dealer for use in connection
with any such resale. See "Plan of Distribution."
Any holder who tenders in the Exchange Offer with
the intention to participate, or for the purpose
of participating, in a distribution of the
Exchange Debentures could not rely on the
position of the staff of the Commission
enunciated in no-action letters and, in the
absence of an exemption therefrom, must comply
with the registration and prospectus delivery
requirements of the Securities Act in connection
with any resale transaction. Failure to comply
with such requirements in such instance may
result in such holder incurring liability under
the Securities Act for which the holder is not
indemnified by the Issuers.
Expiration Date............. 5:00 p.m., New York City time, on , 1998
unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the latest
date and time to which the Exchange Offer is
extended.
Interest on the Exchange
Debentures and the Each Exchange Debenture will accrete at a rate of
Debentures................. 13 3/8% per annum from its issuance date,
compounded semi-annually to an aggregate
principal amount of $48.0 million on Augustst 1,
2003. Thereafter, interest on the Exchange
Debentures will accrue at the rate of 13 3/8% per
annum and will be payable semi-annually in
arrears on February 1 and August 1, commencing on
February 1, 2004, to holders of record on the
immediately preceding January 15 and July 15.
Interest on the Debentures accepted for exchange
will cease to accrete upon issuance of the
Exchange Debentures.
Conditions to the Exchange The Exchange Offer is subject to certain
Offer...................... customary conditions, which may be waived by the
Issuers. See "The Exchange Offer--Conditions."
Procedures for Tendering Each holder of Debentures wishing to accept the
Debentures................. Exchange Offer must complete, sign and date the
accompanying Letter of Transmittal, or a
facsimile thereof, in accordance with the
7
<PAGE>
instructions contained herein and therein, and
mail or otherwise deliver such Letter of
Transmittal, or such facsimile, together with the
Debentures and any other required documentation
to the Exchange Agent (as defined) at the address
set forth herein. Delivery of the Debentures may
also be made by book-entry transfer in accordance
with the procedures described below. Confirmation
of such book-entry transfer must be received by
the Exchange Agent prior to the Expiration Date.
By executing the Letter of Transmittal or
effecting delivery by book-entry transfer, each
holder will represent to the Issuers that, among
other things, the Exchange Debentures acquired
pursuant to the Exchange Offer are being obtained
in the ordinary course of business of the person
receiving such Exchange Debentures, whether or
not such person is the holder, that neither the
holder nor any such other person has any
arrangement or understanding with any person to
participate in the distribution of such Exchange
Debentures and that neither the holder nor any
such other person is an "affiliate," as defined
under Rule 405 of the Securities Act, of either
Holdings or AC Holdings Corp. See "The Exchange
Offer--Purpose and Effect of the Exchange Offer"
and "--Procedures for Tendering."
Untendered Debentures....... Following the consummation of the Exchange Offer,
holders of Debentures eligible to participate but
who do not tender their Debentures will not have
any further exchange rights and such Debentures
will continue to be subject to certain
restrictions on transfer. Accordingly, the
liquidity of the market for such Debentures could
be adversely affected.
Consequences of Failure to The Debentures that are not exchanged pursuant to
Exchange................... the Exchange Offer will remain restricted
securities. Accordingly, such Debentures may be
resold only: (i) to the Issuers; (ii) pursuant to
Rule 144A or Rule 144 under the Securities Act or
pursuant to some other exemption under the
Securities Act; (iii) outside the United States
to a foreign person pursuant to the requirements
of Rule 904 under the Securities Act; or (iv)
pursuant to an effective registration statement
under the Securities Act. See "The Exchange
Offer--Consequences of Failure to Exchange."
Shelf Registration If the Exchange Offer is not permitted under
Statement.................. applicable law or Commission policy or any holder
of the Debentures (other than any such holder
which is an "affiliate" of either Holdings or AC
Holdings Corp. within the meaning of Rule 405
under the Securities Act) is not eligible under
applicable securities laws to participate in the
Exchange Offer, and such holder has provided
information regarding such holder and the
distribution of such holder's Debentures to the
Issuers for use therein, the Issuers have agreed
to register the Debentures on a shelf
registration statement (the "Shelf Registration
Statement") and use its best efforts to cause it
to be declared effective by the Commission as
promptly as practicable on or after the
consummation of the Exchange Offer. The Issuers
have agreed to maintain the continuous
effectiveness of the Shelf
8
<PAGE>
Registration Statement for, under certain
circumstances, a period of at least two years, to
cover resales of the Debentures held by any such
holders.
Special Procedures for
Beneficial Owners.......... Any beneficial owner whose Debentures are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and who wishes to tender should contact such
registered holder promptly and instruct such
registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes
to tender on such owner's own behalf, such owner
must, prior to completing and executing the
Letter of Transmittal and delivering its
Debentures, either make appropriate arrangements
to register ownership of the Debentures in such
owner's name or obtain a properly completed bond
power from the registered holder. The transfer of
registered ownership may take considerable time.
The Issuers will keep the Exchange Offer open for
not less than twenty business days in order to
provide for the transfer of registered ownership.
Guaranteed Delivery Holders of Debentures who wish to tender their
Procedures................. Debentures and whose Debentures are not
immediately available or who cannot deliver their
Debentures, the Letter of Transmittal or any
other documents required by the Letter of
Transmittal to the Exchange Agent (or comply with
the procedures for book-entry transfer) prior to
the Expiration Date must tender their Debentures
according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Guaranteed
Delivery Procedures."
Withdrawal Rights........... Tenders may be withdrawn at any time prior to
5:00 p.m., New York City time, on the Expiration
Date.
Acceptance of Debentures
and Delivery of Exchange The Issuers will accept for exchange any and all
Debentures................. Debentures which are properly tendered in the
Exchange Offer prior to 5:00 p.m., New York City
time, on the Expiration Date. The Exchange Notes
issued pursuant to the Exchange Offer will be
delivered promptly following the Expiration Date.
See "The Exchange Offer--Terms of the Exchange
Offer."
Use of Proceeds............. There will be no cash proceeds to the Issuers
from the exchange pursuant to the Exchange Offer.
Exchange Agent.............. State Street Bank and Trust Company.
THE EXCHANGE DEBENTURES
General..................... The form and terms of the Exchange Debentures are
the same as the form and terms of the Debentures
(which they replace) except that: (i) the
Exchange Debentures bear a Series B designation;
(ii) the Exchange Debentures have been registered
under the Securities Act and, therefore, will not
bear legends restricting the transfer thereof;
9
<PAGE>
and (iii) the holders of Exchange Debentures will
not be entitled to certain rights under the
Registration Rights Agreement, including the
provisions providing for an increase in the
interest rate on the Debentures in certain
circumstances relating to the timing of the
Exchange Offer, which rights will terminate when
the Exchange Offer is consummated. See "The
Exchange Offer--Purpose and Effect of the
Exchange Offer." The Exchange Debentures will
evidence the same debt as the Debentures and will
be entitled to the benefits of the Indenture. See
"Description of Exchange Debentures."
Securities Offered..........
$48.0 million in principal amount at maturity of
13 3/8% Senior Discount Debentures due 2009.
Issuers..................... The Exchange Debentures will be joint and several
obligations of Holdings and AC Holdings Corp. AC
Holdings Corp. is a wholly owned subsidiary of
Holdings formed in connection with the Debenture
Offering. AC Holdings Corp. has no assets, no li-
abilities (other than the Debentures) and no op-
erations and will be prohibited from engaging in
any business activities.
Maturity Date...............
August 1, 2009.
Interest Rate............... The Exchange Debentures will accrete at a rate of
13 3/8% per annum, compounded semi-annually to an
aggregate principal amount of $48.0 million on
August 1, 2003. Thereafter, interest on the Ex-
change Debentures will accrue at the rate of 13
3/8% per annum and will be payable semi-annually
in arrears on February 1 and August 1, commencing
on February 1, 2004, to holders of record on the
immediately preceding January 15 and July 15.
Optional Redemption......... The Exchange Debentures will be redeemable at the
option of the Issuers, in whole or in part, at
any time on or after August 1, 2003 in cash at
the redemption prices set forth herein, plus ac-
crued and unpaid interest and Liquidated Damages,
if any, thereon to the date of redemption. In ad-
dition, at any time prior to August 1, 2001, the
Issuers may on any one or more occasions redeem
up to 35% of the aggregate principal amount at
maturity of Exchange Debentures originally issued
at a redemption price equal to 113.375% of the
Accreted Value thereof (as determined on the re-
demption date), plus Liquidated Damages, if any,
thereon to the redemption date, with the net cash
proceeds of one or more Equity Offerings; pro-
vided that at least 65% of the aggregate princi-
pal amount at maturity of Exchange Debentures
originally issued remains outstanding immediately
after the occurrence of any such redemption. See
"Description of Exchange Debentures--Optional Re-
demption."
Change of Control...........
Upon the occurrence of a Change of Control, each
holder of Exchange Debentures will have the right
to require the Issuers to repurchase all or any
part of such holder's Exchange Debentures at an
offer price in cash equal to 101% of the Accreted
Value thereof on
10
<PAGE>
the date of repurchase (if such date of repur-
chase is prior to August 1, 2003) or 101% of the
aggregate principal amount thereof (if such date
of repurchase is on or after August 1, 2003),
plus, in each case, accrued and unpaid interest
and Liquidated Damages, if any, thereon to the
date of purchase. See "Description of Exchange
Debentures--Repurchase at the Option of Holders--
Change of Control." There can be no assurance
that, in the event of a Change of Control, the
Issuers would have sufficient funds to purchase
all Exchange Debentures tendered. See "Risk Fac-
tors--Limitations on Ability to Make Change of
Control Payment."
Ranking..................... The Exchange Debentures will be general unsecured
obligations of the Issuers, will rank pari passu
in right of payment to all existing and future
senior unsecured indebtedness of the Issuers and
will rank senior in right of payment to all ex-
isting and future subordinated indebtedness of
the Issuers. The Exchange Debentures, however,
will be effectively subordinated to all secured
obligations of the Issuers and all obligations of
Holdings' subsidiaries, including the Notes and
borrowings under the Senior Credit Facilities. As
of June 30, 1998, on a pro forma basis, after
giving effect to the Transactions, the Exchange
Debentures would have been effectively subordi-
nated to $330.9 million of obligations of Hold-
ings' subsidiaries (including a capital lease ob-
ligation). The Indenture permits additional
borrowings under the Senior Credit Facilities in
the future. See "Risk Factors--Holdings Company
Structure; Effective Subordination."
Original Issue Discount..... The Exchange Debentures are being issued with
original issue discount for U.S. federal income
tax purposes. Thus, although interest will not be
payable on the Exchange Debentures prior to Feb-
ruary 1, 2004, holders will be required to in-
clude amounts in gross income for U.S. federal
income tax purposes in advance of receipt of the
cash payments to which such income is attribut-
able. See "Certain U.S. Federal Income Tax Con-
siderations."
Certain Covenants........... The Indenture contains certain covenants that
will limit, among other things, the ability of
the Issuers to: (i) make distributions, except to
the extent required to pay taxes, redeem partner-
ship interests or make certain other restricted
payments or investments, (ii) incur additional
indebtedness or issue preferred equity interests,
(iii) merge, consolidate or sell all or substan-
tially all of its assets, (iv) create liens on
assets and (v) enter into certain transactions
with affiliates or related persons. See "Descrip-
tion of Exchange Debentures--Certain Covenants."
For additional information regarding the Exchange
Debentures, see "Description of Exchange Deben-
tures."
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS WHO
TENDER THEIR DEBENTURES IN THE EXCHANGE OFFER, SEE "RISK FACTORS."
11
<PAGE>
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL AND OTHER
DATA
The following table sets forth: (i) summary historical consolidated financial
data of the Company for the five years ended December 31, 1997 and for the six
months ended June 30, 1997 and 1998; and (ii) summary unaudited pro forma
consolidated financial data as of June 30, 1998, for the year ended December
31, 1997 and for the six months ended June 30, 1997 and 1998. The summary
historical consolidated financial data for the five years ended December 31,
1997 were derived from the audited consolidated financial statements of the
Company, which, for the three years ended December 31, 1997 are included
elsewhere herein. The summary historical consolidated financial data for the
six months ended June 30, 1997 and 1998 were derived from unaudited historical
consolidated financial statements of the Company. The summary unaudited pro
forma data as of June 30, 1998, for the year ended December 31, 1997, and for
the six months ended June 30, 1997 and 1998 give effect to the Transactions as
if they had occurred on such date or at the beginning of such periods. The
following table should be read in conjunction with "Selected Historical
Consolidated Financial Data," "Unaudited Pro Forma Consolidated Financial
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the historical consolidated financial statements and the
notes related thereto of the Company included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------------- --------------------
1993 1994 1995 1996 1997 1997 1998
STATEMENT OF INCOME DATA: (DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Equipment rentals...... $ 68,113 $ 85,369 $106,593 $128,161 $156,408 $ 73,693 $ 90,153
Equipment sales........ 4,814 7,762 9,419 19,444 27,400 16,160 9,396
-------- -------- -------- -------- -------- -------- --------
Total revenues......... 72,927 93,131 116,012 147,605 183,808 89,853 99,549
Cost of revenues:
Cost of equipment rent-
als................... 40,166 50,908 62,533 78,049 97,036 46,010 54,040
Cost of equipment
sales................. 3,345 5,206 7,039 13,643 15,541 10,295 7,687
-------- -------- -------- -------- -------- -------- --------
Total cost of reve-
nues.................. 43,511 56,114 69,572 91,692 112,577 56,305 61,727
Gross profit............ 29,416 37,017 46,440 55,913 71,231 33,548 37,822
Selling, general and
administrative......... 17,219 20,567 23,351 29,211 35,111 15,595 19,343
-------- -------- -------- -------- -------- -------- --------
Income from operations.. 12,197 16,450 23,089 26,702 36,120 17,953 18,479
Net income.............. 7,923 10,009 14,128 16,000 23,801(1) 12,175(1) 10,269
OTHER DATA:
Net cash provided by op-
erating activities..... $ 16,079 $ 22,410 $ 27,695 $ 32,411 $ 30,697 $ 11,000 $ 15,070
EBITDA (2).............. 23,221 28,724 38,922 44,836 47,365 22,825 30,162
Total depreciation and
amortization (3)....... 12,300 14,408 17,653 22,061 21,904(1) 9,974(1) 12,615
Net gain on sales of
used rental
equipment ............. 1,276 2,134 1,820 3,926 10,659 5,102 932
Total capital expendi-
tures.................. 33,735 42,496 45,241 82,673 92,167 42,938 55,839
Original cost of prop-
erty and equipment..... 159,581 197,264 238,544 295,405 361,772 326,400 402,989
Original cost of rental
equipment.............. 142,823 174,090 201,972 248,406 295,297 270,845 336,185
PRO FORMA DATA:
Pro forma EBITDA........ $ 47,978 $ 23,255 $ 30,703
Cash interest expense
(4).................... 31,081 15,541 15,541
</TABLE>
<TABLE>
<CAPTION>
AS OF JUNE 30, 1998
---------------------
ACTUAL PRO FORMA
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.............................. $ 2,217 $ 14,450
Total assets........................................... 338,700 367,709
Total debt............................................. 211,916 355,960
Total partners' capital................................ 98,665 (13,305)(5)
</TABLE>
12
<PAGE>
- --------
(1) Reflects the decrease in depreciation expense of $5.7 million and $2.8
million for the year ended December 31, 1997 and for the six months ended
June 30, 1997, respectively, for the revision in estimated salvage values
used for depreciating certain rental equipment.
(2) EBITDA represents income from operations less the net gain on sales of used
rental equipment plus depreciation and amortization. EBITDA is a widely
accepted financial indicator of a company's ability to service and incur
debt. EBITDA does not represent net income or cash flows from operations as
those terms are defined by generally accepted accounting principles
("GAAP") and does not necessarily indicate whether cash flows will be
sufficient to fund cash needs. The Company's measure of EBITDA may not be
comparable to those reported by other companies.
(3) Excludes amortization of deferred financing fees.
(4) Cash interest expense for all periods is calculated exclusive of any
amortization of deferred financing fees.
(5) Decrease reflects the net cash distribution to the Current Owners of $122.0
million, the recapitalization charges and related fees and expenses of
$23.6 million and the Current Owners' contribution for Holdings' Preferred
Units of $22.5 million, partially offset by the Equity Investor
Contribution of $33.6 million and the issuance of Holdings' Preferred Units
of $22.5 million.
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RISK FACTORS
Holders of the Debentures should carefully consider the risk factors set
forth below, as well as the other information appearing elsewhere in this
Prospectus, before tendering their Debentures in the Exchange Offer.
Certain statements, estimates, predictions and projections contained herein
under "Prospectus Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business," in
addition to certain statements contained elsewhere herein, are "forward-
looking statements" within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act. These forward-looking statements are
prospective, involving risks and uncertainties. While these forward-looking
statements, and any assumptions upon which they are based, are made in good
faith and reflect the Issuers' and the Company's current judgment regarding
the direction of the Company's business, actual results will almost always
vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. Some important
factors (but not necessarily all factors) that could affect the Company's
revenues, growth strategies, future profitability and operating results, or
that otherwise could cause actual results to differ materially from those
expressed in or implied by any forward-looking statement, include the
following: substantial levels of indebtedness; restrictions imposed by the
terms of indebtedness; limitation on ability to make change of control
payments; inability to enter into and borrow under the Senior Credit
Facilities; changes in economic conditions; competition; and the other matters
referred to herein or elsewhere in this Prospectus. Prospective purchasers of
the Debentures are urged to carefully consider these factors in connection
with the forward-looking statements. Neither the Issuers nor the Company
undertake to release publicly any revisions to forward-looking statements that
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
RISKS RELATING TO THE DEBENTURES
Substantial Leverage
Holdings and the Company incurred significant debt in connection with the
Transactions. As of June 30, 1998, after giving pro forma effect to the
Transactions, Holdings would have had outstanding consolidated indebtedness of
$355.9 million, consisting of $25.0 million of the Debentures, $175.0 million
drawn under the Senior Credit Facilities, $155.0 million of the Senior Notes
and a capital lease obligation of $0.9 million. In addition, the Company would
have had available borrowings of up to an additional $150.0 million under the
Revolving Credit Facility. In addition, subject to restrictions in the Senior
Credit Facilities, the Notes Indenture (as defined) and the Indenture,
Holdings and the Company may incur additional indebtedness. For the year ended
December 31, 1997, after giving pro forma effect to the Transactions,
Holdings' ratio of earnings to fixed charges would have been 1.0 to 1.
Holdings' and the Company's ability to make scheduled payments of principal
of, or to pay the premium, if any, interest or Liquidated Damages, if any, on,
or to refinance, its indebtedness (including the Exchange Debentures and the
Senior Notes), or to fund planned capital expenditures will depend on their
future performance, which, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and other factors
that are beyond their control. Based upon the current level of operations and
certain anticipated improvements, management believes that cash flow from
operations and available cash, together with available borrowings under the
Senior Credit Facilities, will be adequate to meet Holdings' and the Company's
future liquidity needs for at least the next several years. There can be no
assurance that Holdings' and the Company's business will generate sufficient
cash flow from operations, that anticipated revenue growth and operating
improvements will be realized or that future borrowings will be available
under the Senior Credit Facilities in an amount sufficient to enable Holdings
and the Company to service their indebtedness, including the Exchange
Debentures and the Senior Notes, or to fund their other liquidity needs.
Holdings and the Company may be required to refinance all or a portion of the
principal of the Exchange Debentures and the Senior Notes, respectively, on or
prior to maturity. There can be no assurance, however, that such refinancings
would be available on commercially reasonable terms or at all. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
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The degree to which Holdings and the Company are leveraged could have
important consequences to holders of the Exchange Debentures and the Senior
Notes, including, but not limited to: (i) making it more difficult for
Holdings and the Company to satisfy their obligations with respect to the
Exchange Debentures and the Senior Notes; (ii) increasing Holdings' and the
Company's vulnerability to general adverse economic and industry conditions;
(iii) limiting Holdings' and the Company's ability to obtain additional
financing to fund future working capital, capital expenditures, research and
development and other general corporate requirements; (iv) requiring the
dedication of a substantial portion of Holdings' and the Company's cash flow
from operations to the payment of principal of, and interest on, its
indebtedness, thereby reducing the availability of such cash flow to fund
working capital, capital expenditures, research and development or other
general corporate purposes; (v) limiting Holdings' and the Company's
flexibility in planning for, or reacting to, changes in its business and the
industry in which it competes; and (vi) placing Holdings and the Company at a
competitive disadvantage compared to less leveraged competitors. In addition,
the Notes Indenture, the Indenture and the Senior Credit Facilities contain
financial and other restrictive covenants that limit the ability of Holdings
and the Company to, among other things, borrow additional funds. Failure by
Holdings and the Company to comply with such covenants could result in an
event of default which, if not cured or waived, could have a material adverse
effect on Holdings' and the Company's business, financial condition and
results of operations. If Holdings and the Company cannot generate sufficient
cash to meet their obligations as they become due or refinance such
obligations, Holdings and the Company may have to sell assets or reduce
capital expenditures. See "Description of Certain Indebtedness--Description of
Senior Credit Facilities" and "Description of the Exchange Debentures--
Repurchase at the Option of Holders--Change of Control."
Holding Company Structure; Effective Subordination
Holdings is a holding company and does not have any material operations or
assets other than ownership of the Company. Accordingly, the Exchange
Debentures will be effectively subordinated to all existing and future
liabilities of Holdings' subsidiaries, including indebtedness under the Senior
Credit Facilities and the Senior Notes. As of June 30, 1998, after giving pro
forma effect to the Transactions, the aggregate amount of liabilities of
Holdings' subsidiaries to which holders of the Exchange Debentures would be
effectively subordinated would have been approximately $330.9 million
(including a capital lease obligation). Holdings and its subsidiaries may
incur additional indebtedness in the future, subject to certain limitations
contained in the instruments governing their indebtedness.
Any right of Holdings to participate in any distribution of assets of its
subsidiaries upon the liquidation, reorganization or insolvency of any such
subsidiary (and the consequent right of the holders of the Exchange Debentures
to participate in the distribution of those assets) will be subject to the
prior claims of the respective subsidiary's creditors. See "Description of
Certain Indebtedness--Description of Senior Credit Facilities."
Limitation on the Payment of Funds to Holdings by its Subsidiaries
Holdings' cash flow, and consequently its ability to service its debt,
including its obligations under the Indenture, is dependent upon the cash
flows of its subsidiaries and the payment of funds by such subsidiaries to
Holdings in the form of loans, distributions or otherwise. Holdings'
subsidiaries have no obligations, contingent or otherwise, to pay any amounts
due pursuant to the Exchange Debentures or to make any funds available
therefor. In addition, the Senior Credit Facilities and the indenture
governing the Senior Notes (the "Notes Indenture") will impose, and agreements
entered into in the future may impose, significant restrictions on
distributions and the making of loans by the Company to Holdings. Accordingly,
repayments of the Exchange Debentures may depend upon the ability of Holdings
to effect an equity offering or to refinance the Exchange Debentures.
Original Issue Discount
The Debentures were issued at a substantial discount from their principal
amount. Consequently, holders generally will be required to include amounts in
gross income for U.S. federal income tax purposes in advance of receipt of any
cash payment on the Exchange Debentures to which the income is attributable.
In addition, the
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Exchange Debentures will be subject to the "applicable high yield discount
obligation" rules under the Internal Revenue Code of 1996, as amended, which
will defer and, in part, eliminate the ability to deduct original issue
discount that accrues with respect to the Exchange Debentures. Prospective
investors should consult their own tax advisors with respect to the
application of the original issue discount rules and, in particular, the
application of the "applicable high yield discount obligation" rules
(including the limited availability of a dividends received deduction for a
corporate holder). See "Certain U.S. Federal Income Tax Considerations" for a
more detailed discussion of the U.S. federal income tax considerations
relevant to holders with respect to the purchase, ownership and disposition of
the Exchange Debentures.
If a bankruptcy case is commenced by or against Holdings under the United
States Bankruptcy Code (the "Bankruptcy Code") after the issuance of the
Exchange Debentures, the claim of a holder of Exchange Debentures with respect
to the principal amount thereof will likely be limited to an amount equal to
the sum of (i) the Accreted Value (as defined in the Indenture) of the
Exchange Debentures as of the date of issuance of the Debentures and (ii) the
original issue discount that is not deemed to constitute "unmatured interest"
for the purposes of the Bankruptcy Code. Any original issue discount that was
not amortized as of any such bankruptcy filing would most likely constitute
"unmatured interest."
Asset Encumbrances
The Revolving Credit Facility is secured by a first-priority perfected lien,
and the Term Loan is secured by a second-priority perfected lien, on all
partnership interests of the Company and all property and assets (tangible and
intangible) of the Company and each of its U.S. subsidiaries, including,
without limitation, all intercompany indebtedness, and all capital stock (or
similar equity interests) of each of the Company's direct and indirect
subsidiaries, whenever acquired and wherever located; provided, however, that
no more than 65% of the capital stock or similar equity interests of non-U.S.
subsidiaries are required to be pledged as security. In the event of a default
under the Senior Credit Facilities, the lenders thereunder could foreclose
upon the assets securing the Senior Credit Facilities and the holders of the
Exchange Debentures might not be able to receive any payments until any
payment default under the Senior Credit Facilities was cured or waived, any
acceleration was rescinded, or the indebtedness under the Senior Credit
Facilities was discharged or paid in full.
Fraudulent Transfer
A significant portion of the net proceeds of the Offering were used to
consummate the Recapitalization. Under applicable provisions of the United
States Bankruptcy Code or comparable provisions of state fraudulent transfer
or conveyance laws, if the Issuers, at the time they issued the Debentures (i)
incurred such indebtedness with intent to hinder, delay or defraud creditors
or (ii)(a) received less than reasonably equivalent value or fair
consideration for incurring such indebtedness and (b)(1) was insolvent at the
time of incurrence, (2) was rendered insolvent by reason of such incurrence
(and the application of the proceeds thereof), (3) was engaged or was about to
engage in a business or transaction for which the assets remaining with the
Issuers constituted unreasonably small capital to carry on its businesses or
(4) intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature, then, in each case, a court of
competent jurisdiction could void, in whole or in part, the Exchange
Debentures or, in the alternative, subordinate the Exchange Debentures to
existing and future indebtedness of the Issuers. The measure of insolvency for
purposes of the foregoing will vary depending upon the law applied in such
case. Generally, however, a company would be considered insolvent if the sum
of its debts, including contingent liabilities, was greater than all of its
assets at fair valuation or if the present fair saleable value of its assets
was less than the amount that would be required to pay the probable liability
on its existing debts, including contingent liabilities, as they become
absolute and matured. The Issuers believe that, for purposes of all such
insolvency, bankruptcy and fraudulent transfer or conveyance laws, the
Debentures were issued without the intent to hinder, delay or defraud
creditors and for proper purposes and in good faith and that Holdings, after
the issuance of the Debentures and the application of the proceeds thereof,
was solvent, and Holdings will have sufficient capital for carrying on its
business and will be able to pay its debts as they mature. There can be no
assurance, however, that a court passing on such questions would agree with
the Issuers' view.
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Limitations on Ability to Make Change of Control Payment
In the event of a Change of Control, the Issuers will be required to make an
offer in cash to repurchase the Exchange Debentures at an offer price in cash
equal to 101% of the Accreted Value thereof on the date of repurchase (if such
date of repurchase is prior to August 1, 2003) or 101% of the aggregate
principal amount thereof (if such date of repurchase is on or after August 1,
2003), plus, in each case, accrued and unpaid interest and Liquidated Damages,
if any, thereon to the date of purchase. The provisions of the Indenture may
not, however, afford holders of the Exchange Debentures protection in the
event of a highly leveraged transaction, reorganization, restructuring, merger
or similar transaction involving the Issuers that may adversely affect holders
of Debentures, if such transaction does not result in a Change of Control. A
Change of Control will result in an event of default under the Senior Credit
Facilities and may result in a default under other indebtedness of the Issuers
that may be incurred in the future. The Senior Credit Facilities prohibit the
purchase of outstanding Exchange Debentures prior to repayment of the
borrowings under the Senior Credit Facilities and any exercise by the holders
of the Exchange Debentures of their right to require the Issuers to repurchase
the Exchange Debentures will cause an event of default under the Senior Credit
Facilities. In addition, prior to repurchasing the Exchange Debentures upon a
Change of Control, the Issuers must either repay all outstanding indebtedness
under the Senior Credit Facilities or obtain the consent of the lenders. If
the Issuers do not obtain such consent or repay their outstanding indebtedness
under the Senior Credit Facilities, the Issuers would remain effectively
prohibited from offering to purchase the Exchange Debentures. Finally, there
can be no assurance that the Issuers will have the financial resources
necessary or be able to arrange financing to repay obligations under the
Senior Credit Facilities and the Indenture or to repurchase the Exchange
Debentures upon a Change of Control. See "Description of Exchange Debentures--
Repurchase at the Option of Holders--Change of Control."
ABSENCE OF PUBLIC MARKET
Prior to the Exchange Offer, there has been no public market for the
Debentures. The Debentures have not been registered under the Securities Act
and will be subject to restrictions on transferability to the extent that they
are not exchanged for Exchange Debentures by holders who are entitled to
participate in this Exchange Offer. The holders of Debentures (other than any
such holder that is an "affiliate" of either Holdings or AC Holdings Corp.
within the meaning of Rule 405 under the Securities Act) who are not eligible
to participate in the Exchange Offer are entitled to certain registration
rights, and the Issuers are required to file a Shelf Registration Statement
with respect to such Debentures. The Exchange Debentures are new securities
for which there currently is no market. The Exchange Debentures are eligible
for trading by qualified buyers in the Private Offerings, Resale and Trading
through Automated Linkages (PORTAL) market. The Issuers do not intend to apply
for listing of the Exchange Debentures on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System. Although the Exchange Debentures are eligible for trading
through PORTAL, the Exchange Debentures may trade at a discount from their
initial offering price, depending upon prevailing interest rates, the market
for similar securities, the Company's performance and other factors. The
Issuers have been advised by the Initial Purchasers that they currently intend
to make a market in the Exchange Debentures as permitted by applicable law and
regulations; however, the Initial Purchasers are not obligated to do so and
any such market-making activities, if commenced, may be discontinued at any
time without notice. In addition, such market-making activities may be limited
during the Exchange Offer and pendency of the Shelf Registration Statement.
Therefore, there can be no assurance that an active market for any of the
Exchange Debentures will develop, either prior to or after the Issuers'
performance of their obligations under the Registration Rights Agreement. See
"Description of Exchange Debentures."
The Exchange Debentures generally will be permitted to be resold or
otherwise transferred (subject to the restrictions described under
"Description of Exchange Debentures") by each holder without the requirement
of further registration. The Exchange Debentures, however, will also
constitute a new issue of securities with no established trading market. The
Exchange Offer will not be conditioned upon any minimum or maximum aggregate
principal amount of Debentures being tendered for exchange. No assurance can
be given as to the liquidity of the trading market for the Exchange
Debentures, or, in the case of non-exchanging holders of Debentures, the
trading market for the Debentures following the Exchange Offer.
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The liquidity of, and trading market for, the Exchange Debentures also may
be adversely affected by general declines in the market or by declines in the
market for similar securities. Such declines may adversely affect such
liquidity and trading markets independently of the financial performance of,
and prospects for, the Company.
EXCHANGE OFFER PROCEDURES
Issuance of the Exchange Debentures in exchange for the Debentures pursuant
to the Exchange Offer will be made only after a timely receipt by the Issuers
of such Debentures, a properly completed and duly executed Letter of
Transmittal and all other required documents. Therefore, holders of the
Debentures desiring to tender such Debentures in exchange for Exchange
Debentures should allow sufficient time to ensure timely delivery. The Issuers
are under no duty to give notification of defects or irregularities with
respect to the tenders of Debentures for exchange. Debentures that are not
tendered or are tendered but not accepted will, following the consummation of
the Exchange Offer, continue to be subject to the existing restrictions upon
transfer thereof and, upon consummation of the Exchange Offer, certain
registration rights under the Registration Rights Agreement will terminate. In
addition, any holder of Debentures who tenders in the Exchange Offer for the
purpose of participating in a distribution of the Exchange Debentures may be
deemed to have received restricted securities and, if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transactions. Each Participating
Broker-Dealer that receives Exchange Debentures for its own account in
exchange for Debentures, where such Debentures were acquired by such
Participating Broker-Dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Debentures. See "Plan of
Distribution." To the extent that Debentures are tendered and accepted in the
Exchange Offer, the trading market for untendered and tendered but unaccepted
Debentures could be adversely affected. See "The Exchange Offer."
COMPANY-SPECIFIC RISKS
Competition
Certain of the Company's principal competitors are less leveraged than the
Company, may have greater financial resources and may be better able to
withstand market conditions within the crane rental industry. The Company
generally competes on the basis of, among other things: (i) quality and
breadth of service; (ii) expertise; (iii) reliability; and (iv) price. There
can be no assurance that the Company will not encounter increased competition
in the future, which could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--
Competition."
Dependence on Key Personnel
The Company is dependent on the continued services of its senior management
team. Although the Company believes it could replace key employees in an
orderly fashion should the need arise, the loss of such key personnel could
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Management."
Labor Relations
As of June 30, 1998, the Company had 725 full time employees. Approximately
30 were employed at the corporate headquarters in West Mifflin, Pennsylvania
and were involved in administrative functions. The remaining employees were
located at ACR's various operating yards and were engaged in management, sales
and marketing, maintenance and administrative functions. In addition, as of
June 30, 1998, the Company contracted with approximately 750 crane operators
on an as-needed basis. The majority of these crane operators were unionized
and, as of June 30, 1998, approximately 14% of the Company's full time
employees were unionized. The Company has never experienced a material work
stoppage and considers its overall relations with its work force to be good.
There can be no assurance, however, that the Company will not, at some point,
be subject to work stoppages by some of its employees or crane operators and,
if such events were to occur, that
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there would not be a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Employees."
Computer System; Year 2000 Issue
The Company is evaluating the extent to which its computer operating systems
will be disrupted upon the turn of the century as a result of the widely-known
dating system flaw inherent in most operating systems (the "Year 2000 Issue").
While the Company believes that new software being installed into its computer
system will address the Year 2000 Issue, there can be no assurance that the
new software will be installed in time to remedy the Year 2000 Issue, that the
Company's computer operating systems will not be disrupted upon the turn of
the century or that such modifications will not require unanticipated capital
expenditures. Any such disruption, whether caused by the Company's systems or
those of any of its suppliers or customers, could have a material adverse
effect on the Company's business, financial condition and results of
operations.
The Company is 95% complete on the remediation phase for all material
information technology systems and expects to complete software reprogramming
and replacement no later than October 1998. After completing the reprogramming
and replacement of software, the Company's plans call for testing and
implementing its information technology systems. Completion of the testing
phase is expected by November 1998, with all remediated systems fully
implemented by December 1998. The total cost of the Year 2000 project is
estimated at $650,000 and is being funded through operating cash flows. To
date, the Company has incurred approximately $600,000 for new systems and
equipment, which all has been capitalized. The total remaining project costs
of approximately $50,000 are attributable to the purchase of new operating
equipment, which will be capitalized.
Cyclicality
The Company's business is affected by the U.S. economy and the varying
economic and business cycles of its customers. During recessionary periods,
the Company may be adversely affected by reduced demand for equipment rentals
and services, particularly from customers involved in construction. Downward
cycles may result in the reduction of equipment rentals and pricing, which may
materially and adversely impact the Company's results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Inflation and Cyclicality."
Concentration of Ownership
As a result of the Transactions, the Equity Investor indirectly owns
approximately 82% of the outstanding common partnership interests of Holdings
and will control the affairs and policies of Holdings and the Company,
including the ability to amend the Partnership Agreements of Holdings or the
Company. Circumstances may occur in which the interests of the Equity Investor
could be in conflict with the interests of the holders of the Exchange
Debentures. In addition, the Equity Investor may have an interest in pursuing
acquisitions, divestitures or other transactions that, in its judgment, could
enhance its equity investment, even though such transactions might involve
risks to the holders of the Exchange Debentures. See "Security Ownership."
Environmental, Health and Safety Requirements
The Company and its operations are subject to federal, state and local
environmental and occupational health and safety laws and regulations,
including laws and regulations governing petroleum storage, waste water
discharge, underground storage tanks, hazardous chemical reporting, and
hazardous waste disposal. Based upon the findings of an environmental
assessment conducted in connection with the Recapitalization, the Company
believes it is in material compliance with such requirements. The Company
expects to spend approximately $100,000 in 1998 to close and upgrade certain
underground storage tanks. The enactment of more stringent laws or regulations
or stricter interpretation of existing laws and regulations could require
additional expenditures by
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the Company, which could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company is subject to liability for the investigation and remediation of
environmental contamination (including contamination caused by other parties)
at the properties it owns or operates and at other properties where the
Company or its predecessors have arranged for the disposal of hazardous
substances. The amount of such liability could have a material adverse effect
on the Company's business, financial condition and results of operations. The
Company is currently investigating and delineating soil and groundwater
contamination at its Savannah, Georgia location that resulted from former
gasoline underground storage tanks. See "Business--Environmental, Health and
Safety Matters."
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THE TRANSACTIONS
OVERVIEW
Pursuant to a recapitalization agreement, dated as of June 1, 1998 (the
"Recapitalization Agreement"), among Anthony Crane Rental, L.P., a
Pennsylvania limited partnership (the "Company"), Bain/ACR, L.L.C., ACR
Management, L.L.C., a Delaware limited liability company and the general
partner of the Company following the Recapitalization (the "General Partner")
and the current owners named therein (the "Current Owners"), the Company and
Holdings, which became the direct owner of 99% of ACR's equity as part of the
Transactions, were recapitalized on July 22, 1998 (the "Recapitalization") in
a transaction in which the proceeds of the Initial Note Offering, together
with the proceeds from the Debenture Offering (as defined) and the Senior
Credit Facilities, the Current Owner Contribution (as defined) and the Equity
Investor Contribution (as defined), were used to fund: (i) a distribution to
the Current Owners of debt proceeds and a recapitalization of the ownership
interests of Holdings consisting of (a) cash in the amount of $122.0 million,
(b) Senior Preferred Units of Holdings with a liquidation value of
approximately $22.5 million ("Holdings Preferred Units"), and (c) common
partnership interests of Holdings with an implied fair value of approximately
$7.4 million, (the "Current Owner Rollover Equity" and, together with the
Holdings Preferred Units, the "Current Owner Contribution"); (ii) the
refinancing of existing indebtedness of the Company (the "Refinancing"), of
approximately $229.2 million (including accrued interest and prepayment
penalties thereon); (iii) excess cash of $12.2 million; and (iv) estimated
transaction expenses of $25.2 million. Each of the Transactions was
conditioned upon each of the others and consummation of each of the
Transactions occurred simultaneously. The Recapitalization and the
transactions described above are collectively referred to herein as the
"Transactions."
STRUCTURE OF THE RECAPITALIZATION
In connection with the Recapitalization, Anthony Crane Sales & Leasing,
L.P., a Pennsylvania limited partnership in which the Company held a 97%
interest: (i) transferred its assets to a new limited partnership in which the
Company has a 99% interest; (ii) was distributed by the Company to the Current
Owners; and (iii) changed its name to Anthony Crane Rental Holdings, L.P. In
connection with the Transactions, Holdings became the direct and indirect
owner of 99% of the Company and each of its subsidiaries' equity, and the
remaining 1% ownership in the Company and each of its subsidiaries was held by
the General Partner, both of which in turn are owned 82% by the Equity
Investor and 18% by the Current Owners. Following the Transactions, the
General Partner transferred its 1% interest in each of the Company's
subsidiaries, Anthony Crane International, L.P. and Anthony Crane Sales &
Leasing, L.P. to Anthony International Equipment Services Corporation and
Anthony Sales & Leasing Corporation, respectively, and those corporations
became wholly owned subsidiaries of the Company. All interests in Holdings and
the Company have voting rights equivalent to their respective economic
interests and limited partners, through a majority vote, can remove the
General Partner.
SOURCES OF FUNDS
In connection with the Transactions: (i) the Company and Anthony Crane
Capital Corporation, a Delaware corporation and wholly owned subsidiary of the
Company ("AC Capital Corp."), completed the offering of $155.0 million in
aggregate principal amount of 10 3/8% Senior Notes due 2008; and (ii) the
Company entered into two credit agreements (collectively, the "Senior Credit
Facilities") with a syndicate of financial institutions (the "Lenders") for
which Goldman Sachs Credit Partners L.P. acted as arranger and syndication
agent (the "Arranger"), DLJ Capital Funding, Inc. acted as documentation agent
and Fleet National Bank acted as administrative agent. The Debentures were
issued at a substantial discount from their principal amount and generated
aggregate gross proceeds to Holdings of approximately $25.0 million. The net
proceeds from the Debenture Offering of approximately $23.1 million were
contributed by Holdings to the Company to fund the Recapitalization. The
Senior Credit Facilities are comprised of a revolving credit facility of up to
$275.0 million (the "Revolving Credit Facility"), of which a net amount of
$125.0 million was drawn at Closing, and a term loan of $50.0 million (the
"Term Loan"). The borrowings under the Senior Credit Facilities, together with
the aggregate gross proceeds from the Initial Note Offering and the Debenture
Offering, Holdings Preferred Units and the Equity Investor Contribution were
used to consummate the Recapitalization and pay fees and expenses
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related to the Transactions. In addition, the Senior Credit Facilities will
provide financing for future working capital, capital expenditures and other
general corporate purposes. See "Description of Senior Credit Facilities."
In connection with the Recapitalization, the Current Owners retained
interests in Holdings consisting of an implied fair value of $7.4 million of
Current Owner Rollover Equity, representing 18% of Holdings common partnership
interests, and the Holdings Preferred Units with a liquidation value of
approximately $22.5 million. In addition, the Equity Investor contributed
$33.6 million of equity to fund the Transactions (the "Equity Investor
Contribution").
REFINANCING OF FORMER INDEBTEDNESS
The Company's former revolving credit facility (the "Former Credit
Agreement") and former senior notes (the "Old Notes" and, together with the
Former Credit Agreement, the "Former Indebtedness") was refinanced in
connection with the Transactions. As of June 30, 1998, $96.0 million was
outstanding under the Former Credit Agreement and $115.0 million was
outstanding under the Old Notes. Upon consummation of the Transactions,
borrowings under the Former Indebtedness, together with $15.1 million of
prepayment penalties and $3.1 million of accrued interest, was repaid with
proceeds from the Transactions. See "Capitalization" and "Description of
Senior Credit Facilities."
SOURCES AND USES
The sources and uses of proceeds in connection with the Transactions were as
follows:
<TABLE>
<CAPTION>
AS OF
JUNE 30, 1998
(DOLLARS IN MILLIONS)
<S> <C>
SOURCES OF FUNDS:
Senior Credit Facilities:
Revolving Credit Facility--Company(1)................... $125.0
Term Loan--Company...................................... 50.0
Senior Notes--Company..................................... 155.0
Debentures--Holdings(2)................................... 25.0
Equity Investor Contribution--Holdings(3)................. 33.6
------
Total sources........................................... $388.6
======
USES OF FUNDS:
Distribution proceeds to Current Owners--Company(4)....... $122.0
Refinancings (including accrued interest)--Company(5)..... 214.1
Transaction expenses--Holdings/Company(6)................. 25.2
Prepayment penalties--Company............................. 15.1
Excess cash--Company(5)................................... 12.2
------
Total uses.............................................. $388.6
======
</TABLE>
- ---------------------
(1) Following the Transactions, the Revolving Credit Facility had total
availability of $275.0 million, with $181.6 million initially drawn at
Closing, followed by an immediate $56.6 million paydown with the proceeds
from the cash contribution to the Company from Holdings (net drawdown at
closing of $125.0 million). See "Description of Senior Credit Facilities."
(2) Represents proceeds from the Debenture Offering which were contributed by
Holdings to the Company.
(3) The Equity Investor Contribution consisted of the purchase of common
partnership interests of Holdings with a fair market value of
approximately $33.6 million, which was contributed by Holdings to the
Company.
(4) Reflects a gross cash distribution of $130.1 million (per the
Recapitalization Agreement) less contractually agreed adjustments for i)
the amount by which prepayment penalties exceeded $13.6 million ($1.5
million), and ii) the amount by which estimated consolidated net worth (as
defined in the Recapitalization Agreement) at closing was less than
targeted net worth (as defined in the Recapitalization Agreement) ($6.6
million). Excludes the non-cash Current Owner Contribution of $29.9
million, consisting of $7.4 million of Current Owner Rollover Equity at an
implied fair value and Holdings Preferred Units with a liquidation value
of approximately $22.5 million.
(5) Funding requirements as of the Closing were approximately $12.2 million
more than pro forma requirements as of June 30, 1998 due to expected
additional borrowings to fund capital expenditures between June 30, 1998
and the Closing.
(6) Reflects fees and expenses related to the Transactions (Holdings of $2.0
million and the Company of $23.2 million). See "Certain Relationships and
Related Transactions."
22
<PAGE>
USE OF PROCEEDS
The aggregate gross proceeds from the issuance of the Debentures, together
with the proceeds of the Initial Note Offering, the borrowings under the
Senior Credit Facilities, the Equity Investor Contribution and the Current
Owner Contribution, were used to consummate the Recapitalization and pay fees
and expenses in connection with the Transactions. See "The Transactions."
23
<PAGE>
CAPITALIZATION
The following table sets forth the historical cash and cash equivalents and
capitalization of the Company as of June 30, 1998 and pro forma cash and cash
equivalents and capitalization of Holdings as adjusted to give effect to the
Transactions, including the sale of the Debentures pursuant to the Debenture
Offering, as if they had occurred on June 30, 1998. This table should be read
in conjunction with the "Selected Historical Consolidated Financial Data" and
"Unaudited Pro Forma Consolidated Financial Data" and the Consolidated
Financial Statements of the Company and notes related thereto included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
JUNE 30, 1998
-----------------------
ACTUAL PRO FORMA
(DOLLARS IN MILLIONS)
<S> <C> <C>
Cash and cash equivalents........................... $ 2.2 $ 14.4 (1)
========== ==========
Long-term debt obligations, including current por-
tion:
Existing long-term debt, including current por-
tion............................................. $ 211.0 $ --
Senior Credit Facilities:
Revolving Credit Facility....................... -- 125.0 (2)
Term Loan....................................... -- 50.0
Senior Notes...................................... -- 155.0
Debentures offered hereby......................... -- 25.0
Capital lease obligation.......................... 0.9 0.9
---------- ----------
Total debt...................................... 211.9 355.9
Partnership capital:
Holdings Preferred Units.......................... -- 22.5
Partner common units.............................. 98.7 132.3
Recapitalization charges.......................... -- (15.9)(3)
Distribution to Current Owners and related fees
and expenses..................................... -- (152.2)(4)
---------- ----------
Total partnership capital....................... 98.7 (13.3)
---------- ----------
Total capitalization............................ $ 310.6 $ 342.6
========== ==========
</TABLE>
- --------
(1) Funding requirements as of the Closing were approximately $12.2 million
more than pro forma requirements as of June 30, 1998 due to expected
additional borrowings to fund capital expenditures between June 30, 1998
and the Closing.
(2) Following the Transactions, the Revolving Credit Facility had total
availability of $275.0 million, with net $125.0 million drawn at Closing.
See "Description of Senior Credit Facilities."
(3) Represents realized extraordinary loss from payment of penalties on the
Old Notes ($15.1 million) and a write-off of debt issuance costs related
to the Existing Indebtedness ($0.8 million).
(4) Reflects the distribution to the Current Owners from the proceeds of the
Debenture Offering and the Initial Note Offering and related fees and
expenses as follows:
<TABLE>
<S> <C>
Cash distribution to Current Owners(5).............................. $(122.0)
Issuance of Holdings Preferred Units to Current Owners.............. (22.5)
Payment of distribution related fees and expenses................... (5.4)
Write-off of previously deferred Transaction related fees and ex-
penses............................................................. (2.3)
-------
Total distribution to Current Owners and related fees and
expenses......................................................... $(152.2)
=======
</TABLE>
(5) Reflects a gross cash distribution of $130.1 million (per the
Recapitalization Agreement) less contractually agreed adjustments for i)
the amount by which prepayment penalties exceeded $13.6 million ($1.5
million), and ii) the amount by which estimated consolidated net worth (as
defined in the Recapitalization Agreement) at closing was less than
targeted net worth (as defined in the Recapitalization Agreement) ($6.6
million).
24
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The Unaudited Pro Forma Consolidated Financial Data of Holdings have been
derived by giving effect to the pro forma adjustments to the historical
consolidated financial statements of the Company appearing elsewhere in this
Prospectus. The unaudited pro forma condensed consolidated balance sheet gives
effect to the Transactions as if they were consummated on June 30, 1998. The
unaudited pro forma consolidated statements of income for the six months ended
June 30, 1998 and 1997 and the year ended December 31, 1997 give effect to the
Transactions as if they were consummated at the beginning of such periods.
The pro forma adjustments are described in the accompanying notes and are
based upon the available information and upon certain assumptions that
management believes are reasonable. The Unaudited Pro Forma Consolidated
Financial Data and accompanying notes should be read in conjunction with the
Consolidated Financial Statements of the Company and related notes, and other
financial information pertaining to Holdings and the Company, including
"Capitalization" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," included elsewhere in this Prospectus.
The Unaudited Pro Forma Consolidated Financial Data and accompanying notes
are provided for informational purposes only and are not necessarily
indicative of the operating results that would have occurred had the
Transactions been consummated on the dates described above, nor are they
necessarily indicative of Holdings' or the Company's future results of
operations or financial position.
As a result of the Transactions, the Company incurred penalties associated
with the prepayment of the Old Notes of approximately $15.1 million and wrote-
off approximately $0.8 million of existing debt issuance costs. These costs
are non-recurring in nature and have therefore not been reflected in the
unaudited pro forma consolidated statements of income.
25
<PAGE>
ANTHONY CRANE RENTAL HOLDINGS, L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
HISTORICAL TRANSACTIONS PRO FORMA
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............. $ 2,217 $ 12,233 (1) $ 14,450
Trade accounts receivable, net........ 26,440 26,440
Other receivables..................... 2,142 2,142
Prepaid expenses and deposits......... 1,662 1,662
-------- -------- --------
Total current assets................ 32,461 12,233 44,694
Rental equipment, net................. 250,147 250,147
Property and equipment, net........... 50,889 50,889
Intangible assets, net................ 1,611 1,611
Debt issuance costs................... 805 19,080 (1) 19,885
Other assets.......................... 2,787 (2,304)(2) 483
-------- -------- --------
Total assets........................ $338,700 $ 29,009 $367,709
======== ======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable...................... $ 16,711 $ 16,711
Accrued interest...................... 3,065 (3,065)(1) --
Other accrued liabilities............. 6,864 6,864
-------- -------- --------
Total current liabilities........... 26,640 (3,065) 23,575
Long-term debt.......................... 211,000 (36,000)(1) 175,000
Senior Notes............................ -- 155,000 (1) 155,000
Debentures.............................. -- 25,044 (1) 25,044
Long-term capital lease obligation...... 822 822
Other non-current liabilities........... 1,573 1,573
-------- -------- --------
Total liabilities................... 240,035 140,979 381,014
Partners' capital....................... 98,665 -- (13,305)
-- (15,881)(3) --
-- (152,209)(1)(2) --
-- 33,620 (1)(4) --
-- 22,500 (5) --
-------- -------- --------
Total liabilities and partners'
capital............................ $338,700 $ 29,009 $367,709
======== ======== ========
</TABLE>
26
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(DOLLARS IN THOUSANDS)
(1) The Unaudited Pro Forma Condensed Consolidated Balance Sheet gives effect
to the Transactions including the following unaudited pro forma
adjustments and reflects the issuance of the Debentures, the Senior Notes,
the borrowings under the Senior Credit Facilities, proceeds from the
Equity Investor Contribution, the repayment of borrowings under the
Existing Indebtedness and payments of fees and expenses related to the
Transactions including an initial $181.6 million drawdown on the Revolving
Credit Facility followed by an immediate $56.6 million paydown with the
proceeds from the cash contribution to the Company from Holdings (net
drawdown at closing of $125.0 million) as follows:
<TABLE>
<S> <C>
SOURCES OF CASH:
Senior Credit Facilities:(a)
Revolving Credit Facility...................................... $ 181,620
Term Loan...................................................... 50,000
Senior Notes(a).................................................. 155,000
Debentures offered hereby(a)..................................... 25,044
Equity Investor Contribution..................................... 33,620
---------
Total sources................................................ $ 445,284
=========
USES OF CASH:
Payment of Existing Indebtedness(a).............................. $ 211,000
Payment of existing accrued interest(a).......................... 3,065
Payment of prepayment penalties(b)............................... 15,076
Payment of deferred financing fees(a)............................ 19,885
Payment of distribution related fees and expenses (See footnote
(2) below)...................................................... 5,400
Paydown of Revolving Credit Facility(a).......................... 56,620
Excess cash(c)................................................... 12,233
Cash distribution to Current Owners(d)........................... 122,005
---------
Total uses................................................... $ 445,284
=========
- --------
(a) Reflects the issuance of the Debentures, the Senior Notes, the
borrowings and repayments under the Senior Credit Facilities and
deferred financing costs associated with the Transactions and the
repayment of the Existing Indebtedness (including accrued interest)
outstanding at June 30, 1998 as follows:
DEBT ISSUANCE COSTS:
Incurrence of financing fees related to new indebtedness....... $ 19,885
Write-off of costs associated with the Refinancing (see foot-
note (3) below)............................................... (805)
---------
Net adjustment............................................... $ 19,080
=========
SENIOR CREDIT FACILITIES:
Initial proceeds from Senior Credit Facilities................. $ 231,620
Payment of Existing Indebtedness............................... (211,000)
Paydown of Revolving Credit Facility........................... (56,620)
---------
Net adjustment............................................... $ (36,000)
=========
Payment of accrued interest.................................... $ (3,065)
=========
NOTES:
Proceeds from Senior Notes..................................... $ 155,000
=========
Proceeds from Debentures offered hereby........................ $ 25,044
=========
</TABLE>
27
<PAGE>
(b) See footnote (3) below.
(c) Estimated funding requirements as of the Closing were approximately
$12.2 million more than pro forma requirements as of June 30, 1998 due
to expected additional borrowings to fund capital expenditures between
June 30, 1998 and the Closing.
(d) Represents cash distribution to the Current Owners from the proceeds of
the Debenture Offering and the Initial Notes Offering. See footnote (2)
below.
(2) Reflects the total distribution to the Current Owners, including the
proceeds of the Debenture Offering and the Initial Notes Offering and
related fees and expenses as follows:
<TABLE>
<S> <C>
Cash distribution to Current Owners.............................. $122,005
Issuance of Holdings Preferred Units to Current Owners........... 22,500
--------
Total distribution to Current Owners........................... 144,505
Write-off of previously deferred Transaction related fees and ex-
penses.......................................................... 2,304
Payment of distribution related fees and expenses................ 5,400
--------
Total related fees and expenses................................ 7,704
--------
Total distribution to Current Owners and related fees and ex-
penses........................................................ $152,209
========
</TABLE>
(3) Represents payment of estimated penalties associated with the prepayment
of the Old Notes of $15,076 and write-off of remaining portion of debt
issuance costs of $805 at June 30, 1998 relating to the Existing
Indebtedness.
(4) Represents Equity Investor Contribution of $33,620.
(5) Represents issuance of Holdings Preferred Units to Current Owners.
28
<PAGE>
ANTHONY CRANE RENTAL HOLDINGS, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS FOR
HISTORICAL THE TRANSACTIONS PRO FORMA
<S> <C> <C> <C>
Revenues:
Equipment rentals...................... $90,153 $ -- $90,153
Equipment sales........................ 9,396 -- 9,396
------- ------- -------
Total revenues....................... 99,549 -- 99,549
Cost of revenues:
Cost of equipment rentals.............. 54,040 -- 54,040
Cost of equipment sales................ 7,687 -- 7,687
------- ------- -------
Total cost of revenues............... 61,727 -- 61,727
------- ------- -------
Gross profit............................. 37,822 -- 37,822
Selling, general and administrative
expenses................................ 19,343 (541)(1) 18,802
------- ------- -------
Income from operations................... 18,479 541 19,020
Interest expense....................... 8,620 9,779 (2) 18,399
Other income........................... (470) -- (470)
------- ------- -------
Income before taxes...................... 10,329 (9,238) 1,091
Provision for state taxes................ 60 -- 60
------- ------- -------
Net income............................... $10,269 $(9,238) $ 1,031
======= ======= =======
</TABLE>
<TABLE>
<S> <C>
OTHER DATA:
EBITDA (3)........................................................... $30,703
Total depreciation and amortization.................................. 12,615
Net gain on sales of used rental equipment........................... 932
Total capital expenditures........................................... 55,839
Ratio of earnings to fixed charges (4)............................... 1.1x
Ratio of EBITDA to cash interest expense (3)......................... 2.0x
</TABLE>
29
<PAGE>
ANTHONY CRANE RENTAL HOLDINGS, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS FOR
HISTORICAL THE TRANSACTIONS PRO FORMA
<S> <C> <C> <C>
Revenues:
Equipment rentals...................... $73,693 $ -- $73,693
Equipment sales........................ 16,160 -- 16,160
------- -------- -------
Total revenues....................... 89,853 -- 89,853
Cost of revenues:
Cost of equipment rentals.............. 46,010 -- 46,010
Cost of equipment sales................ 10,295 -- 10,295
------- -------- -------
Total cost of revenues............... 56,305 -- 56,305
------- -------- -------
Gross profit............................. 33,548 -- 33,548
Selling, general and administrative
expenses................................ 15,595 (430)(1) 15,165
------- -------- -------
Income from operations................... 17,953 430 18,383
Interest expense....................... 6,238 12,161 (2) 18,399
Other income........................... (508) -- (508)
------- -------- -------
Income before taxes...................... 12,223 (11,731) 492
Provision for state taxes................ 48 -- 48
------- -------- -------
Net income............................... $12,175 $(11,731) $ 444
======= ======== =======
</TABLE>
<TABLE>
<S> <C>
OTHER DATA:
EBITDA(3)............................................................ $23,255
Total depreciation and amortization.................................. 9,974
Net gain on sales of used rental equipment........................... 5,102
Total capital expenditures........................................... 41,573
Ratio of earnings to fixed charges (4)............................... 1.0x
Ratio of EBITDA to cash interest expense (3)......................... 1.5x
</TABLE>
30
<PAGE>
ANTHONY CRANE RENTAL HOLDINGS, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS FOR
HISTORICAL THE TRANSACTIONS PRO FORMA
<S> <C> <C> <C>
Revenues:
Equipment rentals...................... $156,408 $ -- $156,408
Equipment sales........................ 27,400 -- 27,400
-------- -------- --------
Total revenues....................... 183,808 -- 183,808
Cost of revenues:
Cost of equipment rentals.............. 97,036 -- 97,036
Cost of equipment sales................ 15,541 -- 15,541
-------- -------- --------
Total cost of revenues............... 112,577 -- 112,577
-------- -------- --------
Gross profit............................. 71,231 -- 71,231
Selling, general and administrative
expenses................................ 35,111 (613)(1) 34,498
-------- -------- --------
Income from operations................... 36,120 613 36,733
Interest expense....................... 13,962 22,836 (2) 36,798
Other income........................... (1,739) -- (1,739)
-------- -------- --------
Income before taxes...................... 23,897 (22,223) 1,674
Provision for state taxes................ 96 -- 96
-------- -------- --------
Net income............................... $ 23,801 $(22,223) $ 1,578
======== ======== ========
</TABLE>
<TABLE>
<S> <C>
OTHER DATA:
EBITDA (3)........................................................... $47,978
Total depreciation and amortization.................................. 21,904
Net gain on sales of used rental equipment........................... 10,659
Total capital expenditures........................................... 92,167
Ratio of earnings to fixed charges (4)............................... 1.0x
Ratio of EBITDA to cash interest expense (3)......................... 1.5x
</TABLE>
31
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
AND YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
(1) Reflects the following pro forma cost savings offset by the annual
management fee to be paid to Bain for consulting and financial services to
be provided to the Company. See "Certain Relationships and Related
Transactions--Advisory Agreement":
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
YEAR ENDED ENDED ENDED
1997 JUNE 30, 1997 JUNE 30, 1998
<S> <C> <C> <C>
Elimination of operating costs for
property distributed to majority
current owner ....................... $ (813) $ (532) $ (671)
Elimination of majority current
owner's life insurance costs......... (400) (200) (200)
Elimination of terminated employee
costs................................ (400) (198) (170)
Management fee to be paid to Bain..... 1,000 500 500
-------- ------- -------
Net decrease in selling, general and
administrative expenses.............. $ (613) $ (430) $ (541)
======== ======= =======
(2) The increase in pro forma interest expense as a result of the Transactions
is as follows:
<CAPTION>
SIX MONTHS SIX MONTHS
YEAR ENDED ENDED ENDED
1997 JUNE 30, 1997 JUNE 30, 1998
<S> <C> <C> <C>
Elimination of historical interest
expense.............................. $(13,962) $(6,238) $(8,620)
-------- ------- -------
Interest on new borrowings:
Senior Credit Facilities(a)........... 15,000 7,500 7,500
Senior Notes.......................... 16,081 8,041 8,041
-------- ------- -------
Cash interest expense............... 31,081 15,541 15,541
Debentures(b)......................... 3,350 1,675 1,675
Amortization of deferred financing
fees(c).............................. 2,367 1,183 1,183
-------- ------- -------
Total interest from the debt
requirements of the Transactions..... 36,798 18,399 18,399
-------- ------- -------
Net increase in interest expense...... $ 22,836 $12,161 $ 9,779
======== ======= =======
</TABLE>
- ---------------------
(a) Represents interest expense on bank debt at the LIBO option (assumed to
be 5.75%) plus: (i) 2.25% for the Revolving Credit Facility ($125,000)
as well as an unused commitment fee of 0.50% on the unused portion of
the Revolving Credit Facility ($150,000); and (ii) 2.75% for the Term
Loan ($50,000).
(b) The Debentures will accrete at an annual rate of 13 3/8% for the first
five years after issuance and will accrue interest at the same rate
thereafter.
(c) Represents the annual amortization expense assuming a weighted average
maturity on all borrowings of 8.4 years.
(3) Based on Holdings' pro forma EBITDA for the twelve-month period ended June
30, 1998 of $55.4 million, the pro forma ratio of EBITDA to cash interest
expense would be 1.8 to 1. Based on Holdings' pro forma EBITDA, pro forma
ratio of net debt (total debt less cash, excluding $12.2 million of cash
required to fund expected capital expenditures) to pro forma EBITDA would
be 6.4 to 1. EBITDA represents income from operations less the net gain on
sales of used rental equipment plus depreciation and amortization. EBITDA
is a widely accepted financial indicator of a company's ability to service
and incur debt. EBITDA does not represent net income or cash flows from
operations as those terms are defined by generally accepted accounting
principles ("GAAP") and does not necessarily indicate whether cash flows
will be sufficient to fund cash needs. The Company's measure of EBITDA may
not be comparable to those reported by other companies.
(4) For purposes of computing this ratio, earnings consist of income before
taxes plus fixed charges. Fixed charges consist of total interest expense,
the fixed dividend of 11% on the Holdings Preferred Units and the
estimated portion of rent expense.
32
<PAGE>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth selected historical consolidated financial
data of the Company for the five years ended December 31, 1997 and for the six
months ended June 30, 1998 and 1997. The selected historical consolidated
financial data for the five years ended December 31, 1997 were derived from
the audited consolidated financial statements of the Company which for the
three years ended December 31, 1997 are included elsewhere in this Prospectus,
together with the report thereon of PricewaterhouseCoopers LLP, independent
accountants. The selected historical consolidated financial data for the six
months ended June 30, 1997 and 1998 were derived from unaudited historical
consolidated financial statements of the Company. The following table should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the historical consolidated financial
statements and the notes related thereto of the Company included elsewhere in
this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
----------------------------------------------- --------------------
1993 1994 1995 1996 1997 1997 1998
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Revenues:
Equipment rentals...... $ 68,113 $ 85,369 $106,593 $128,161 $156,408 $ 73,693 $ 90,153
Equipment sales........ 4,814 7,762 9,419 19,444 27,400 16,160 9,396
-------- -------- -------- -------- -------- -------- --------
Total revenues.......... 72,927 93,131 116,012 147,605 183,808 89,853 99,549
Cost of revenues:
Cost of equipment
rentals............... 40,166 50,908 62,533 78,049 97,036 46,010 54,040
Cost of equipment
sales................. 3,345 5,206 7,039 13,643 15,541 10,295 7,687
-------- -------- -------- -------- -------- -------- --------
Total cost of revenues.. 43,511 56,114 69,572 91,692 112,577 56,305 61,727
Gross profit............ 29,416 37,017 46,440 55,913 71,231 33,548 37,822
Selling, general and
administrative
expenses............... 17,219 20,567 23,351 29,211 35,111 15,595 19,343
-------- -------- -------- -------- -------- -------- --------
Income from operations.. 12,197 16,450 23,089 26,702 36,120 17,953 18,479
Interest expense........ 3,961 6,281 8,482 10,873 13,962 6,238 8,620
Other (income) expense.. (125) 6 (104) (69) (1,739) (508) (470)
-------- -------- -------- -------- -------- -------- --------
Income before taxes..... 8,361 10,163 14,711 15,898 23,897 12,223 10,329
Provision (benefit) for
state taxes............ 438 154 583 (102) 96 48 60
-------- -------- -------- -------- -------- -------- --------
Net income.............. $ 7,923 $ 10,009 $ 14,128 $ 16,000 $ 23,801(1) $ 12,175(1) $ 10,269
======== ======== ======== ======== ======== ======== ========
OTHER DATA:
Net cash provided by
operating activities... $ 16,079 $ 22,410 $ 27,695 $ 32,411 $ 30,697 $ 11,000 $ 15,070
EBITDA(2)............... 23,221 28,724 38,922 44,836 47,365 22,825 30,162
Total depreciation and
amortization(3)........ 12,300 14,408 17,653 22,061 21,904 (1) 9,974(1) 12,615
Net gain on sales of
used rental equipment.. 1,276 2,134 1,820 3,926 10,659 5,102 932
Total capital
expenditures........... 33,735 42,496 45,241 82,673 92,167 42,938 55,839
Original cost of
property and
equipment.............. 159,581 197,264 238,544 295,405 361,772 326,400 402,989
Original cost of rental
equipment.............. 142,823 174,090 201,972 248,406 295,297 270,845 336,185
Ratio of earnings to
fixed charges(4)....... 3.1x 2.6x 2.7x 2.4x 2.5x 2.7x 2.1x
BALANCE SHEET DATA:
Cash and cash
equivalents............ $ 14,160 $ 6,646 $ 6,156 $ 8,588 $ 4,375 $ 4,501 $ 2,217
Total assets............ 144,581 164,576 196,053 241,239 306,928 267,950 338,700
Total debt.............. 71,808 94,427 108,000 140,000 185,961 159,333 211,916
Total liabilities....... 80,614 100,444 115,908 150,378 205,512 172,268 240,035
Total partners'
capital................ 63,967 64,132 80,145 90,861 101,416 95,682 98,665
</TABLE>
- ---------------------
(1) Reflects the decrease in depreciation expense of $5.7 million and $2.8
million for the year ended December 31, 1997 and for the six months ended
June 30, 1997, respectively, for the revision in estimated salvage values
used for depreciating certain rental equipment.
(2) EBITDA represents income from operations less the net gain on sales of
used rental equipment plus depreciation and amortization. EBITDA is a
widely accepted financial indicator of a company's ability to service and
incur debt. EBITDA does not represent net income or cash flows from
operations as those terms are defined by generally accepted accounting
principles ("GAAP") and does not necessarily indicate whether cash flows
will be sufficient to fund cash needs. The Company's measure of EBITDA may
not be comparable to those reported by other companies.
(3) Excludes amortization of deferred financing fees.
(4) For purposes of calculating the ratio of earnings to fixed charges,
"earnings" represents income before taxes plus fixed charges. "Fixed
charges" consist of interest expense, amortization of deferred financing
cost and the component of rental expense that management believes is
representative of the interest component of rental expense.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the more
detailed information and the historical consolidated financial statements and
pro forma consolidated financial data, including notes thereto, appearing
elsewhere in this Prospectus.
OVERVIEW
ACR is the largest crane rental company in North America. The Company's
primary source of revenue is the rental of cranes and lifting equipment for a
variety of applications, most of which involve industrial repair and
maintenance activity. Over the past thirty years, the Company has grown by
pursuing an operating philosophy focused on the crane and lifting equipment
needs of industrial companies in the petrochemical, paper, steel, utility,
mining and other industries, and major non-residential construction
contractors. In addition to its primary business of renting equipment, the
Company also derives revenue from sales of new equipment as a dealer for
selected manufacturers and used equipment as part of its fleet management
program. Equipment sales can fluctuate based on the Company's fleet management
program and market conditions. Fleet management, which is the process of
purchasing, dispatching, maintaining and selling rental equipment, is one of
the most critical operational elements for crane rental companies. The
Company's revenues are dependent on several factors, including the demand for
rental equipment, the amount of equipment available for rent, rental rates and
general economic conditions.
The Company's total revenues have increased by approximately 152.0% over the
past four years, and have increased in each of the past 31 years. Equipment
rental revenues increased by more than 20% in each of the last four years.
This revenue growth reflects several strengths of the Company. Most
importantly, ACR has the most extensive crane fleet and broadest geographic
coverage of any company in the highly fragmented U.S. crane rental industry.
Since 1995, the Company has grown by expanding its existing yards, opening new
yards and acquiring other crane rental companies. Typically, the costs
associated with the opening of new yards or the purchases of new equipment are
incurred up to 12 months prior to realizing the full benefit of the revenue
stream generated by such yards or equipment.
The Company is a limited partnership organized under the laws of
Pennsylvania, as a result of which (i) the Company is not itself subject to
federal and certain state (except for Texas) income tax, (ii) the taxable
income of the Company's businesses in the United States will be allocated to
the equity holders of Holdings, and (iii) such equity holders will be
responsible for income taxes on such taxable income. The Company intends to
make distributions to equity holders of Holdings to enable them to meet their
tax obligations with respect to income allocated to them by the Company.
Effective July 22, 1998, the Company completed a recapitalization whereby
the Company incurred new debt obligations, repaid its outstanding Senior Notes
and credit agreement obligations, restructured certain partnership interests
and distributed cash and property to the previous owners. See "The
Transactions" and "--Following the Recapitalization."
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997
Equipment Rental Revenues. Revenues from equipment rentals increased $16.5
million, or 22.3%, to $90.2 million for the six months ended June 30, 1998 as
compared to $73.7 million for the same period in the prior year. This increase
was largely due to the continued growth at the Company's existing yards,
reflecting the impact of the rental equipment purchased in 1997 and 1998 and
the start up of six rental yards opened in 1997, including three operations in
California which are beginning to reach targeted operating levels.
Equipment Sales. Revenues from equipment sales decreased $6.8 million, or
41.9%, to $9.4 million for the six month period ended June 30, 1998 as
compared to $16.2 million for the same period in the prior year. The majority
of the decrease was attributable to the Company's decision to reduce sales of
used equipment in connection with its fleet management program.
Total Revenues. Based on the foregoing, total revenues increased $9.6
million, or 10.8%, to $99.5 million for the six months ended June 30, 1998 as
compared to $89.9 million for the same period in the prior year.
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Gross Profit. Gross profit from equipment rentals increased $8.4 million, or
30.4%, to $36.1 million for the six months ended June 30, 1998 as compared to
$27.7 million for the same period in the prior year. The increase was
primarily the result of the increased equipment rental revenues as previously
discussed, offset in part by an increase in direct operating expenses
primarily associated with the rental yards opened during 1997. As a percent of
equipment rental revenues, gross profit from equipment rentals increased to
40.1% for the six months ended June 30, 1998 as compared to 37.6% for the same
period in the prior year. This increase in gross profit margin is primarily
attributable to improved profitability of the rental yards opened in 1997 as a
result of better equipment utilization and management's efforts to maintain
and control costs.
Gross profit from equipment sales decreased $4.2 million, or 70.9%, to $1.7
million for the six months ended June 30, 1998 as compared to $5.9 million for
the same period in the prior year. As a percent of equipment sales revenue,
gross profit declined to 18.2% for the six months ended June 30, 1998,
compared to 36.3% for the same period in the prior year. The gross profit and
gross margin percentage decreases were due to the Company's decision to sell a
lesser amount of used rental equipment under its fleet management program
during the six months ended June 30, 1998 compared to the same period in the
prior year, coupled with the unusually large margins obtained on the sale of
certain cranes in the six months ended June 30, 1997.
Based on the foregoing, total gross profit increased $4.3 million, or 12.7%,
to $37.8 million for the six months ended June 30, 1998 as compared to $33.5
million for the six months ended June 30, 1997.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $3.7 million, or 24.0%, to $19.3 million for
the six months ended June 30, 1998 as compared to $15.6 million for the same
period in the prior year. This increase was primarily attributable to an
increase in salaries and wages and related benefit costs associated with the
new yards opened during 1997. As a percent of total revenues, selling, general
and administrative expenses increased to 19.4% for the six months ended June
30, 1998 as compared to 17.4% for the same period in the prior year. The
increase in selling, general and administrative expenses as a percent of total
revenues was largely due to the decrease in revenues from equipment sales
during the six months ended June 30, 1998. As a percent of equipment rental
revenues, selling, general and administrative expenses were 21.5% for the six
months ended June 30, 1998 compared to 21.2% for the same period in the prior
year.
Earnings Before Interest, Taxes, Depreciation and Amortization. EBITDA (as
defined to exclude net gains on sales of used equipment) increased $7.3
million, or 32.1%, to $30.1 million for the six months ended June 30, 1998,
compared to $22.8 million for the same period in the prior year. EBITDA from
equipment rentals (as defined to equal revenues from equipment rentals, less
costs of equipment rentals, less selling, general and administrative expenses,
plus depreciation and amortization) increased $7.3 million, or 33.2%, to $29.4
million for the six months ended June 30, 1998, compared to $22.1 million for
the same period in the prior year. As a percent of equipment rental revenues,
EBITDA from equipment rentals increased to 32.6% for the six months ended June
30, 1998, compared to 29.9% for the same period in the prior year. This
increase is primarily due to the equipment rental revenue factors discussed
above.
Interest Expense. Interest expense increased $2.4 million, or 38.2%, to $8.6
million for the six months ended June 30, 1998, compared to $6.2 million for
the same period in the prior year. This increase reflected the higher level of
borrowings outstanding attributable to the Company's continued investment in
rental equipment and the opening of new yards.
Other Income. Other income remained relatively constant totaling $0.5
million for the six months ended June 30, 1998 and 1997.
Net Income. Net income decreased $1.9 million, or 15.7%, to $10.3 million
for the six months ended June 30, 1998, compared to $12.2 million for the same
period in the prior year as a result of the factors discussed above.
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YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED DECEMBER 31, 1996
Equipment Rental Revenues. Revenues from equipment rentals increased $28.2
million, or 22.0%, to $156.4 million for the year ended December 31, 1997,
compared to $128.2 million for the year ended December 31, 1996. This increase
was largely due to the continued growth at the Company's existing rental yards
as a result of new rental equipment purchased in 1997, rental equipment
purchased in 1996 becoming more fully utilized and the start-up of six rental
yards, including three yards in California.
Equipment Sales. Revenues from equipment sales increased $8.0 million, or
40.9%, to $27.4 million for the year ended December 31, 1997 as compared to
$19.4 million for the year ended December 31, 1996. This increase was
primarily attributable to significantly higher levels of activity in the
Company's fleet management program through upgrading the fleet and selling
older and under-utilized cranes.
Total Revenues. Based on the foregoing, total revenues for the year ended
December 31, 1997 increased $36.2 million, or 24.5%, to $183.8 million as
compared to total revenues of $147.6 million for the prior year.
Gross Profit. Gross profit from equipment rentals increased $9.3 million, or
18.5%, to $59.4 million for the year ended December 31, 1997 as compared to
$50.1 million for the year ended December 31, 1996. The increase in gross
profit from equipment rentals was the result of the increased revenues as
previously discussed, offset in part by an increase in direct operating
expenses, primarily attributable to equipment lease expense (relating to a
sale/leaseback transaction in December 1996) of $3.2 million, or 2.0% of total
equipment rental revenues, as well as new yards opened in 1997. Gross profit
from equipment rentals was also impacted by the Company's decision in 1997 to
revise its estimate of the salvage values used for depreciating certain rental
equipment, which had the effect of improving gross profit by $5.7 million,
offset in part by an increase in depreciation expense of $5.4 million as a
result of the significant capital expenditures incurred in 1997 and 1996. As a
percent of equipment rental revenues, gross profit decreased to 38.0% for the
year ended December 31, 1997 from 39.1% for the year ended December 31, 1996.
This decrease was primarily attributable to the factors discussed above.
Gross profit from equipment sales increased $6.1 million, or 104.4%, to
$11.9 million for the year ended December 31, 1997 as compared to $5.8 million
for the year ended December 31, 1996. As a percent of equipment sales revenue,
gross profit increased to 43.3% for the year ended December 31, 1997, from
29.8% for the year ended December 31, 1996. These increases were attributable
to the increased equipment sales revenues, as previously discussed as well as
the unusually high margins earned on certain equipment sales during 1997.
Based on the foregoing, total gross profit increased $15.3 million, or
27.4%, to $71.2 million for the year ended December 31, 1997 as compared to
$55.9 million for the year ended December 31, 1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $5.9 million, or 20.2%, to $35.1 million for
the year ended December 31, 1997 compared to $29.2 million for the year ended
December 31, 1996. This increase was primarily attributable to increased
salaries and wages and employee benefits associated with the new yards opened
during 1997. As a percent of total revenues, selling general and
administrative expenses decreased to 19.1% of total revenues for the year
ended December 31, 1997 as compared to 19.8% of total revenues for the year
ended December 31, 1996. The decrease in selling, general and administrative
expenses as a percent of total revenues was largely due to the significant
increase in revenues from equipment sales during 1997. As a percent of
equipment rental revenues, selling, general and administrative expenses
decreased to 22.4% for the year ended December 31, 1997 as compared to 22.8%
for the year ended December 31, 1996.
Earnings Before Interest, Taxes, Depreciation and Amortization. EBITDA (as
defined to exclude net gains on sales of used equipment) increased $2.6
million, or 5.6%, to $47.4 million for the year ended December 31, 1997 as
compared to $44.8 million for the year ended December 31, 1996. EBITDA from
equipment rentals (as defined to equal revenues from equipment rentals, less
costs of equipment rentals, less selling, general and administrative expenses,
plus depreciation and amortization) increased $3.2 million, or 7.5%, to $46.2
million
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for the year ended December 31, 1997 as compared to $43.0 million for the year
ended December 31, 1996. These increases were primarily attributable to the
increase in rental revenues, as previously discussed. As a percent of
equipment rental revenues, EBITDA from equipment rentals decreased to 29.5%
for the year ended December 31, 1997 as compared to 33.5% for the year ended
December 31, 1996. This decrease was primarily attributable to the increase in
equipment lease expense as a result of a sale/leaseback transaction in
December 1996, as well as the new rental yards opened in 1997.
Interest Expense. Interest expense increased $3.1 million, or 28.4%, to
$14.0 million for the year ended December 31, 1997 as compared to $10.9
million for the year ended December 31, 1996. This increase reflected the
higher level of borrowings outstanding attributable to the Company's continued
investment in rental equipment and the new rental yards opened during 1997.
Other Income. Other income increased $1.6 million to $1.7 million for the
year ended December 31, 1997 as compared to $0.1 million for the year ended
December 31, 1996. This increase was primarily the result of a gain on the
sale of property purchased for resale by the Company.
Net Income. Net income increased $7.8 million, or 48.8%, to $23.8 million
for the year ended December 31, 1997 as compared to $16.0 million for the year
ended December 31, 1996. This increase reflected the factors discussed above.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR ENDED DECEMBER 31, 1995
Equipment Rental Revenues. Revenues from equipment rentals increased $21.6
million, or 20.2%, to $128.2 million for the year ended December 31, 1996 as
compared to $106.6 million for the year ended December 31, 1995. The increase
in equipment rental revenues was attributable to the Company's increased
revenues at existing locations and its continued expansion efforts. During
1996, the Company opened a rental facility in California and expanded its
national accounts program by obtaining a long-term contract with a customer.
Equipment Sales. Revenues from equipment sales increased $10.0 million, or
106.4%, to $19.4 million for the year ended December 31, 1996 as compared to
$9.4 million for the year ended December 31, 1995. This increase was
principally attributable to the resale of rental equipment purchased in
connection with the contract discussed above and the effects of the Company's
existing fleet management program.
Total Revenues. Based on the foregoing, total revenues increased $31.6
million, or 27.2%, to $147.6 million for the year ended December 31, 1996 as
compared to $116.0 million for the year ended December 31, 1995.
Gross Profit. Gross profit from equipment rentals increased $6.0 million, or
13.7%, to $50.1 million for the year ended December 31, 1996 as compared to
$44.1 million for the year ended December 31, 1995, primarily as a result of
the increased revenues previously discussed. As a percent of equipment rental
revenues, the gross profit from equipment rentals decreased to 39.1% for the
year ended December 31, 1996 from 41.3% for the year ended December 31, 1995.
The key factor contributing to this decrease was an increase in direct
operating expenses due to a management initiative to upgrade the Company's
ongoing preventive maintenance and inspection program.
Gross profit from equipment sales increased $3.4 million, or 143.7%, to $5.8
million for the year ended December 31, 1996 as compared to $2.4 million for
the year ended December 31, 1995. This increase was primarily attributable to
the increased level of equipment sales, as discussed above. As a percent of
equipment sales revenues, gross profit increased to 29.8% for the year ended
December 31, 1996 as compared to 25.3% for the year ended December 31, 1995.
This increase was primarily due to the margins generated on the equipment
purchased and subsequently resold in connection with the contract discussed
above.
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Based on the foregoing, total gross profit increased $9.5 million, or 20.4%,
to $55.9 million for the year ended December 31, 1996 as compared to $46.4
million for the year ended December 31, 1995.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $5.9 million, or 25.1%, to $29.2 million for
the year ended December 31, 1996 as compared to $23.4 million for the year
ended December 31, 1995. This increase was attributable to increased salaries
and wages and travel expenses related to the new locations opened in 1996 and
1995. As a percent of total revenues, selling, general and administrative
expenses decreased to 19.8% for the year ended December 31, 1996 as compared
to 20.1% for the year ended December 31, 1995.
Earnings Before Interest, Taxes, Depreciation and Amortization. EBITDA (as
defined to exclude net gains on sales of used equipment) increased $5.9
million, or 15.2%, to $44.8 million for the year ended December 31, 1996 as
compared to $38.9 million for the year ended December 31, 1995. This increase
was primarily attributable to the increased revenues discussed above. EBITDA
from equipment rentals (as defined to equal revenues from equipment rentals,
less costs of equipment rentals, less selling, general and administrative
expenses, plus depreciation and amortization) increased from $38.4 million in
1995 to $43.0 million in 1996, an increase of 12.0%. As a percent of equipment
rental revenues, EBITDA from equipment rentals decreased from 36.0% in 1995 to
33.5% in 1996. This decrease was principally attributable to the changes in
gross profit and selling, general and administrative expenses discussed above.
Interest Expense. Interest expense increased $2.4 million, or 28.2%, to
$10.9 million for the year ended December 31, 1996 as compared to $8.5 million
for the year ended December 31, 1995. This increase was reflective of the
Company's higher levels of borrowings to finance the continued growth of the
Company.
Net Income. Net income increased $1.9 million, or 13.3%, to $16.0 million
for the year ended December 31, 1996 as compared to $14.1 million for the year
ended December 31, 1995 as a result of the factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
HISTORICAL
During the six months ended June 30, 1998 and the years ended December 31,
1997, 1996 and 1995, the Company's primary sources of funds consisted of net
cash provided by operating activities, proceeds from the sale of fixed assets,
including rental equipment and borrowings under its Former Credit Agreement.
Additionally, in 1996, proceeds of $24.1 million were received from a
sale/leaseback transaction, and in 1997, $59.0 million in proceeds from the
issuance of privately placed senior notes. Net cash provided by operating
activities for the six months ended June 30, 1998 increased $4.1 million, or
37.0%, to $15.1 million from $11.0 million for the same period in the prior
year. This increase was primarily the result of an increase in income from
operations before consideration of non-cash components of net income. Net cash
provided by operating activities for the year ended December 31, 1997 declined
to $30.7 million from $32.4 million as a result of an increase in working
capital partially offset by an increase in net income. Net cash provided by
operations for the year ended December 31, 1996 increased 17.0% to $32.4
million from $27.7 million in 1995. This increase is primarily the result of
increased net income and an increase in certain operating liabilities.
For the six months ended June 30, 1998, the Company's principal use of cash
for investing activities was for capital expenditures, primarily the purchase
of rental equipment for the Company's fleet. Total capital expenditures for
the six months ended June 30, 1998 increased $4.0 million, or 10.4%, to $42.5
million, compared to $38.5 million for the same period in the prior year. Of
those amounts, $35.1 million and $29.4 million, respectively, reflected the
purchases of rental equipment both to increase the size of the Company's fleet
and to replace sold used rental equipment. Proceeds from the sale of fixed
assets, including rental equipment, for the six months ended June 30, 1998
decreased $11.3 million, or 68.6%, to $5.1 million from $16.4 million for the
same period in the prior year.
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For the six months ended June 30, 1998 and 1997, net cash provided by
financing activities was $14.1 million and $10.8 million, respectively. The
increase in net cash provided by financing activities was due to an increase
in net borrowings to fund capital expenditures, offset by an increase in
partner withdrawals.
During the years ended December 31, 1997, 1996 and 1995, the Company's
principal uses of cash for investing activities, were for capital
expenditures, including expenditures for rental equipment. Total capital
expenditures during these periods were $85.6 million, $81.2 million and $44.8
million, respectively. Included in these totals were expenditures for rental
equipment totaling $64.2 million, $77.0 million, and $37.0 million,
respectively. These expenditures were made to increase the Company's total
investment in the rental fleet and to replace sold used rental equipment.
Total proceeds from the sale of fixed assets, including rental equipment,
increased 170.2% to $22.5 million for the year ended December 31, 1997 from
$8.3 million for the year ended December 31, 1996. Total proceeds from the
sale of fixed assets, including rental equipment, totaled $7.7 million for the
year ended December 31, 1995.
For the year ended December 31, 1997, net cash provided by financing
activities was $32.1 million compared to $26.4 million and $8.7 million for
the years ended December 31, 1996 and 1995, respectively. The increases in
1997 and 1996 were due to higher net borrowings to fund capital expenditures
and acquisitions, offset by an increase in partner withdrawals compared to
1995.
The Company has no long-term minimum purchase commitments for rental
equipment. Management has budgeted $95 million for gross fleet capital
expenditures for 1998. These expenditures will be partially offset by expected
proceeds from the sale of used equipment. The Company also expects to spend
approximately $8.0 million in 1998 on non-rental related capital expenditures
consisting of buildings, land, furniture and fixtures and machinery and tools.
In addition to the budgeted capital expenditures, the Company is currently
considering several potential acquisitions, although the Company does not
currently have any agreements with respect to the potential acquisitions. In
1997, the Company incurred approximately $3.1 million related to a
sale/leaseback transaction entered into in December 1996. This transaction
will require annual payments of approximately $3.1 million through January,
2004.
The Company has incurred substantial indebtedness to finance its growth. At
June 30, 1998, the Company had total indebtedness outstanding of $211.0
million, exclusive of capital lease obligations. The Company's current debt
agreements contain various covenants related to the maintenance of certain
financial ratios, tangible net worth, additional indebtedness, fixed charges
and maintenance of cash balances.
The Company believes the cash provided by operations, proceeds from the sale
of used equipment in the ordinary course of business and funds available under
the Senior Credit Facilities will be sufficient to permit the Company to meet
its indebtedness obligations as well as to meet its anticipated capital
expenditures as described above.
FOLLOWING THE RECAPITALIZATION
In connection with the Recapitalization, Holdings and the Company incurred
significant amounts of debt with interest and principal repayments on the
Debentures, the Senior Notes and under the Senior Credit Facilities
representing significant obligations of Holdings and the Company. Holdings'
operations are conducted through its subsidiaries and Holdings is, therefore,
dependent upon the cash flow of its subsidiaries, including the Company, to
meet its debt service obligations. The Company's liquidity needs relate to
working capital, capital expenditures and potential acquisitions. See "Risk
Factors--Limitation on the Payment of Funds to Holdings by its Subsidiaries."
The Company intends to fund its working capital, capital expenditures and
debt service requirements through cash flows generated from operations and
borrowings under the Senior Credit Facilities. The Senior Credit Facilities
consist of a $275.0 million, non-amortizing Revolving Credit Facility of which
a net amount of $125.0 million was drawn at the Closing, and a $50.0 million
non-amortizing Term Loan. Amounts under the Revolving Credit Facility will be
available on a revolving basis during the period commencing on the date of the
Closing and ending on the sixth anniversary of the Closing.
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The Senior Credit Facilities, the Senior Notes and the Debentures contain
certain covenants that limit, among other things, the ability of the Company
to: (i) make distributions, redeem partnership interests or make certain other
restricted payments or investments other than distributions to pay taxes; (ii)
incur additional indebtedness or issue preferred equity interests; (iii)
merge, consolidate or sell all or substantially all of its assets; (iv) create
liens on assets; and (v) enter into certain transactions with affiliates or
related persons. In addition, the Senior Credit Facilities require the Company
to maintain specified financial ratios and tests, among other obligations,
including a minimum interest coverage ratio.
IMPACT OF YEAR 2000 ISSUE
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the
Company's computer programs or hardware that have date-sensitive software or
embedded chips may recognize a date using "00" as the year 1900 rather than
the year 2000. This could result in a system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices, or engage in similar normal
business activities.
Based on recent assessments, the Company determined that its information
technology systems will require modification or replacement of portions of
hardware and software so that those systems will properly utilize dates beyond
December 31, 1999. The Company presently believes that with modifications and
replacement of existing hardware and software, the Year 2000 Issue can be
mitigated. However, if such modifications and replacements are not made, or
are not completed timely, the Year 2000 Issue could have a material impact on
the operations of the Company. The Company does not have any significant non-
information technology systems.
The Company will utilize both internal and external resources to reprogram,
or replace, test, and implement the software and hardware for Year 2000
modifications. The total cost of the Year 2000 project is estimated at
$650,000 and is being funded through operating cash flows. To date, the
Company has incurred approximately $600,000 for new systems and equipment,
which all has been capitalized. The total remaining project costs of
approximately $50,000 are attributable to the purchase of new operating
equipment, which will be capitalized.
The Company's plan to complete the Year 2000 modifications are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events including the continued availability of certain resources,
and other factors. Estimates on the status of completion and the expected
completion dates are based on costs incurred to date compared to total
expected costs. However, there can be no guarantee that these estimates will
be achieved and actual results could differ materially from those plans.
Specific factors that might cause such material differences include, but are
not limited to, the availability and cost of personnel trained in this area,
the ability to locate and correct all relevant computer codes, and similar
uncertainties.
The Company's plan to resolve the Year 2000 Issue involves four phases:
assessment, remediation, testing, and implementation. To date, the Company has
fully completed its assessment of all material systems that could be affected
by the Year 2000 Issue. The completed assessment indicated that most of the
Company's significant information technology systems could be affected.
Further, the Company conducts a significant portion of its purchase
transactions with vendors involved in the business of crane and lifting
equipment manufacturing and repair. If these vendors are not Year 2000 ready,
the Company's ability to service its crane rental customers could be impaired.
For its information technology exposures, to date, the Company is 95%
complete on the remediation phase for all material systems and expects to
complete software reprogramming and replacement no later than October 1998.
After completing the reprogramming and replacement of software, the Company's
plans call for testing and implementing its information technology systems.
Completion of the testing phase is expected by November 1998, with all
remediated systems fully implemented by December 1998.
With respect to third parties, the Company does not utilize systems that
interface directly with significant vendors. The Company has queried its
important vendors, and to date, the Company is not aware of any problems
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that would materially impact results of operations, liquidity, or capital
resources. The Company has no means of ensuring that their vendors will be
Year 2000 ready. The inability of those parties to complete their Year 2000
resolution process could materially impact the Company.
INFLATION AND CYCLICALITY
Although the Company cannot accurately anticipate the effect of inflation on
its operations, it does not believe that inflation has had, or is likely in
the foreseeable future to have, a material impact on its results of
operations. The Company's operating results may be adversely affected by
events or conditions in a particular region, such as regional economic,
weather and other factors. In addition, the Company's operating results may be
adversely affected by increases in interest rates that may lead to a decline
in economic activity, while simultaneously resulting in higher interest
payments by the Company under its variable rate credit facilities.
Although much of the Company's business is with customers in industries that
are cyclical in nature, management believes that certain characteristics of
the crane rental industry and the Company's operating strategies should help
to mitigate the effects of an economic downturn. These characteristics
include: (i) the flexibility and low cost offered to customers by renting,
which may be a more attractive alternative to capital purchases; (ii) the
Company's ability to relocate equipment during regional recessions; (iii) the
Company's high percentage of industrial customers who frequently rent cranes
for regularly scheduled, non-deferrable plant maintenance activities; and (iv)
the diversity of the Company's industry and customer base.
SUPPLEMENTARY FINANCIAL INFORMATION
The following table presents unaudited quarterly operating results for each
of the Company's last ten quarters as well as the percentage of the Company's
total revenues represented by each item. This information has been prepared by
the Company on a basis consistent with the Company's audited consolidated
financial statements and includes all adjustments (consisting only of normal
recurring adjustments) that management considers necessary for a fair
presentation of the data. These quarterly results are not necessarily
indicative of future results of operations. This information should be read in
conjunction with the Company's consolidated financial statements and notes
thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------- ------------- ------------- -------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996:
Total revenues.......... $29,790 100.0% $34,663 100.0% $39,948 100.0% $43,204 100.0%
Gross profit............ 11,599 38.9 13,486 38.9 14,072 35.2 16,756 38.8
Income before income
taxes.................. 3,322 11.2 4,178 12.1 3,395 8.5 5,003 11.6
Net income.............. 3,342 11.2 4,205 12.1 3,417 8.6 5,036 11.7
1997:
Total revenues.......... $45,575 100.0% $44,278 100.0% $49,319 100.0% $44,636 100.0%
Gross profit............ 17,384 38.2 16,164 36.5 20,757 42.1 16,926 37.9
Income before income
taxes.................. 7,629 16.8 4,594 10.4 7,323 14.9 4,351 9.8
Net income.............. 7,599 16.7 4,576 10.3 7,293 14.8 4,333 9.7
1998:
Total revenues.......... $48,463 100.0% $51,086 100.0% -- -- -- --
Gross profit............ 17,551 36.3 20,271 39.7 -- -- -- --
Income before income
taxes.................. 4,564 9.5 5,765 11.3 -- -- -- --
Net income.............. 4,504 9.3 5,765 11.3 -- -- -- --
</TABLE>
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," which establishes standards for reporting and
displaying comprehensive income and its components. SFAS No. 130 requires that
all items
41
<PAGE>
that are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. The provisions of SFAS
No. 130 have been adopted in the six month period ended June 30, 1998 and all
years presented have been adjusted to reflect the adoption.
The FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," which establishes standards for the way that public
business enterprises report information about operating segments in annual
financial statements and related disclosures about products and services,
geographic areas and major customers. SFAS No. 131 is effective for fiscal
years beginning after December 15, 1997. Accordingly, the Company is not
required to adopt this standard until the fiscal year ending December 31,
1998. Management is currently evaluating the impact of this standard on the
consolidated financial statements.
The FASB issued SFAS No. 132, "Employers' Disclosures about Pensions and
Other Postretirement Benefits," which revises employers' disclosures about
pension and other postretirement benefit plans by standardizing the disclosure
requirements for pensions and other postretirement benefits to the extent
practicable, requiring additional information on changes in the benefit
obligations and fair values of plan assets that will facilitate financial
analysis, and eliminating certain disclosures that are no longer as useful.
SFAS No. 132 is effective for fiscal years beginning after December 15, 1997.
Accordingly, the Company is not required to adopt this standard until the
fiscal year ending December 31, 1998. Management is currently evaluating the
impact of this standard on the consolidated financial statements.
42
<PAGE>
BUSINESS
Anthony Crane Rental, L.P. is the largest provider of comprehensive crane
and lifting equipment rentals and services in North America. ACR is the only
national crane rental company in the highly fragmented U.S. crane rental
industry. The Company has a network of 25 crane rental yards that provide
services to over 8,000 customers in 41 states, Mexico and the Caribbean. The
Company owns approximately 2,400 pieces of lifting equipment, ranging from
1,000-ton mobile cranes to two-person aerial work platforms. The Company
believes that its crane fleet represented approximately 15% of the total U.S.
crane rental fleet in 1997. While its primary business is the rental of crane
and lifting equipment, approximately 15% of the Company's 1997 revenues were
derived from sales of new and used equipment. The Company has achieved 31
consecutive years of revenue growth and compound annual growth rates of
revenues and EBITDA (as defined) from 1993 to 1997 of 26.0% and 19.5%,
respectively. For the twelve months ended June 30, 1998, on a pro forma basis,
ACR generated revenues and EBITDA of $193.5 million and $55.4 million,
respectively.
ACR was founded by Ray G. Anthony, who entered the crane rental business in
1966 when he took over the family business, a small scrap yard south of
Pittsburgh. Mr. Anthony initially purchased a crane to facilitate moving scrap
metal and shortly thereafter began receiving calls from parties interested in
renting the crane. As such calls became more frequent, Mr. Anthony purchased
additional cranes and incorporated Anthony Crane Rental, Inc. in 1973. Since
that time, the Company has grown largely through controlled and disciplined
geographic expansion.
OPERATING PHILOSOPHY
The Company has grown by pursuing an operating philosophy focused on serving
the crane and lifting needs of industrial customers in the petrochemical,
paper, steel, utility, mining and multiple other industries. These industrial
customers, which accounted for approximately 70% of the Company's 1997 rental
revenues, frequently rent cranes for regularly scheduled, non-deferrable plant
maintenance activities. These projects can require up to 100 cranes of varying
sizes at any one time and are often extremely time-sensitive because they
interrupt plant operations. As a result, industrial customers value
reliability, availability, safety and operator experience more than certain
other factors. The Company believes that its industrial customer base provides
stable crane rental demand as such customers tend to require a certain level
of predictable and necessary plant maintenance regardless of economic
conditions. The Company has also been successful in serving the needs of
construction contractors, which accounted for approximately 30% of 1997 rental
revenues. These construction customers rent cranes primarily for large, long-
term public infrastructure and commercial construction projects which are
generally not deferred once started.
CRANE RENTAL INDUSTRY
The crane rental industry is an estimated $750 million market within the $16
billion general equipment rental industry. The general equipment rental
industry has grown at a compound annual growth rate of approximately 15% from
1991 to 1996. This growth has been driven by a combination of underlying end-
user growth and a trend toward outsourcing non-core operations in order to:
(i) reduce their capital investments; (ii) gain access to specialized
equipment on an economic basis; (iii) meet safety standards; and (iv) minimize
the downtime, maintenance, repair, storage and other operating costs
associated with equipment ownership.
Growth in the crane rental industry has resulted from factors similar to
those driving growth in the general equipment rental industry, particularly
the trend toward further outsourcing. Rental companies are able to provide
customers with savings relative to owning cranes by capitalizing on volume-
driven equipment purchase discounts and high utilization rates. As evidence of
the outsourcing trend, the Company believes that approximately 80% of new
cranes sold in 1997 were purchased directly for the rental market,
representing an increase from 40% in the early 1980s. However, the Company
believes rental companies own less than one-half of the total installed base
of cranes in the United States. Management believes there is substantial
growth potential from the continued outsourcing of lifting equipment as an
increasing number of end users assess the "rent versus buy" decision.
43
<PAGE>
Generally, cranes are rented by two sets of customers: (i) industrial
customers who typically use cranes for regularly-scheduled, non-deferrable
plant maintenance activities; and (ii) contractors who generally utilize
cranes in public infrastructure or commercial construction projects. Crane
lifting services are required in many plant maintenance and construction
projects but typically represent only a small fraction of a project's total
cost. In addition, plant maintenance programs often require the suspension of
production. Consequently, effective, timely and safe crane operation is
critical to avoid prolonged, costly production suspensions and construction
delays. As a result, crane rental companies are held to stringent safety,
availability and uptime standards and well trained, experienced operators and
lifting expertise are highly valued. As crane rental customers weigh the
average cost of crane rental relative to the all-in-cost of ownership, safety
violations and lengthened project delays or plant shutdowns, they typically
value reliability, availability, safety record and technical skill over other
factors.
The crane rental industry is highly fragmented and is served by a distinct
set of companies who focus almost exclusively on crane and lifting equipment
rental. ACR generally competes with a small number of regional crane rental
companies (who typically own less than 200 cranes) and hundreds of local crane
rental companies (who typically own less than 50 cranes). Management believes
that general equipment rental companies have not significantly participated in
the crane rental market because they are less able to meet the broad needs of
crane rental customers for several reasons, including: (i) the high levels of
expertise and commitment required to provide a full range of value-added
lifting services, such as highly qualified, well trained operators and lift
planning; (ii) the substantial amount of capital dedicated to cranes and
lifting equipment required to provide the fleet size and selection necessary
to meet the broad demands of larger customers; and (iii) the significant
maintenance programs required to ensure equipment reliability and safety.
Given the unique characteristics and fragmentation of the crane rental
industry, management believes there are substantial opportunities for ACR to
leverage its competitive advantages and further increase its market share
through geographic expansion and consolidation.
COMPETITIVE STRENGTHS
ACR believes that it benefits from the following competitive strengths:
LEADING MARKET POSITION AND NATIONAL SCOPE. ACR is the largest and only
national provider of comprehensive crane and lifting equipment rentals and
services in the United States. The Company estimates that its crane fleet
represented approximately 15% of the total U.S. crane rental fleet in 1997.
According to industry estimates, the Company's crane rental fleet is
significantly larger than that of its next largest competitor. Management
believes that, relative to the Company, most local and regional crane rental
competitors lack the fleet size necessary to provide customers with comparable
selection and availability. Furthermore, ACR's national scope, together with
the mobile nature of its fleet, affords it the ability to move assets in
response to varying levels of regional or seasonal demand and thus maximize
its fleet utilization.
LOW COST POSITION. ACR's leadership position results in economies of scale,
which management believes provide significant cost savings relative to its
competitors and thus allow the Company to provide superior services at
competitive prices. ACR's low cost position results from a number of factors.
First, ACR is the largest non-government buyer of cranes in the United States
and consequently benefits from volume-driven purchase discounts. Second, ACR
achieves superior utilization rates for its equipment due to its broad
customer base and ability to move equipment among both yards and regions.
Third, ACR realizes greater efficiency in its maintenance operations, which
enables the Company to realize longer equipment lives than many of its
competitors. Finally, ACR spreads operating and corporate overhead costs over
a larger revenue base. As a result of these advantages, management believes
that the Company generally earns higher margins and returns on its equipment
investments than its smaller local and regional competitors.
EMPHASIS ON INDUSTRIAL CUSTOMERS. The Company focuses on serving the crane
and lifting needs of industrial customers, who frequently rent cranes for
regularly scheduled, non-deferrable plant maintenance activities. Industrial
usage accounted for approximately 70% of the Company's rental revenues in
1997. Management believes that, relative to its competitors, ACR is better
positioned to serve industrial customers for
44
<PAGE>
several reasons. First, ACR meets the quantity, availability and reliability
requirements of large industrial customers with its broad, well maintained
fleet which includes larger and more specialized cranes required for major
plant maintenance jobs and special applications. Second, the Company offers a
full range of lifting services and experienced crane operators, which are
increasingly important as customers outsource more of their crane and lifting
needs. Last, ACR minimizes downtime on a customer's site through both
preventative maintenance and field repair/replacement services. The Company
believes that its industrial customer base provides stable crane rental demand
as such customers tend to require a certain level of predictable and necessary
plant maintenance regardless of economic conditions.
MODERN, WELL MAINTAINED CRANE FLEET. ACR has a modern, well maintained fleet
with an average age of approximately five years as of June 30, 1998. From
January 1, 1994 through June 30, 1998, the Company has invested approximately
$266 million in rental equipment. As a result of these capital investments,
the Company has expanded its rental fleet by approximately 1,500 units over
such four and one half year period. In addition, ACR spent over $13 million on
expensed fleet maintenance during 1997 and $7 million for the six months ended
June 30, 1998, in order to maintain the value of its fleet and exceed
industry-accepted safety and reliability standards. By regularly inspecting
its cranes and investing in preventive maintenance, ACR is able to minimize
costly field repairs and downtime on customer sites. Management believes that
its strong maintenance programs enhance the long-term value of its cranes over
their 15 to 25 year average lives. From 1994 to 1997, ACR sold its used
equipment for an average of greater than 90% of its original cost.
SUPERIOR FLEET MANAGEMENT. The Company believes that a key factor
contributing to its ability to generate consistent returns and strong resale
values on its rental fleet investment has been its proactive fleet management
program. Through this program, the Company uses a tracking system to monitor
and maximize asset utilization on a crane-by-crane basis. The Company's fleet
management program facilitates decisions regarding: (i) asset mix at
individual yards; (ii) movements of equipment on an intra-regional and inter-
regional basis; and (iii) relocation or divestiture of underperforming assets.
Management believes that as a result of its effective fleet management and
high utilization rates, the Company has generated consistent returns on its
fleet investment.
COMPREHENSIVE CRANE AND LIFTING EXPERTISE. Over its 30-year history, the
Company has developed significant lifting expertise. The Company provides a
full range of turnkey lift planning and execution services, including job
specification, equipment selection and skilled crane operation and rigging.
The Company's regional managers average over 27 years of crane rental
experience. The Company maintains a Crane Specialist at each yard and has
several special situation experts throughout its organization who typically
have many years of lifting and crane operating experience. In addition, the
Company believes that it has the ability to attract and retain superior
operators which allows it to strengthen customer relationships and provide
superior execution. ACR believes that its long history and reputation as a
crane expert and total lifting solution provider represents a significant
competitive advantage, and the majority of the Company's rentals include the
value-added services described above.
DIVERSE CUSTOMER BASE. The Company believes its diverse customer base
mitigates the impact of an economic downturn related to a particular customer,
industry or geographic region. In 1997, ACR served over 8,000 customers in 41
states, Mexico and the Caribbean. Examples of the Company's key customers
include: Hess Oil, USX Corp., Mobil Corp., Huntsman Corp., Florida Power and
Light Co., International Paper Co., Procter & Gamble Co. and Bayer AG. No
customer accounted for greater than 2% of the Company's rental revenues in
1997, other than a single industrial customer who represented 7% of 1997
rental revenues and for whom the Company provides fleet management services
under the terms of an exclusive contract. The Company's customers cover a wide
spectrum of industries, and management estimates that of the end-user groups
for which it records data, no single industry accounted for more than 13% of
rental revenues in 1997. Additionally, no single region accounted for greater
than 28% of the Company's 1997 rental revenues.
BUSINESS STRATEGY
ACR's business strategy is to serve the crane and lifting needs of
industrial and other large customers by providing a broad selection of modern,
well maintained lifting equipment, comprehensive lift planning and
45
<PAGE>
execution services and highly qualified, well trained operators. The Company's
leading market position and track record of profitable internal growth are
attributable to the successful implementation of this business strategy. ACR
intends to achieve further growth and strengthen its competitive position
through the continued implementation of this strategy and the following
initiatives:
LEVERAGE MARKET LEADERSHIP POSITION. The Company intends to leverage its
leadership position and build on its track record of profitable internal
growth. From 1993 to 1997, ACR achieved a compound annual revenue growth rate
of 26.0% primarily through internal growth. The Company intends to continue
this growth by: (i) expanding sales in existing yards through equipment
additions and marketing efforts targeted at new and existing customers; (ii)
opening satellite yards in contiguous geographic areas; and (iii) opening
greenfield yards in selected noncontiguous markets.
EMPHASIZE LONG-TERM CUSTOMER RELATIONSHIPS. Management believes that its
customers value the broad range of equipment and services that the Company
provides and many of its customers use ACR for predominantly all of their
lifting needs. The strength of ACR's customer relationships is evidenced by
the fact that 23 of the Company's top 25 customers in 1997 have been major
customers in each of the last five years. The Company capitalizes on its
presence on a customer's site by proactively anticipating and pursuing
incremental equipment rental opportunities and continuously strengthening this
customer relationship. In addition, as the only national provider of crane
rental services, the Company believes that it is uniquely positioned to serve
customers across multiple locations.
COMPLETE CALIFORNIA ROLLOUT. ACR intends to continue to invest in the Los
Angeles and San Diego markets, which it entered in 1997 with three new rental
yards. During the initial stages of infrastructure buildout, the Company
incurred significant start-up costs and experienced lower fleet utilization
than that of its more mature yards. The Company is increasing the fleet size
of these new yards in order to leverage its existing investment and meet the
diverse lifting needs of larger customers in these markets. Management expects
that these equipment additions will allow the Company to grow revenues in
these attractive markets and achieve fleet utilization and operating margins
consistent with those of the Company's more mature yards.
EXPAND THROUGH SELECTED ACQUISITIONS. The crane rental industry is highly
fragmented and the Company generally competes with a small number of regional
and hundreds of local crane rental companies. Management believes that there
are substantial opportunities for ACR to leverage its competitive strengths
and increase its market share through selected acquisitions. In evaluating
acquisition targets, the Company seeks acquisitions that would allow it to
penetrate new geographic markets or to solidify its position in certain
existing geographic markets, while generating attractive economic returns and
building on existing customer relationships.
OPERATIONAL OVERVIEW
ACR is headquartered in West Mifflin, Pennsylvania and organized into four
regions: Northeast (based in Pittsburgh, PA), Southeast (based in Atlanta,
GA), Central (based in Beaumont, TX), and West (based in Phoenix, AZ). Each of
these regions is headed by a regional manager who supervises five to eight
yards and oversees the movement of equipment within and across regions. These
managers have responsibility for sales and profitability for an individual
region and for the Company as a whole and receive bonuses for local, regional
and company-wide performance. This cooperative management style ensures proper
fleet deployment and optimal utilization on a company-wide basis.
Additionally, regional managers are responsible for locating promising growth
opportunities, new national customers and new yard sites in their respective
regions. The Company's regional managers average over 27 years of crane rental
experience.
Each yard serves an area within a radius of approximately 150 miles.
Depending on its size, each yard utilizes 20 to 40 skilled crane operators who
have undergone an intensive four-year training and apprenticeship program to
develop their expertise, which is a critical success factor for the Company.
The majority of these operators are used on an as-needed basis, which provides
ACR with a significant degree of operational and financial flexibility. In
addition, each yard is supervised by its respective regional manager and
staffed with a
46
<PAGE>
Yard Manager, Crane Specialist, Dispatcher, two to four sales people, an in-
house maintenance department and a small financial and administrative staff.
The Yard Manager oversees the day-to-day management of equipment, employees
and local customers and approves all pricing decisions.
Throughout its history, the Company has continually reviewed its options to
expand both within and across regions by adding new yards, often at the
initial request of one of its existing customers. ACR evaluates these
opportunities, applying financial and market-related criteria, and if
appropriate, enters a market through a single yard. As the Company gains new
customers in this market, it continues to build the size of its fleet and,
correspondingly, its market share. This initial yard then serves its market
and adjoining markets until the Company develops a sufficient revenue base to
support further expansion, at which point ACR opens a new yard in a contiguous
market. ACR has used this disciplined expansion strategy to expand regionally
into the Southeast and Central regions, and more recently to enter the West
region. Management believes that there are significant opportunities to expand
operations and grow revenue within the geographic scope of its current
operations.
One of the Company's primary performance measures is utilization, which it
defines as equipment rental revenue (excluding ancillary services such as
labor, freight and rigging which have historically generated additional
revenues) expressed as a percentage of original equipment cost. Since 1990,
ACR has consistently achieved utilization rates at or near its target of 30%,
even as it has expanded into new markets. For a particular class of equipment,
ACR's utilization rates tend to be relatively constant throughout its useful
life. Utilization in 1997 was below average primarily due to the Company's
substantial investment in new equipment and the start-up of new yards in
California. The Company's improved utilization rate in the six months ended
June 30, 1998 reflects increased utilization achieved related to these
investments.
Fleet management, which is the process of purchasing, dispatching,
maintaining and selling rental equipment, is one of the most critical
operational elements for crane rental companies. As part of its fleet
management program, the Company monitors utilization on a crane-by-crane
basis, using a tracking system that indicates, by yard, the number of cranes
currently utilized or reserved and the number and types of cranes available.
The Company's fleet management program facilitates decisions regarding: (i)
asset mix at individual yards; (ii) movements of equipment on an intra-
regional and inter-regional basis; and (iii) relocation and divestiture of
underperforming assets. The Company believes that as a result of its effective
fleet management and high utilization rates, it has generated consistent
returns on its fleet investment.
CRANE SALES
While the majority of its revenues result from crane rentals and services,
the Company engages in two forms of crane sales and has a dedicated staff
focused on maximizing returns in this business. First, the Company purchases
cranes directly from manufacturers and acts as a dealer in sales to third
parties, which has historically generated a relatively small percentage of the
Company's total revenues (4.7% in 1997). As a dealer and the largest non-
government crane purchaser in the United States, the Company benefits from
both wholesale and volume-driven purchase discounts. Additionally, by
participating in the new crane sales business, the Company has access to up-
to-date crane market and product information, which aids ACR in marketing its
used equipment and in advising its rental customers regarding equipment
selection.
Second, the Company's proactive fleet management program is designed to
match the Company's rental product offerings with regional market demand. As
part of this program, once management determines that a piece of equipment is
being underutilized in a particular yard, the equipment is either relocated to
achieve higher utilization rates or sold. The Company's preventative
maintenance programs and its knowledge of the global market for crane sales
allow it to generate consistent average returns on sales of used equipment to
both domestic and international purchasers. For example, from 1994 to 1997,
ACR sold its used equipment for an average of greater than 90% of its original
cost. The Company has historically reinvested these sales proceeds in new
equipment selected to meet customer demand and maintain optimal fleet mix.
47
<PAGE>
CUSTOMERS, SALES AND MARKETING
The Company's broad and stable customer base consists of over 8,000
customers in 41 states, Mexico and the Caribbean. Examples of the Company's
key customers include: Hess Oil, USX Corp., Mobil Corp., Huntsman Corp.,
Florida Power and Light Co., International Paper Co., Proctor & Gamble Co. and
Bayer AG.
Over 60% of the Company's rental revenues are derived from customers who
rent cranes on an operated and maintained basis, which means that the rentals
include an experienced operator. These types of rentals also tend to include
value-added services, such as the services of a Crane Specialist who provides
equipment recommendations and specifications for a potential lift. The
remainder of ACR's rental revenues are on a bare basis (i.e., without an
operator). Additionally, approximately 75% of ACR's rentals are for greater
than one month, with the majority lasting for two to four months.
In 1997, approximately 70% of the Company's rental revenues were derived
from industrial customers. The Company believes that its industrial customer
base provides stable demand for crane rentals as such customers tend to
require a certain level of predictable and necessary plant maintenance
regardless of economic conditions. Approximately 30% of the Company's rental
revenues in 1997 were from construction contractors, who primarily utilize
cranes for public infrastructure and commercial construction for a wide
variety of industries. These construction projects tend to be large, long-term
projects that generally demand value-added services and lifting expertise, and
which are generally not deferred once started.
The Company believes its diverse customer base mitigates the impact of an
economic downturn related to a particular customer, industry or geographic
region. Management estimates that in 1997, of the specific end-user groups for
which it records such data, no single industry accounted for over 13% of
rental revenues. In 1997, no single customer accounted for over 2% of rental
revenues, except for one industrial customer who represented 7% of rental
revenues and for whom the Company provides fleet management services under the
terms of an exclusive contract. The Company's customer base is also
diversified by geography, which helps to insulate the Company from regional
economic downturns and seasonality and enables ACR to optimize fleet
utilization as equipment can be moved in response to fluctuations in demand
across ACR's markets. No single region accounted for greater than 28% of the
Company's 1997 rental revenues.
The Company has created and continues to develop its diverse and extensive
customer base through a proactive marketing strategy. The Company employs an
experienced staff of over 70 full-time sales personnel to reach new customers
and maintain existing relationships. ACR believes that its marketing approach
fosters long-term relationships and multi-location or national crane rental
contracts, and enables the Company to drive market share gains and consolidate
its position as the number one choice in crane rental services. This strategy
differs from those of the Company's smaller local and regional competitors,
whose marketing efforts have traditionally been limited to yellow pages and
other print advertising which typically attracts sporadic and smaller users of
cranes and lifting services.
COMPETITION
The crane rental industry is highly fragmented and is served by a distinct
set of companies who focus almost exclusively on crane and lifting equipment
rental. ACR generally competes with a small number of regional crane rental
companies (who typically own less than 200 cranes) and hundreds of local crane
rental companies (who typically own less than 50 cranes). Management believes
that general equipment rental companies have not significantly participated in
the crane rental market because they are less able to meet the broad needs of
crane rental customers for several reasons, including: (i) the high levels of
expertise and commitment required to provide a full range of value-added
lifting services, such as highly qualified, well trained operators and lift
planning; (ii) the substantial amount of capital dedicated to cranes and
lifting equipment required to provide the fleet size and selection necessary
to meet the broad demands of larger customers; and (iii) the significant
maintenance programs required to ensure equipment reliability and safety.
Given the unique characteristics and fragmentation of the crane rental
industry, management believes there are substantial opportunities for ACR to
leverage its competitive advantages and further increase its market share
through geographic expansion and consolidation.
48
<PAGE>
ACR is the largest and only national provider of comprehensive crane and
lifting equipment rentals and services in the United States. The Company
estimates that its crane fleet represented approximately 15% of the total U.S.
crane rental fleet in 1997. According to industry estimates, the Company's
crane rental fleet is significantly larger than that of its next largest
competitor. Management believes that, relative to the Company, most local and
regional crane rental competitors lack the fleet size necessary to provide
customers with comparable selection and availability. Furthermore, ACR's
national scope, together with the mobile nature of its fleet, affords it the
ability to move assets in response to varying levels of regional or seasonal
demand and thus maximize its fleet utilization.
EQUIPMENT
The Company has a total of approximately 4,000 pieces of equipment, of which
approximately 2,400 pieces are comprised of cranes and lifting equipment, with
the remainder comprised of support vehicles (including tractors, trailers and
mechanics' vehicles). As of June 30, 1998, the original cost of the Company's
equipment, in the aggregate, was greater than $365 million. ACR is the largest
non-government purchaser of cranes in North America and consequently benefits
from volume-driven purchase discounts. The large scale of the Company's fleet,
in conjunction with its broad geographic coverage and customer base, allow it
to purchase specialized, often expensive equipment that smaller competitors or
individual crane users could not justify.
PROPERTIES
The following table sets forth certain information regarding significant
facilities operated by the Company as of June 30, 1998:
<TABLE>
<CAPTION>
FACILITY
SQUARE
LOCATION ACRES FOOTAGE PURPOSE OWNED OR LEASED
<S> <C> <C> <C> <C>
CALIFORNIA
Fontana........................ 5.0 7,200 Regional Office Leased
Richmond....................... 5.3 12,000 Regional Office Owned
San Diego...................... 4.3 6,000 Regional Office Leased
Wilmington..................... 6.4 26,420 Regional Office Owned
ARIZONA
Phoenix........................ 8.7 33,800 Regional Office Owned
TEXAS
Beaumont....................... 8.8 21,000 Regional Office Owned
Dallas......................... 3.1 5,380 Regional Office Owned
Jacinto........................ 13.2 20,720 Maintenance Owned
La Porte....................... 5.4 9,940 Regional Office Owned
North Houston.................. 3.6 18,000 Regional Office Owned
LOUISIANA
West Lake...................... 6.5 21,962 Regional Office Owned
NORTH CAROLINA
Charlotte...................... 1.5 500 Regional Office Leased
SOUTH CAROLINA
Columbia....................... 4.5 16,800 Regional Office Owned
GEORGIA
Atlanta........................ 32.0 34,884 Regional Office Owned
Augusta........................ 12.6 12,556 Regional Office Owned
Savannah....................... 14.9 26,390 Regional Office Owned
FLORIDA
Miami.......................... 2.1 160 Regional Office Leased
Pompano........................ 3.4 15,440 Regional Office Owned
West Palm Beach................ 3.0 15,100 Regional Office Leased
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
FACILITY
SQUARE
LOCATION ACRES FOOTAGE PURPOSE OWNED OR LEASED
<S> <C> <C> <C> <C>
U.S. VIRGIN ISLANDS
St. Croix.............. N/A N/A Contract Office Customer Facility
PENNSYLVANIA
Mercer................. 17.6 18,050 Regional Office Owned
Monroeville............ 5.9 39,100 Regional Office Owned
Philadelphia........... 8.0 19,350 Regional Office Owned
West Mifflin (Pitts- 28.5 45,760
burgh)................ Corp. & Reg. Offices Owned
WEST VIRGINIA
Nitro (Charleston)..... 5.8 29,220 Regional Office Owned
</TABLE>
To the extent any such properties are leased, the Company expects to be able
to renew such leases or lease comparable facilities on terms commercially
acceptable to the Company. Management believes that the Company's facilities
are suitable for its operations and provide sufficient capacity to meet the
Company's requirements for the foreseeable future.
LEGAL PROCEEDINGS
Various claims and legal proceedings generally incidental to the normal
course of business are pending or threatened against the Company. While the
Company cannot predict the outcome of these matters, in the opinion of
management, any liability arising thereunder will not have a material adverse
effect on the Company's business, financial condition and results of
operations after giving effect to provisions already recorded.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
The Company and its operations are subject to federal, state and local
environmental and occupational health and safety laws and regulations,
including laws and regulations governing petroleum storage, waste water
discharge, underground storage tanks, hazardous chemical reporting, and
hazardous waste disposal. Based upon the findings of an environmental
assessment conducted in connection with the Recapitalization, the Company
believes it is in material compliance with such requirements. The Company
expects to spend approximately $100,000 in 1998 to close and upgrade certain
underground storage tanks to comply with the U.S. EPA 1998 deadline for
attaining certain technical standards for such tanks. The Company does not
anticipate any material capital expenditures in 1999 for environmental
controls. The enactment of more stringent laws or regulations or stricter
interpretation of existing laws and regulations could require additional
expenditures by the Company, which could have a material adverse effect on the
Company's business, financial condition and results of operations.
Like all businesses, the Company is subject to liability for the
investigation and remediation of environmental contamination (including
contamination caused by other parties) at the properties it owns or operates
and at other properties where the Company or its predecessors have arranged
for the disposal of hazardous substances. The amount of such liability could
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company is currently investigating and delineating soil and groundwater
contamination at its Savannah, Georgia location that resulted from former
gasoline underground storage tanks that were removed in 1994. These activities
are being conducted under the oversight of the Georgia Department of Natural
Resources. Following delineation, either active remediation or continued
monitoring of contamination will likely be required. The cost of such work is
not yet known, but the Company expects that it will receive reimbursement for
such costs from the Georgia Underground Storage Tank Trust Fund. To date, the
Company has been approved for reimbursement for $80,000 to delineate the
contamination. The reimbursement limit under the Trust Fund is $1 million. The
Company believes that it is unlikely that its costs will exceed the
reimbursement limit.
50
<PAGE>
In connection with the Recapitalization, the Current Owners have agreed to
indemnify the Company for matters that breach the environmental
representations and warranties set forth in the Recapitalization Agreement.
Such indemnification is limited to claims submitted within four years
following the Recapitalization, subject to a $1.6 million deductible and a $16
million cap, when aggregated with other indemnified matters. There can be no
assurance that the Current Owners will have the ability to fulfill their
indemnification obligations if called upon to do so by the Company.
EMPLOYEES
As of June 30, 1998, the Company had 725 full time employees. Approximately
30 were employed at the corporate headquarters in West Mifflin, Pennsylvania
and were involved in administrative functions. The remaining employees were
located at ACR's various operating yards and were engaged in management, sales
and marketing, maintenance and administrative functions. In addition, as of
June 30, 1998, the Company contracted with approximately 750 crane operators
on an as-needed basis. The majority of these crane operators were unionized
and, as of June 30, 1998, approximately 14% of the Company's full time
employees were unionized. The Company has never experienced a material work
stoppage and considers its overall relations with its work force to be good.
The Company believes that its employees are an invaluable source of industry
expertise. ACR's ability to draw upon the vast experience of its employees
enables the Company to provide extensive, value-added services. In-house
training ensures that ACR's operators are at the forefront of industry best
practices and are able to operate the best available equipment in a safe,
efficient manner. The Company's employees and operators also provide ACR with
substantial market data, which contributes to more efficient fleet utilization
and consequently stronger financial results.
51
<PAGE>
MANAGEMENT
MANAGEMENT COMMITTEE AND EXECUTIVE OFFICERS OF HOLDINGS AND THE COMPANY
The executive officers of Holdings and the Company serve at the discretion
of the General Partner, acting through its board of managers (the "Board").
The following table sets forth information concerning executive officers of
Holdings and the Company and the members of the Board:
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Ray G. Anthony................. 59 Chairman and Chief Executive Officer
David W. Mahokey............... 39 Member of the Board and Chief Operating
Officer
Dale A. Buckwalter............. 40 Chief Financial Officer
Albert C. Bove................. 51 Senior Vice President--West Region
Joseph M. Connelly............. 51 Senior Vice President--Northeast Region
Richard Ferchak, Sr............ 53 Senior Vice President--Central Region
Ray Graham..................... 49 Senior Vice President--Regional Development
Michael Corn................... 50 Senior Vice President--Southeast Region
Frank Hanjorgiris.............. 36 Senior Vice President of Sales and Marketing
Arthur J. Innamorato........... 44 General Counsel
Paul Edgerley.................. 41 Member of the Board
Robert C. Gay.................. 46 Member of the Board
Andrew B. Balson............... 31 Member of the Board
James E. Haas.................. 62 Member of the Board
William B. Kania............... 66 Member of the Board
</TABLE>
Ray G. Anthony is the founder of Anthony Crane Rental, L.P. and currently
serves as its Chairman and Chief Executive Officer. His primary focus is to
aid senior management in reviewing fleet management strategies and to coach
and develop yard managers.
David W. Mahokey has a total of 16 years of experience in the crane rental
business, all of which have been with ACR. As the Chief Operating Officer, Mr.
Mahokey oversees the daily operations of the Company, including all equipment
acquisition and disposition decisions, fleet management, sales and marketing
and personnel issues. He has a direct dialogue with the four regional senior
vice presidents and works closely with them regarding the key operations
issues at the Company.
Dale A. Buckwalter has four years of public accounting experience and over
11 years of investment banking experience. He has served as the financial
advisor to ACR for the past five years and has been primarily responsible for
the Company's financial activities during this time. Mr. Buckwalter became the
Company's Chief Financial Officer upon the consummation of the
Recapitalization.
Albert C. Bove has more than 26 years of experience in the crane rental and
general construction industries, 21 of which have been with ACR. Since 1996,
Mr. Bove has served as the Senior Vice President--West Region. Prior to this
time, Mr. Bove served as the Yard Manager of the Company's Phoenix yard.
Richard Ferchak, Sr. has 31 years experience in the crane rental industry,
all with ACR. Mr. Ferchak is responsible for the operations of the Company's
Central region as Senior Vice President--Central Region. He has been Yard
Manager of the Pittsburgh, Carnegie and Beaumont yards. He was one of the
first ACR employees and has experience in all phases of the crane rental
business.
52
<PAGE>
Ray Graham has 27 years of experience in the crane rental industry, the last
nine of which have been with ACR. Mr. Graham started his career as a crane
operator and has been in a management position for the past 16 years. For the
past three years, Mr. Graham has been responsible for the Southeast region.
More recently, he has assumed responsibility as a regional development officer
and is responsible for developing operating plans for any facilities which are
deemed by Management as being underperforming.
Michael Corn has 13 years of experience in the crane rental industry, all of
which have been with ACR. Mr. Corn ran the operations in the Southeast from
1986 to 1995. For the past three years he has managed the Company's Virgin
Islands operation and recently returned to assume operating responsibilities
for the Southeast region.
Joseph M. Connelly has nearly 26 years of experience in construction and
engineering, the last seven of which have been with ACR. Mr. Connelly has
responsibility for the Company's quality control programs and oversees the
operations of the Company's Northeast region.
Frank Hanjorgiris has 10 years of industry sales experience and has been
employed by the Company for four years. Since 1996, Mr. Hanjorgiris has been
Vice President of Sales and Marketing and his primary responsibility has been
the sales of new and used equipment. Mr. Hanjorgiris joined the company as a
salesman of new and used equipment in 1994 and was promoted to Corporate Sales
Manager in 1995. Prior to his employment with the Company, Mr. Hanjorgiris was
employed by Brambles Equipment and American High Reach as a salesman.
Arthur J. Innamorato has 20 years of legal and public accounting experience
and has been a valued advisor to the Company for the past five years. He
assumed the position as General Counsel upon the consummation of the
Recapitalization and is responsible for managing the legal affairs of the
Company. Mr. Innamorato is also involved in strategic planning and the
Company's external growth initiatives.
Paul Edgerley has been Managing Director of Bain since 1993. Since 1990, he
has been a General Partner of Bain Venture Capital, and from 1988 to 1990 he
was a Principal of Bain Venture Capital. He serves on the Boards of Directors
of Steel Dynamics, Inc., GS Technologies Corporation, AMF Group Inc. and Sealy
Corporation.
Robert C. Gay has been a Managing Director of Bain since 1993 and has been a
General Partner of Bain Venture Capital since 1989. From 1988 to 1989, Mr. Gay
was a Principal of Bain Venture Capital. Mr. Gay is Vice Chairman of the Board
of Directors of IHF Capital, Inc., parent of ICON Health & Fitness Inc. Mr.
Gay also serves as a director of Alliance Entertainment Corp., GT Bicycles,
Inc., Physio-Control International Corporation, Cambridge Industries, Inc.,
Nutraceutical Corporation, American Pad & Paper Company, GS Technologies
Corporation, Small Fry Snack Foods Limited and Alliance Laundry Holdings LLC.
Andrew B. Balson has been a Principal of Bain since June 1998 and was an
Associate of Bain from 1996 to 1998. From 1994 to 1996, Mr. Balson was a
Consultant for Bain & Company. Previously, he was an Associate with SBC
Australia.
James E. Haas has been Vice President and Director of Sensical Corporation,
a printing company, since 1993. From 1990 to 1993, Mr. Haas was President,
Chief Executive Officer and Director of Edgecomb Metals, a metals distributor.
Mr. Haas is a Director of GS Technologies Corporation.
William B. Kania has been Senior Partner of W.B. Kania & Associates, CPAs
since 1987. Mr Kania is a Director of BT Financial Corporation, Chairman of
North Fayette County Municipal Authority and Vice Chairman of Fayette County
Industrial Development Authority. He was also a Director of Fayette Bank &
Trust Company from 1989 to 1997.
53
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-
term compensation for services in all capacities to the Company for 1997 of
those persons who served as (i) the chief executive officer during 1997 and
(ii) the other four most highly compensated executive officers of the Company
or its predecessor for 1997 (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)
<S> <C> <C> <C> <C>
Ray G. Anthony, Chairman and Chief
Executive Officer...................... 1997 $266,000 $ -- $ --
Frank Hanjorgiris, Vice President of
Sales and Marketing.................... 1997 65,600 17,500 332,474
Sam R. Anthony, Executive Vice
President(2)........................... 1997 100,160 191,280 --
Albert C. Bove, Senior Vice President--
Western Region......................... 1997 104,000 116,067 53,362
Michael Corn, Vice President............ 1997 122,681 65,300 50,768
</TABLE>
- ----------
(1) Represents commissions and deferred compensation.
(2) Sam Anthony is no longer an Executive Vice President but acts as a
consultant to the Board.
PENSION PLANS
All non-union and certain union employees of the Company are eligible to
participate in the Company's profit sharing defined contribution plan. Under
the plan, the Company contributes an amount determined by the Company (1% of
eligible participant's compensation in 1997). The plan also includes a 401(k)
savings plan feature which enables employees to make voluntary salary
reduction contributions up to 15% of eligible compensation to the plan. The
Company will match fifty percent of the contributions, up to six percent of
participant's compensation.
MULTI-EMPLOYER BENEFIT PLANS
Union employees of the Company are covered by various union-sponsored,
collectively bargained, benefit plans. The Company's contributions to these
multi-employer plans are based on specified amounts per hours worked by the
covered union employees. One such plan is currently in reorganization and the
unfunded amount is being funded through ongoing contributions by all
sponsoring companies. Under certain circumstances, the Company may have to
accelerate such funding. In 1997, the Company paid approximately $600,000
towards its share of the unfunded plan.
EMPLOYMENT AGREEMENTS
In connection with the Transactions, the Company intends to enter into
employment agreements with certain members of senior management.
DEFERRED COMPENSATION PLAN
The Company has a deferred compensation plan for certain eligible employees
and members of the Board. The participants are credited with one percent of
after-tax income annually and vest in annual contributions if employed at year
end.
54
<PAGE>
MANAGEMENT EQUITY PARTICIPATION
In connection with the Transactions, it is expected that the Equity Investor
will offer certain members of management the opportunity to purchase up to an
aggregate of 10% of the common partnership interests of Holdings, including
approximately 6% of which was purchased at the Closing and 4% of which is
expected to be purchased in the future. In addition, in order to provide
additional financial incentives to management, certain members of management
were granted options and are expected to be granted additional options to
purchase up to 10% of the common partnership interests of Holdings. Such
additional options are expected to be granted periodically and all options
vest and become exercisable upon the occurrence of certain events. The terms
of management's equity participation will be determined following the
Offering.
COMPENSATION OF MEMBERS OF THE BOARD
Holdings will reimburse members of the Board for any out-of-pocket expenses
incurred by them in connection with services provided in such capacity. In
addition, Holdings may compensate members of the Board for services provided
in such capacity.
55
<PAGE>
SECURITY OWNERSHIP
Holdings owns 99% of the outstanding common partnership and voting interests
of the Company and the General Partner owns the remaining 1% of the common
partnership and voting interests. The following table sets forth certain
information regarding the actual beneficial ownership of Holdings' common
partnership interests to be held by (i) each person (other than directors and
executive officers of Holdings) known to Holdings to own more than 5% of the
outstanding common partnership interests of Holdings and (ii) certain
executive officers and members of the Board of Holdings.
<TABLE>
<CAPTION>
NUMBER OF COMMON PERCENTAGE OF COMMON
PARTNERSHIP INTERESTS ON A PARTNERSHIP INTERESTS ON A
NAME AND ADDRESS OF BENEFICIAL OWNER FULLY DILUTED BASIS FULLY DILUTED BASIS
<S> <C> <C>
Bain/ACR, L.L.C.(1)........ 3,444,444.44 75.6%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Anthony Iron and Metal Com-
pany...................... 820,000.00 18.0%
c/o Anthony Crane Rental,
L.P.
1165 Camp Hollow Road
West Mifflin, PA 15122
Ray G. Anthony(2).......... 820,000.00 18.0%
c/o Anthony Crane Rental,
L.P.
1165 Camp Hollow Road
West Mifflin, PA 15122
David W. Mahokey........... 182,222.22 4.0%
c/o Anthony Crane Rental,
L.P.
1165 Camp Hollow Road
West Mifflin, PA 15122
Paul Edgerley(1)........... 3,086,069.44 67.7%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Robert C. Gay(1)........... 3,058,197.35 67.1%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Andrew B. Balson(1)........ 150,177.65 3.3%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
James E. Haas(3)........... 233,333.33 5.1%
c/o Haas Family Limited
Partnership
745 Beach View Drive
Boca Grande, FL 33921
Albert C. Bove............. 45,555.56 1.0%
c/o Anthony Crane Rental,
L.P.
1165 Camp Hollow Road
West Mifflin, PA 15122
William B. Kania........... 17,777.78 0.4%
c/o Anthony Crane Rental,
L.P.
1165 Camp Hollow Road
West Mifflin, PA 15122
All directors and executive
(1)(2)(3) ................ 4,493,671.51 98.6%
officers as a group
(12 persons)
</TABLE>
56
<PAGE>
- --------
(1) The limited liability company units of Bain/ACR, L.L.C. will be held by
Bain Capital Fund VI, L.P. ("Fund VI"), BCIP Trust Associates II ("BCIP
Trust II"), BCIP Trust Associates II-B ("BCIP Trust II-B"), BCIP
Associates II ("BCIP II"), BCIP Associates II-B ("BCIP II-B"), BCIP
Associates II-C ("BCIP II-C") and certain unrelated entities. Messrs.
Edgerley and Gay are: (i) Managing Directors of Bain Capital Investors VI,
Inc., the General Partner of Bain Capital Partners VI, L.P., which is the
General Partner of Fund VI; (ii) General Partners of BCIP II; (iii)
General Partners of BCIP Trust II; and (iv) affiliated with BCIP II-C. Mr.
Edgerley is a General Partner of BCIP Trust II-B. Mr. Gay is a General
Partner of BCIP II-B. Mr. Balson is a General Partner of BCIP II-B and
BCIP Trust II-B. Each of Messrs. Edgerley, Gay and Balson may be deemed to
beneficially own units held by entities in which they have an interest
and, accordingly, to beneficially own the common partnership interests of
Holdings held by such entities. Each such person disclaims beneficial
ownership of any such interests in which he does not have a pecuniary
interest.
(2) Mr. Anthony is a General Partner of Anthony Iron and Metal Company
("AIM"). Accordingly, Mr. Anthony may be deemed to beneficially own
interests owned by AIM. Mr. Anthony disclaims beneficial ownership of any
such interests in which he does not have a pecuniary interest.
(3) Mr. Haas is a General Partner of Haas Family Limited Partnership ("HFLP"),
a member of the Equity Investor. Accordingly, Mr. Haas may be deemed to
beneficially own interests beneficially owned by HFLP. Mr. Haas disclaims
beneficial ownership of any such interests in which he does not have a
pecuniary interest.
57
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SECURITYHOLDERS AGREEMENT
Upon the consummation of the Recapitalization, Holdings, the General
Partner, the Equity Investor and the Current Owners entered into a
securityholders agreement (the "Securityholders Agreement"). The
Securityholders Agreement: (i) restricts the transfer of the equity interests
of Holdings; (ii) grants tag-along rights on certain transfers of equity
interests of Holdings; (iii) requires each of the Equity Investor and the
Current Owners to consent to a sale of Holdings to an independent third party
if such sale is approved by certain holders of the then outstanding equity
interests of Holdings; and (iv) grants preemptive rights on certain issuances
of equity interests of Holdings. Certain of the foregoing provisions of the
Securityholders Agreement will terminate upon the consummation of an Initial
Public Offering or a Liquidity Event (each as defined in the Securityholders
Agreement). Certain equity holders and directors of the Issuers, including
Bain, and certain other related parties received one-time transaction fees
aggregating $8.8 million upon consummation of the Transactions.
ADVISORY AGREEMENT
In connection with the Transactions, the Company entered into an advisory
agreement (the "Advisory Agreement") with Bain pursuant to which Bain agreed
to provide: (i) general executive and management services; (ii)
identification, support, negotiation and analysis of acquisitions and
dispositions; (iii) support, negotiation and analysis of financial
alternatives; and (iv) other services agreed upon by the Company and Bain. In
exchange for such services, Bain will receive (i) an annual management fee of
$1.0 million, plus reasonable out-of-pocket expenses (payable quarterly) and
(ii) a transaction fee in an amount in accordance with the general practices
of Bain at the time of the consummation of any additional acquisition or
divestiture by the Company and of each financing or refinancing. The Advisory
Agreement has an initial term of ten years subject to automatic one-year
extensions (unless the Company or Bain provides written notice of
termination), provided that the Advisory Agreement will terminate
automatically upon the consummation of a transaction involving a sale of all
or substantially all of the assets or partnership interests of the Company.
REGISTRATION RIGHTS AGREEMENT
Upon the consummation of the Recapitalization, Holdings, the General
Partner, the Equity Investor and the Current Owners entered into a
registration rights agreement (the "Registration Rights Agreement"). Under the
Registration Rights Agreement, the holders of a majority of the Registrable
Securities (as defined in the Registration Rights Agreement) owned by the
Equity Investor and General Partner have the right, subject to certain
conditions, to require Holdings to register any or all of their common equity
interests of Holdings under the Securities Act at Holdings' expense. In
addition, all holders of Registrable Securities are entitled to request the
inclusion of any common equity interests of Holdings subject to the
Registration Rights Agreement in any registration statement at Holdings'
expense whenever Holdings proposes to register any of its common equity
interests under the Securities Act. In connection with all such registrations,
Holdings has agreed to indemnify all holders of Registrable Securities against
certain liabilities, including liabilities under the Securities Act.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
Holdings and each of the Equity Investor, General Partner and certain of the
Current Owners (collectively, the "Partners") entered into an Amended and
Restated Agreement of Limited Partnership of Holdings (the "Holdings
Partnership Agreement"). The Holdings Partnership Agreement governs the
relative rights and duties of the Partners.
Partnership Units. The ownership interests of the Partners consist of the
Holdings Preferred Units and common units (the "Common Units"). The Common
Units have voting rights and represent the common equity of Holdings. Holders
of the Holdings Preferred Units do not have voting rights but are entitled to
payment of unpaid yield and a return of capital contributions prior to any
distributions made to holders of the Common Units.
58
<PAGE>
Distributions. Subject to any restrictions contained in any financing
agreements to which Holdings or any of its Affiliates (as defined in the
Holdings Partnership Agreement) is a party, the Board may make distributions,
whether in cash, property or securities of Holdings, at any time or from time
to time pursuant to an order of priority set forth in the Holdings Partnership
Agreement. In addition, Holdings may distribute to each holder of units within
75 days after the close of each fiscal year such amounts as determined by the
Board to be appropriate to enable each holder of units to pay estimated income
tax liabilities.
Management. General Partner, as general partner of Holdings, will conduct,
direct and exercise full control over all activities of Holdings; however,
limited partners have voting rights equivalent to their respective economic
interests and, through a majority vote, can remove the General Partner.
ESCROW AGREEMENT
Upon the consummation of the Recapitalization, the Company and the Current
Owners entered into an Escrow Agreement (the "Escrow Agreement") pursuant to
which the Company deposited an aggregate of $4.0 million with an escrow agent,
in connection with the payment of a distribution amount adjustment pursuant to
the Recapitalization Agreement. If, upon payment of the distribution amount
adjustment, the escrow fund holds greater than $2.0 million, such amount in
excess of $2.0 million shall be distributed to the Current Owners.
OTHER RELATED PARTY TRANSACTIONS
The Company periodically rents and sells equipment to affiliated companies.
Rental revenues from such transactions totaled approximately $682,000,
$423,000 and $639,000 and gross proceeds from equipment sales totaled
approximately $119,000, $45,000 and $22,000 in 1997, 1996 and 1995,
respectively. In addition, the Company rents equipment, utilizes personnel and
purchases equipment from affiliated companies. Expenses from such transactions
totaled approximately $652,000, $198,000 and $366,000 in 1997, 1996 and 1995,
respectively, and purchases of equipment totaled approximately $218,000 and
$50,000 in 1997 and 1996, respectively. See Note 6 to the Consolidated
Financial Statements.
The Company has periodically made advances to Mr. Anthony. Such advances,
which totaled approximately $4.0 million at December 31, 1997 and 1996, had no
specific repayment terms and have been treated as a distribution to Anthony
Iron and Metal Company and have been classified as a reduction of partners'
capital. In addition, during 1997, advances and other receivables due from Mr.
Anthony totaling $806,000 were treated as a distribution to Anthony Iron and
Metal Company and have been charged to the partners' capital account.
Certain employees of the Company have from time to time received equity
interests in entities controlled by Mr. Anthony in conjunction with their
affiliation with the Company.
59
<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS
SENIOR NOTES
The Senior Notes are limited in aggregate principal amount to $255.0
million, of which $155.0 million was issued in the Initial Note Offering, and
will mature on August 1, 2008. The Senior Notes were issued pursuant to the
Indenture (the "Note Indenture"), and are senior, general unsecured
obligations of the Company. Interest on the Senior Notes accrues at the rate
of 10 3/8% per annum from the issue date and is payable semi-annually in
arrears on each February 1 and August 1 commencing February 1, 1999, to the
holders of record on the immediately preceding January 15 and July 15,
respectively. Additional Senior Notes may be issued from time to time after
the Initial Note Offering, subject to the provisions of the Note Indenture.
The Senior Notes are not redeemable at the Issuers' option prior to August
1, 2003. Thereafter, the Senior Notes are subject to redemption at any time at
the option of the Issuers, 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 August 1 of the years indicated
below:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ----------------
<S> <C>
2003........................................................ 105.188%
2004........................................................ 103.458%
2005........................................................ 101.729%
2006 and thereafter......................................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to August 1, 2001, the
Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Senior Notes originally issued under the Note Indenture at
a redemption price of 110.375% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages (as defined in the Note Indenture)
thereon, if any, to the redemption date, with the net cash proceeds of any
Equity Offering (as defined in the Note Indenture); provided that at least 65%
of the aggregate principal amount of Senior Notes originally issued remain
outstanding immediately after the occurrence of such redemption (excluding
Senior Notes held by the Company and its Subsidiaries (as defined in the Note
Indenture); and provided further that such redemption shall occur within 120
days of the date of the closing of any such Equity Offering.
Upon the occurrence of a Change of Control (as defined in the Note
Indenture), each holder of Senior Notes will have the right to require the
Company to repurchase all or any part of such holder's Senior Notes at an
offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to
the date of purchase.
The Note Indenture contains certain covenants that will limit, among other
things, the ability of the Company to: (i) make distributions, except to the
extent required to pay taxes, redeem partnership interests or make certain
other restricted payments or investments, (ii) incur additional indebtedness
or issue preferred equity interests, (iii) merge, consolidate or sell all or
substantially all of its assets, (iv) create liens on assets and (v) enter
into certain transactions with affiliates or related persons. The Note
Indenture contains certain customary events of default, which include the
failure to pay interest and principal, the failure to comply with certain
covenants in the Senior Notes or the Note Indenture, a default under certain
indebtedness, the imposition of certain final judgements and certain events
occurring under bankruptcy laws. See "Risk Factors--Holding Company Structure;
Effective Subordination" and "--Limitation on the Payment of Funds to Holdings
by its Subsidiaries."
60
<PAGE>
SENIOR CREDIT FACILITIES
In connection with the Transactions, the Company entered into the Senior
Credit Facilities with the Lenders for which Goldman Sachs Credit Partners
L.P. acted as arranger and syndication agent, DLJ Capital Funding, Inc. acted
as documentation agent and Fleet National Bank acted as administrative agent.
The following is a summary of the material terms and conditions of the Senior
Credit Facilities and is subject to the detailed provisions of the Senior
Credit Facilities and the various related documents entered into in connection
therewith.
Loans; Interest Rates. The Senior Credit Facilities consist of up to a
$275.0 million six-year non-amortizing Revolving Credit Facility and a $50.0
million eight-year non-amortizing Term Loan. Borrowings of $175.0 million
under the Senior Credit Facilities, together with the proceeds of the Note
Offering and the Debenture Offering, provided a portion of the financing for
the Transactions and certain expenses related to the Transactions, and will
provide financing for future working capital, capital expenditures and other
general corporate purposes including acquisitions.
The Revolving Credit Facility is available on a revolving basis subject to a
borrowing base during the period commencing on the date of the Closing and
ending on the date that is six years after the date of the Closing. At the
Company's option, loans made under the Revolving Credit Facility bear interest
at either (i) the Base Rate (defined as the highest of (x) the rate of
interest announced publicly by Fleet National Bank from time to time, as its
prime rate and (y) the Federal funds effective rate from time to time plus
0.50%) plus a margin of 1.25%, subject to adjustment based on a leverage test,
or (ii) the reserve-adjusted London Interbank Offered Rate ("LIBO") plus a
margin of 2.25%, subject to adjustment based on a leverage test. The entire
Term Loan was drawn at Closing and, at the Company's option, bears interest at
either (i) the Base Rate plus a margin of 1.75%, or (ii) the reserve-adjusted
LIBO rate plus a margin of 2.75%.
Repayment. Revolving loans may be borrowed, repaid and reborrowed from time
to time until six years after the closing of the Senior Credit Facilities. The
Term Loan may be repaid at any time but is subject to certain call protections
and must be repaid in full eight years after the closing of the Senior Credit
Facilities.
Security. The Revolving Credit Facility is secured by a first-priority
perfected lien, and the Term Loan is secured by a second-priority perfected
lien, on all partnership interests of the Company and all property and assets
(tangible and intangible) of the Company and each of its material
subsidiaries, including, without limitation, all intercompany indebtedness,
and all capital stock (or similar equity interests owned by the Company) of
each of the Company's direct and indirect material subsidiaries, whenever
acquired and wherever located; provided, however, that no more than 65% of the
capital stock or similar equity interests of non-U.S. subsidiaries will be
required to be pledged as security in the event that a pledge of a greater
percentage would result in increased tax or similar liabilities for the
Company and its subsidiaries on a consolidated basis or would violate
applicable law.
Guarantees. The obligations of the Company under the Senior Credit
Facilities are guaranteed by all material existing, direct and indirect
domestic and foreign subsidiaries of the Company and by Holdings and will be
guaranteed by all material future, direct and indirect domestic and foreign
subsidiaries of the Company.
Prepayments. The Senior Credit Facilities provide for mandatory repayments,
subject to certain exceptions, of the Revolving Credit Facility and the Term
Loan based on certain net asset sales outside the ordinary course of business
of the Company and its subsidiaries and the net proceeds of certain debt and
equity issuances.
Outstanding loans under the Revolving Credit Facility and the Term Loan
(subject to certain call protections) are voluntarily pre-payable without
penalty; provided, however, that LIBO breakage costs, if any, shall be borne
by the Company.
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Conditions and Covenants. The obligations of the lenders under the Senior
Credit Facilities are subject to the satisfaction of certain conditions
precedent customary for similar credit facilities or otherwise appropriate
under the circumstances. The Company, Holdings and each of its Subsidiaries
are subject to certain negative covenants contained in the Senior Credit
Facilities, including without limitation covenants that restrict: (i) the
incurrence of additional indebtedness and other obligations and the granting
of additional liens; (ii) mergers, consolidations, amalgamations,
liquidations, dissolutions and dispositions of assets; (iii) investments,
loans and advances; (iv) dividends, stock repurchases and redemptions; (v)
prepayment or repurchase of subordinated indebtedness and amendments to
certain agreements governing indebtedness, including the Indenture and the
Exchange Notes; (vi) engaging in transactions with affiliates; and (vii) sales
and leasebacks. The Senior Credit Facilities also contain customary
affirmative covenants, including compliance with environmental laws,
maintenance of corporate existence and rights, maintenance of insurance,
property and interest rate protection, financial reporting, inspection of
property, books and records, and the pledge of additional collateral and
guarantees from certain new subsidiaries. In addition, the Revolving Credit
Facility requires the Company to maintain a minimum interest coverage ratio
and maximum leverage ratios. Certain of these financial, negative and
affirmative covenants are more restrictive than those set forth in the
Indenture.
Events of Default. The Senior Credit Facilities also include events of
default that are typical for senior credit facilities and appropriate in the
context of the Transactions, including, without limitation, nonpayment of
principal, interest, fees or reimbursement obligations with respect to letters
of credit, violation of covenants, inaccuracy of representations and
warranties in any material respect, cross default to certain other
indebtedness and agreements, bankruptcy and insolvency events, material
judgments and liabilities, defaults or judgements under ERISA and change of
control. The occurrence of any of such events of default could result in
acceleration of the Company's obligations under the Senior Credit Facilities
and foreclosure on the collateral securing such obligations, which could have
material adverse results to holders of the Exchange Notes.
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DESCRIPTION OF EXCHANGE DEBENTURES
GENERAL
The Exchange Debentures will be issued pursuant to an Indenture (the
"Indenture") among the Issuers and State Street Bank and Trust Company, as
trustee (the "Trustee"). The Exchange Debentures will be issued in a private
transaction that is not subject to the registration requirements of the
Securities Act. See "Notice to Investors." The terms of the Exchange
Debentures include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (the "Trust
Indenture Act"). The Exchange Debentures are subject to all such terms, and
Holders of Exchange Debentures are referred to the Indenture and the Trust
Indenture Act for a statement thereof. The following summary of the material
provisions of the Indenture and the Registration Rights Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Indenture and the Registration Rights Agreement, including the definitions
therein of certain terms used below. Copies of the proposed form of Indenture
and Registration Rights Agreement are available as set forth below under "--
Additional Information." The definitions of certain terms used in the
following summary are set forth below under "--Certain Definitions." For
purposes of this summary, the term "Holdings" refers only to Anthony Crane
Rental Holdings, L.P. and not to any of its Subsidiaries.
The Exchange Debentures will be general senior unsecured obligations of the
Issuers, will rank pari passu in right of payment to all existing and future
senior unsecured Indebtedness of the Issuers and will rank senior in right of
payment to all existing and future subordinated indebtedness of the Issuers.
The Exchange Debentures, however, will be effectively subordinated to all
secured obligations of the Issuers and all obligations of Holdings'
subsidiaries, including the Senior Notes and borrowings under the Senior
Credit Facilities. As of June 30, 1998, on a pro forma basis after giving
effect to the Transactions, the Exchange Debentures would have been
effectively subordinated to $330.9 million of obligations of Holdings'
subsidiaries (including Capital Lease Obligations). The Indenture will permit
additional borrowings under the Senior Credit Facilities in the future. See
"Risk Factors--Holdings Company Structure; Effective Subordination."
Anthony Crane Holdings Capital Corporation is a Wholly Owned Subsidiary of
Holdings that was incorporated in Delaware for the purpose of serving as a co-
issuer of the Debentures in order to facilitate the Debenture Offering. The
Issuers believe that certain prospective purchasers of the Exchange Debentures
may be restricted in their ability to purchase debt securities of
partnerships, such as Holdings, unless such debt securities are jointly issued
by a corporation. Anthony Crane Holdings Capital Corporation will not have any
operations or assets and will not have any revenues. It is expected that the
Exchange Debentures will be repaid by Holdings and Holdings will have no
contribution or similar rights against Anthony Crane Holdings Capital
Corporation with respect thereto. As a result, prospective purchasers of the
Exchange Debentures should not expect Anthony Crane Holdings Capital
Corporation to participate in servicing the interest and principal Obligations
on the Exchange Debentures.
PRINCIPAL, MATURITY AND INTEREST
The Exchange Debentures will be limited in aggregate principal amount at
maturity to $48.0 million and will mature on August 1, 2009. The Exchange
Debentures will accrete at a rate of 13 3/8% per annum, compounded semi-
annually to an aggregate principal amount of $48.0 million on August 1, 2003.
Thereafter, interest on the Exchange Debentures will accrue at the rate of 13
3/8% per annum and will be payable semi-annually in arrears on February 1 and
August 1, commencing on February 1, 2004, to Holders of record on the
immediately preceding January 15 and July 15. No cash interest will be payable
on the Exchange Debentures prior to August 1, 2003. Interest on the Exchange
Debentures will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from August 1, 2003. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Principal, premium, if any, interest and Liquidated Damages, if any, on the
Exchange Debentures will be payable at the office or agency of the Issuers
maintained for such purpose within the City and State of New York or, at the
option of the Issuers, payment of interest and Liquidated Damages, if any, may
be made by check mailed to the Holders of the Exchange Debentures at their
respective addresses set forth in the register of Holders of Exchange
Debentures; provided that all payments of
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principal, premium, interest and Liquidated Damages with respect to Exchange
Debentures, the Holders of which have given wire transfer instructions to the
Issuers, will be required to be made by wire transfer of immediately available
funds to the accounts specified by the Holders thereof. Until otherwise
designated by the Issuers, the Issuers' office or agency in New York will be
the office of the Trustee maintained for such purpose. The Exchange Debentures
will be issued in denominations of $1,000 and integral multiples thereof.
OPTIONAL REDEMPTION
The Exchange Debentures will not be redeemable at the Issuers' option prior
to August 1, 2003. Thereafter, the Exchange Debentures will be subject to
redemption at any time at the option of the Issuers, 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
August 1 of the years indicated below:
<TABLE>
<CAPTION>
PERCENTAGE OF
PRINCIPAL
YEAR AMOUNT
<S> <C>
2003.............................................................. 106.688%
2004.............................................................. 104.458%
2005.............................................................. 102.229%
2006 and thereafter............................................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to August 1, 2001, the
Issuers may on any one or more occasions redeem up to 35% of the aggregate
principal amount at maturity of Exchange Debentures originally issued under
the Indenture at a redemption price of 113.375% of the Accreted Value thereof
(as determined on the redemption date), plus Liquidated Damages thereon, if
any, to the redemption date, with the net cash proceeds of any Equity
Offerings; provided that at least 65% of the aggregate principal amount at
maturity of Exchange Debentures originally issued remain outstanding
immediately after the occurrence of such redemption (excluding Exchange
Debentures held by Holdings and its Subsidiaries); and provided further that
such redemption shall occur within 120 days of the date of the closing of any
such Equity Offering.
SELECTION AND NOTICE
If less than all of the Exchange Debentures are to be redeemed at any time,
selection of Exchange Debentures for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities
exchange, if any, on which the Exchange Debentures are listed, or, if the
Exchange Debentures are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate; provided that no
Exchange Debentures of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than
60 days before the redemption date to each Holder of Exchange Debentures to be
redeemed at its registered address. Notices of redemption may not be
conditional. If any Exchange Debenture is to be redeemed in part only, the
notice of redemption that relates to such Exchange Debenture shall state the
portion of the principal amount at maturity thereof to be redeemed. A new
Exchange Debenture in principal amount at maturity equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Exchange Debenture. Exchange Debentures called
for redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on Exchange Debentures or portions
of them called for redemption.
MANDATORY REDEMPTION
The Issuers are not required to make mandatory redemption or sinking fund
payments with respect to the Exchange Debentures.
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REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of Exchange
Debentures will have the right to require the Issuers to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's
Exchange Debentures pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash (the "Change of Control Payment")
equal to 101% of the Accreted Value thereof on the date of repurchase (if such
date of repurchase is prior to August 1, 2003) or 101% of the aggregate
principal amount thereof (if such date of repurchase is on or after August 1,
2003) plus, in each case, accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase. Within ten days following any Change
of Control, the Issuers will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Exchange Debentures on the date specified in such notice, which
date 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"), pursuant to the
procedures required by the Indenture and described in such notice. The Issuers
will 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 the Exchange
Debentures as a result of a Change of Control.
On the Change of Control Payment Date, the Issuers will, to the extent
lawful, (1) accept for payment all Exchange Debentures or portions thereof
properly tendered pursuant to the Change of Control Offer, (2) deposit with
the Paying Agent an amount equal to the Change of Control Payment in respect
of all Exchange Debentures or portions thereof so tendered and (3) deliver or
cause to be delivered to the Trustee the Exchange Debentures so accepted
together with an Officers' Certificate stating the aggregate principal amount
at maturity of Exchange Debentures or portions thereof being purchased by the
Issuers. The Paying Agent will promptly mail to each Holder of Exchange
Debentures so tendered the Change of Control Payment for such Exchange
Debentures, and the Trustee will promptly authenticate and mail (or cause to
be transferred by book entry) to each Holder a new Exchange Debenture equal in
principal amount at maturity to any unpurchased portion of the Exchange
Debentures surrendered, if any; provided that each such new Exchange Debenture
will be in a principal amount of $1,000 or an integral multiple thereof. The
Issuers will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
The Senior Credit Facilities and the Note Indenture restricts the Issuers'
ability to repurchase any Exchange Debentures prior to repaying any
obligations outstanding thereunder and also provides that certain change of
control events with respect to the Issuers would constitute a default
thereunder. Any future credit agreements or other agreements relating to
Indebtedness to which the Issuers or the Company become a party may contain
similar restrictions and provisions. In the event a Change of Control occurs
at a time when the Issuers are prohibited from purchasing Exchange Debentures,
the Issuers could seek the consent of their lenders to the purchase of
Exchange Debentures or could attempt to refinance the borrowings that contain
such prohibition. If the Issuers do not obtain such a consent or repay such
borrowings, the Issuers will remain prohibited from purchasing Exchange
Debentures. In such case, the Issuers' failure to purchase tendered Exchange
Debentures would constitute an Event of Default under the Indenture which
would, in turn, constitute a default under the Senior Credit Facilities and
the Note Indenture. In addition, the exercise by Holders of the Exchange
Debentures of their right to require the Issuers to repurchase the Exchange
Debentures could cause a default under the Senior Credit Facilities or the
Note Indenture, even if the Change of Control itself does not, due to the
financial effect of such repurchases on the Issuers. Finally, the Issuers'
ability to pay cash to the Holders of Exchange Debentures upon a repurchase
may be limited by the Company's then existing financial resources.
The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Exchange Debentures to
require that the Issuers repurchase or redeem the Exchange Debentures in the
event of a takeover, recapitalization or similar transaction.
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The Issuers will 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 the Indenture applicable to a Change of Control Offer made by the
Issuers and purchases all Exchange Debentures validly tendered and not
withdrawn under such Change of Control Offer.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets of
Holdings and its Subsidiaries (determined on a consolidated basis) to any
Person or group of related Persons, as defined in Section 13(d) of the
Exchange Act (a "Group"), together with any Affiliates thereof (whether or not
otherwise in compliance with the provisions of the Indenture) other than a
Principal or a Related Party of a Principal; (ii) the approval by the holders
of Capital Stock of one or more of the Issuers or the General Partner of any
plan or proposal for the liquidation or dissolution of the Issuers or the
General Partner (whether or not otherwise in compliance with the provisions of
the Indenture); (iii) any Person or Group (other than one of the Principals or
their respective Related Parties) shall become the owner, directly or
indirectly, beneficially or of record, of more than 50% of either the
aggregate Voting Stock or Capital Stock of one of the Issuers, the General
Partner or any successor to all or substantially all of their respective
assets; (iv) the occurrence of any transaction, the result of which is that
the General Partner is no longer the sole general partner of Holdings; (v) the
first day on which Holdings fails to own 100% of the issued and outstanding
Equity Interests of Anthony Crane Holdings Capital Corporation; and (vi) (A)
for so long as Holdings is a partnership (or other pass-through entity for
federal income tax purposes) with a limited liability company serving as the
General Partner, the first day on which a majority of the members of the
Management Committee of the General Partner are not Continuing Members and (B)
at all such other times, the first day on which a majority of the members of
Holdings Management Committee are not Continuing Members. Notwithstanding the
foregoing, any reorganization of Holdings and Anthony Crane Holdings Capital
Corporation pursuant to the last sentence of the covenant described below
under the caption "Merger, Consolidation or Sale of Assets" shall not
constitute a Change of Control under the Indenture.
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of Holdings and its Subsidiaries taken as a whole. Although
there is a developing body of case law interpreting the phrase "all or
substantially all," there is no precise established definition of the phrase
under applicable law. Accordingly, the ability of a Holder of Exchange
Debentures to require the Issuers to repurchase such Exchange Debentures as a
result of a sale, lease, transfer, conveyance or other disposition of less
than all of the assets of Holdings and its Subsidiaries taken as a whole to
another Person or group may be uncertain.
"Continuing Members" means, as of any date of determination, any member of
the Management Committee of Holdings who (i) was a member of such Management
Committee on the date of the Indenture or (ii) was nominated for election or
elected to such Management Committee by any of the Principals or with the
approval of a majority of the Continuing Members who were members of such
Board at the time of such nomination or election.
"Principals" means Bain Capital, Inc. and any Affiliate of Bain Capital,
Inc.
"Related Party" with respect to any Principal means (A) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (B) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).
ASSET SALES
The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, consummate an Asset Sale unless (i) Holdings
or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or
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otherwise disposed of (as determined in good faith by the Management
Committee), (ii) at least 75% of the consideration received by Holdings or the
Restricted Subsidiary, as the case may be, from such Asset Sale shall be cash
or Cash Equivalents; provided that the amount of (a) any liabilities (as shown
on Holdings or such Restricted Subsidiary's most recent balance sheet) of
Holdings or any such Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Exchange Debentures) that are assumed by the
transferee of any such assets, (b) any Exchange Debentures or other
obligations received by Holdings or any such Restricted Subsidiary from such
transferee that are immediately converted by Holdings or such Restricted
Subsidiary into cash (to the extent of the cash received), and (c) any
Designated Noncash Consideration received by Holdings or any of its Restricted
Subsidiaries in such Asset Sale having an aggregate fair market value, taken
together with all other Designated Noncash Consideration received pursuant to
this clause (c) that is at that time outstanding, not to exceed 10% of Total
Assets at the time of the receipt of such Designated Noncash Consideration
(with the fair market value of each item of Designated Noncash Consideration
being measured at the time received and without giving effect to subsequent
changes in value), shall be deemed to be cash for the purposes of this
provision, and (iii) upon the consummation of an Asset Sale, Holdings shall
apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds
relating to such Asset Sale within 365 days of receipt thereof to reinvest in
Productive Assets or to repay Indebtedness under the Senior Credit Facilities.
Pending the final application of any such Net Cash Proceeds, Holdings or such
Restricted Subsidiary may invest such Net Cash Proceeds in Cash Equivalents.
On the 366th day after an Asset Sale or such earlier date, if any, as the
Management Committee or such Restricted Subsidiary determines not to apply the
Net Cash Proceeds relating to such Asset Sale as set forth in clause (iii) of
the preceding paragraph (each, a "Net Proceeds Offer Trigger Date"), the
aggregate amount of Net Cash Proceeds that have not been applied on or before
such Net Proceeds Offer Trigger Date as permitted in clause (iii) of the
preceding paragraph (each a "Net Proceeds Offer Amount") shall be applied by
Holdings or such Restricted Subsidiary to make an offer to purchase (the "Net
Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less
than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date, (x) from all holders of Senior Notes on a pro rata basis that
amount of Senior Notes equal to the Net Proceeds Offer Amount at a price equal
to 100% of the principal amount of the Senior Notes to be purchased, plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
date of purchase, or (y) from all Holders on a pro rata basis that amount of
Exchange Debentures equal to the Net Proceeds Offer Amount at a price equal to
100% of the Accreted Value thereof on the date of repurchase (if such date of
repurchase is prior to August 1, 2003) or 100% of the principal amount of the
Exchange Debentures to be purchased (if such date of repurchase is on or after
August 1, 2003), plus, in each case, accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase; provided,
however, that if at any time any non-cash consideration (including any
Designated Noncash Consideration) received by Holdings or any Restricted
Subsidiary of Holdings, as the case may be, in connection with any Asset Sale
is converted into or sold or otherwise disposed of for cash (other than
interest received with respect to any such non-cash consideration), then such
conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in accordance
with this covenant.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than
$10.0 million, the application of the Net Cash Proceeds constituting such Net
Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time
as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger
Date relating to such initial Net Proceeds Offer Amount from all Asset Sales
by Holdings and its Restricted Subsidiaries aggregates at least $10.0 million,
at which time Holdings or such Restricted Subsidiary shall apply all Net Cash
Proceeds constituting all Net Proceeds Offer Amounts that have been so
deferred to make a Net Proceeds Offer (the first date the aggregate of all
such deferred Net Proceeds Offer Amounts is equal to $10.0 million or more
shall be deemed to be a "Net Proceeds Offer Trigger Date").
Notwithstanding the two immediately preceding paragraphs, Holdings and its
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with such paragraphs to the extent (i) at least 75% of the
consideration for such Asset Sale constitutes Productive Assets, cash, Cash
Equivalents and/or Marketable
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Securities and (ii) such Asset Sale is for fair market value (as determined in
good faith by the Management Committee of the General Partner); provided that
any consideration not constituting Productive Assets received by Holdings or
any of its Restricted Subsidiaries in connection with any Asset Sale permitted
to be consummated under this paragraph shall be subject to the provisions of
the two preceding paragraphs.
Each Net Proceeds Offer will be mailed to the record Holders as shown on the
register of Holders within 25 days following the Net Proceeds Offer Trigger
Date, with a copy to the Trustee, and shall comply with the procedures set
forth in the Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Exchange Debentures in whole or in part in
integral multiples of $1,000 in exchange for cash. To the extent Holders
properly tender Exchange Debentures in an amount exceeding the Net Proceeds
Offer Amount, Exchange Debentures of tendering Holders will be purchased on a
pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain
open for a period of 20 business days or such longer period as may be required
by law. To the extent that the aggregate amount of Exchange Debentures
tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds Offer
Amount, the Company may use any remaining Net Proceeds Offer Amount for
general corporate purposes. Upon completion of any such Net Proceeds Offer,
the Net Proceeds Offer Amount shall be reset at zero.
The Issuers will 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 Exchange Debentures pursuant to a Net Proceeds Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the Asset Sale provisions of the Indenture, the Issuers shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the Asset Sale provisions of the Indenture by
virtue thereof.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Indenture provides that Holdings will not, and will 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 Holdings' or
any of its Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving Holdings or
any of its Subsidiaries) or to the direct or indirect holders of Holdings' or
any of its Subsidiaries' Equity Interests in their capacity as such (other
than dividends or distributions payable in Qualified Capital Stock of Holdings
or the Company); (ii) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving Holdings) any Equity Interests of Holdings or any
direct or indirect parent of Holdings; (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 Exchange Debentures (other
than intercompany Indebtedness), except a payment of interest or 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; and
(b) Holdings 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
Consolidated Fixed Charge Coverage Ratio test set forth in the first
paragraph of the covenant described below under the caption "--Incurrence
of Indebtedness and Issuance of Preferred Stock"; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Holdings and its Restricted Subsidiaries
after the date of the Indenture (excluding Restricted Payments permitted by
clauses (3), (4)(but only to the extent such Restricted Payment is made
with the cash proceeds received by Holdings or one of its Restricted
Subsidiaries from any "key man" life insurance policies), (5), (7), (8) and
(9) of the next succeeding paragraph), is less than the sum, without
duplication,
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of (i) 50% of the Consolidated Net Income of Holdings for the period (taken
as one accounting period) from the beginning of the first fiscal quarter
commencing after the date of the Indenture to the end of Holdings' 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
(ii) 100% of the aggregate net proceeds (including the fair market value of
property other than cash (determined in good faith by the Management
Committee as evidenced by a certificate filed with the Trustee, except that
in the event the value of any non-cash consideration shall be $15.0 million
or more, the value shall be determined based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing)) received by Holdings since the date of the Indenture as a
contribution to its common equity capital or from the issue or sale of
Equity Interests (other than Disqualified Stock) of Holdings (excluding any
net proceeds from an Equity Offering or capital contribution to the extent
used to redeem Exchange Debentures in accordance with the optional
redemption provisions of the Exchange Debentures) or from the issue or sale
of Disqualified Stock or debt securities of Holdings that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary of
Holdings), plus (iii) to the extent that any Restricted Investment that was
made after the date of the Indenture is sold for cash or otherwise
liquidated or repaid for cash, the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any), plus
(iv) any dividends (the fair market value of property other than cash shall
be determined in good faith by the Management Committee as evidenced by a
certificate filed with the trustee, except that in the event the value of
any non-cash consideration shall be $15.0 million or more, the value shall
be determined based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national standing) received by
Holdings or a Restricted Subsidiary after the date of the Indenture from
any Unrestricted Subsidiary of Holdings, to the extent that such dividends
were not otherwise included in Consolidated Net Income of Holdings for such
period, plus (v) to the extent that any Unrestricted Subsidiary is
redesignated as a Restricted Subsidiary after the date of the Indenture, if
as a result of such redesignation, (x) the Fixed Charge Coverage Ratio of
Holdings on a pro forma basis is lower than such ratio immediately prior
thereto, then the lesser of (A) the fair market value of Holdings'
Investment in such Subsidiary as of the date of such redesignation or (B)
such fair market value as of the date on which such Subsidiary was
originally designated as an Unrestricted Subsidiary or (y) the Fixed Charge
Coverage Ratio of Holdings on a pro forma basis is equal to or higher than
such ratio immediately prior thereto, the fair market value of Holdings
Investment in such Subsidiary as of the date of such redesignation.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph will not prohibit (1) the payment of any dividend or the
consummation of any irrevocable redemption within 60 days after the date of
declaration of such dividend or notice of such redemption if the dividend or
payment of the redemption price, as the case may be, would have been permitted
on the date of declaration or notice; (2) if no Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof, the
acquisition of any Capital Stock of Holdings (the "Retired Capital Stock"),
either (i) solely in exchange for Qualified Capital Stock of Holdings (the
"Refunding Capital Stock"), or (ii) through the application of the net
proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of Holdings) of Qualified Capital Stock of Holdings, and, in the
case of subclause (i) of this clause (2), if immediately prior to the
retirement of the Retired Capital Stock the declaration and payment of
dividends thereon was permitted under clause (3) of this paragraph, the
declaration and payment of dividends on the Refunding Capital Stock in an
aggregate amount per year no greater than the aggregate amount of dividends
per annum that was declarable and payable on such Retired Capital Stock
immediately prior to such retirement; provided that at the time of the
declaration of any such dividends on the Refunding Capital Stock, no Default
or Event of Default shall have occurred and be continuing or would occur as a
consequence thereof; (3) if no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof, the declaration and
payment of dividends to holders of any class or series of Designated Preferred
Stock (other than Disqualified Stock) issued after the date of the Indenture
(including, without limitation, the declaration and payment of dividends on
Refunding Capital Stock in excess of the dividends declarable and payable
thereon pursuant to clause (2) of this paragraph); provided that, at the time
of such issuance, Holdings, after giving effect to such issuance on a pro
forma basis, would have had a
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Consolidated Fixed Charge Coverage Ratio of at least 1.75 to 1.0 for the most
recent Four-Quarter Period; (4) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of Holdings or any
Subsidiary of Holdings held by any former member of the Holdings' (or any of
its Subsidiaries') management committee or any former officer, employee or
director of Holdings or any of its Subsidiaries pursuant to any equity
subscription agreement, stock option agreement, employment agreement or other
similar agreements; provided that (A) the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
(x) $1.5 million in any calendar year (with unused amounts in any calendar
year being carried over to succeeding calendar years) plus (y) the aggregate
cash proceeds received by Holdings or the Company during such calendar year
from any reissuance of Equity Interests by Holdings or the Company to members
of management of the Company and its Restricted Subsidiaries and (B) no
Default or Event of Default shall have occurred and be continuing immediately
after such transaction; provided, further that the aggregate cash proceeds
referred to in (y) above shall be excluded from clause (c)(ii) of the
preceding paragraph; (5) if no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof, other Restricted
Payments in an aggregate amount not to exceed $12.0 million since the date of
the Indenture; (6) repurchases of Capital Stock deemed to occur upon the
exercise of stock options if such Capital Stock represents a portion of the
exercise price thereof; (7) distributions to the Current Owners to fund the
Transactions (as described under "The Transactions-Sources and Uses") and (8)
so long as Holdings is treated as a partnership or disregarded as an entity
separate from its owners for federal income tax purposes, distributions to the
partners of Holdings in an amount with respect to any period after June 30,
1998 not to exceed the Tax Amount of Holdings for such period.
The Management Committee 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 Holdings
and its Restricted Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments at the time
of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. 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.
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 Holdings or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Indenture provides that Holdings will not, and will 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 and that Holdings will not issue any Disqualified Stock and will
not permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Issuers may incur Indebtedness or issue
shares of Disqualified Stock and Holdings' Restricted Subsidiaries may incur
Indebtedness or issue shares of preferred stock if (i) no Default or Event of
Default shall have occurred and be continuing at the time or as a consequence
of the incurrence of any such Indebtedness or the issuance of any such
Disqualified Stock, and (ii) the Consolidated Fixed Charge Coverage Ratio for
Holdings' most recently ended Four-Quarter Period would have been at least
1.75 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, at the beginning
of such Four-Quarter Period.
The provisions of the first paragraph of this covenant will not apply to the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Indebtedness"):
(i) the incurrence by Holdings of Indebtedness represented by the
Exchange Debentures issued in the Offering, the incurrence by the Company
of Indebtedness represented by the Senior Notes and the incurrence by the
Subsidiary Guarantors of the Subsidiary Guarantees of the Senior Notes;
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(ii) the incurrence by Holdings and its Restricted Subsidiaries of
Indebtedness incurred pursuant to one or more Credit Facilities in an
aggregate principal amount at any time outstanding (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of Holdings and its Subsidiaries thereunder) not to exceed the
sum of (a) $50.0 million (which amount shall initially be utilized for term
Indebtedness) plus (b) the greater of (I) the Borrowing Base or (II) $275.0
million, less, in the case of clauses (a) or (b)(II), (A) the aggregate
amount of Indebtedness of Securitization Entities at the time outstanding
less (B) the amount of all optional or mandatory principal payments
actually made by the Company or any of its Restricted Subsidiaries since
the date of the Indenture in respect of term loans under Credit Facilities
(excluding any such payments to the extent refinanced at the time of
payment under a Credit Facility) and (C) further reduced by (X) any
repayments of revolving credit borrowings under Credit Facilities that are
applied in accordance with the covenant described above under the caption
"--Asset Sales" and (Y) any Attributable Debt incurred in pursuant to the
covenant described below under the caption "--Sale Leaseback Transaction";
(iii) the incurrence by Holdings and its Restricted Subsidiaries of
Indebtedness under Currency Agreements;
(iv) the incurrence by Holdings and its Restricted Subsidiaries of
Existing Indebtedness;
(v) Interest Swap Obligations of Holdings and its Restricted Subsidiaries
covering Indebtedness of Holdings and its Restricted Subsidiaries; provided
that any Indebtedness to which any such Interest Swap Obligations
correspond is otherwise permitted to be incurred under the Indenture; and
provided, further, that such Interest Swap Obligations are entered into, in
the judgment of Holdings, to protect Holdings and its Restricted
Subsidiaries from fluctuation in interest rates on its outstanding
Indebtedness;
(vi) the incurrence by Holdings or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among Holdings and any of its
Restricted Subsidiaries; provided, however, that (i) if Holdings is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated
to the prior payment in full in cash of all Obligations with respect to the
Exchange Debentures and (ii)(A) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than Holdings or a Subsidiary thereof and (B) any sale or
other transfer of any such Indebtedness to a Person that is not either
Holdings or a Restricted Subsidiary thereof shall be deemed, in each case,
to constitute an incurrence of such Indebtedness by Holdings or such
Restricted Subsidiary, as the case may be, that was not permitted by this
clause (vi);
(vii) the incurrence of Acquired Indebtedness of Restricted Subsidiaries
of Holdings to the extent Holdings could have incurred such Indebtedness in
accordance with the first paragraph of this covenant on the date such
Indebtedness became Acquired Indebtedness;
(viii) Guarantees by Holdings and its Restricted Subsidiaries of each
other's Indebtedness; provided that such Indebtedness is permitted to be
incurred under the Indenture;
(ix) Indebtedness (including Capitalized Lease Obligations) incurred by
Holdings or any of its Restricted Subsidiaries to finance the purchase,
lease or improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any Person
owning such assets) in an aggregate principal amount outstanding not to
exceed 5% of Total Assets at the time of any incurrence thereof (including
any Refinancing Indebtedness with respect thereto) (which amount may, but
need not, be incurred in whole or in part under the Senior Credit
Facilities);
(x) the incurrence of Indebtedness (including letters of credit) in
respect of workers' compensation claims, self-insurance obligations,
performance, surety, bid or similar bonds and completion guarantees
provided by Holdings or a Restricted Subsidiary in the ordinary course of
business and consistent with past practices;
(xi) Indebtedness arising from agreements of Holdings or a Restricted
Subsidiary of Holdings providing for indemnification, adjustment of
purchase price, earn out or other similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets or a Restricted Subsidiary of Holdings, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of financing such
acquisition;
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provided that the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received
by Holdings and its Restricted Subsidiaries in connection with such
disposition;
(xii) obligations in respect of performance and surety bonds and
completion guarantees provided by Holdings or any Restricted Subsidiary of
Holdings in the ordinary course of business;
(xiii) any refinancing, modification, replacement, renewal, restatement,
refunding, defeasance, deferral, extension, substitution, supplement,
reissuance or resale of existing or future Indebtedness (other than
intercompany Indebtedness), including any additional Indebtedness incurred
to pay interest or premiums required by the instruments governing such
existing or future Indebtedness as in effect at the time of issuance
thereof ("Required Premiums") and fees in connection therewith
("Refinancing Indebtedness"); provided that (1) any such event shall not
directly or indirectly result in an increase in the aggregate principal
amount of Permitted Indebtedness (except to the extent such increase is a
result of a simultaneous incurrence of additional Indebtedness (A) to pay
Required Premiums and related fees or (B) otherwise permitted to be
incurred under the Indenture) of Holdings and its Restricted Subsidiaries,
(2) such Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has 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, (3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Exchange Debentures, such Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in right of
payment to, the Exchange Debentures on terms at least as favorable to the
Holders as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded;
(xiv) the incurrence by Holdings or any of its Restricted Subsidiaries of
additional Indebtedness and/or the issuance of Disqualified Stock in an
aggregate principal amount or aggregate liquidation value, as applicable
(or accreted value, as applicable), at any time outstanding, including all
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xiv), not to exceed $20
million; and
(xv) the incurrence by a Securitization Entity of Indebtedness in a
Qualified Securitization Transaction that is Non-Recourse Debt (except for
Standard Securitization Undertakings) with respect to Holdings and its
other Restricted Subsidiaries.
The Indenture also provides that the Issuers will not incur any Indebtedness
(including Permitted Indebtedness) that is contractually subordinated in right
of payment to any other Indebtedness of the Issuers unless such Indebtedness
is also contractually subordinated in right of payment to the Exchange
Debentures on substantially identical terms; provided, however, that no
Indebtedness of the Issuers shall be deemed to be contractually subordinated
in right of payment to any other Indebtedness of the Issuers solely by virtue
of being unsecured.
For purposes of determining compliance with this covenant, in the event that
an item of Indebtedness meets the criteria of more than one of the categories
of Permitted Indebtedness described in clauses (i) through (xv) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Issuers shall, in their sole discretion, classify such item of Indebtedness in
any manner that complies with this covenant. Accrual of interest, accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and
the payment of dividends on Disqualified Stock in the form of additional
shares of the same class of Disqualified Stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock for purposes
of this covenant; provided, in each such case, that the amount thereof is
included in Consolidated Fixed Charges of the Company as accrued.
LIENS
The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, create, incur, assume or suffer to exist any
Liens of any kind against or upon any of its property or assets, or any
proceeds therefrom, except for Permitted Liens.
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SALE LEASEBACK TRANSACTION
The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided that Holdings or any of its Restricted Subsidiaries may enter into a
sale and leaseback transaction if (i) Holdings or such Restricted Subsidiary,
as applicable, could have (a) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant to
either (A) the Fixed Charge Coverage Ratio test set forth in the first
paragraph of the covenant described above under the caption "Incurrence of
Indebtedness and Issuance of Preferred Stock" or (B) clause (ii) of the
covenant described above under the caption "Incurrence of Indebtedness and
Issuance of Preferred Stock" and (b) incurred a Lien to secure such
Indebtedness pursuant to the covenant described above under the caption "--
Liens," (ii) the gross cash proceeds of such sale and leaseback transaction
are at least equal to the fair market value (as determined in good faith by
the Management Committee and set forth in an Officers' Certificate delivered
to the Trustee) of the property that is the subject of such sale and leaseback
transaction and (iii) the transfer of assets in such sale and leaseback
transaction is permitted by, and Holdings applies the proceeds of such
transaction in compliance with, the covenant described above under the caption
"--Asset Sales."
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES
The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
consensual restriction on the ability of any Restricted Subsidiary to (a) pay
dividends or make any other distributions on or in respect of its Capital
Stock, (b) make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary of Holdings
or (c) transfer any of its property or assets to Holdings or any other
Restricted Subsidiary of Holdings, except for such encumbrances or
restrictions existing under or by reason of: (1) applicable law; (2) the
Indenture or the Note Indenture; (3) non-assignment provisions of any contract
or any lease entered into in the ordinary course of business; (4) any
instrument governing Acquired Indebtedness, which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person or the properties or assets of the Person so acquired;
(5) agreements existing on the date of the Indenture (including, without
limitation, the Senior Credit Facilities); (6) restrictions on the transfer of
assets subject to any Lien permitted under the Indenture imposed by the holder
of such Lien; (7) restrictions imposed by any agreement to sell assets or
Capital Stock permitted under the Indenture to any Person pending the closing
of such sale; (8) any agreement or instrument governing Capital Stock of any
Person that is in effect on the date such Person is acquired by Holdings or a
Restricted Subsidiary of Holdings; (9) any Purchase Money Note, or other
Indebtedness or other contractual requirements of a Securitization Entity in
connection with a Qualified Securitization Transaction; provided that such
restrictions apply only to such Securitization Entity; (10) other Indebtedness
permitted to be incurred subsequent to the date of the Indenture pursuant to
the provisions of the covenant described above under the caption "--Incurrence
of Indebtedness and Issuance of Preferred Stock"; provided that any such
restrictions are ordinary and customary with respect to the type of
Indebtedness or preferred stock being incurred or issued (under the relevant
circumstances); (11) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course of
business; and (12) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (1) through (11) above; provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the Management
Committee, no more restrictive with respect to such dividend and other payment
restrictions than those contained in the dividend or other payment
restrictions prior to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing.
MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Indenture provides that Holdings may not consolidate or merge with or
into (whether or not Holdings is the surviving corporation), or sell, assign,
transfer, 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
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(i) Holdings is the surviving corporation or the entity or the Person formed
by or surviving any such consolidation or merger (if other than Holdings) or
to which such sale, assignment, transfer, 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 Holdings) or the entity or Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all the
obligations of Holdings under the Registration Rights Agreement, the Exchange
Debentures and the Indenture pursuant to supplemental indentures in forms
reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) except in the case
of a merger of Holdings with or into a Wholly Owned Restricted Subsidiary of
Holdings and except in the case of a merger entered into solely for the
purpose of incorporating Holdings or reincorporating Holdings in another
jurisdiction, Holdings or the entity or Person formed by or surviving any such
consolidation or merger (if other than Holdings), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made
will, 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 Consolidated Fixed Charge Coverage Ratio test set
forth in the first paragraph of the covenant described above under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock." The Indenture
will also provide that Holdings may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this covenant will not be
applicable to a merger, sale, assignment, transfer, conveyance or other
disposition of assets between or among Holdings and any of its Restricted
Subsidiaries. Notwithstanding the foregoing, Holdings is permitted to
reorganize as a corporation in accordance with the procedures established in
the Indenture (and Anthony Crane Holdings Capital Corporation may thereafter
liquidate); provided that Holdings shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that such reorganization (and, if applicable, liquidation of
Anthony Crane Holdings Capital Corporation) is not adverse to holders of the
Exchange Debentures from a U.S. federal tax standpoint (it being recognized
that such reorganization shall not be deemed adverse to the holders of the
Exchange Debentures solely because (i) of the accrual of deferred tax
liabilities resulting from such reorganization or (ii) the successor or
surviving corporation (a) is subject to income tax as a corporate entity or
(b) is considered to be an "includible corporation" of an affiliated group of
corporations within the meaning of the Code or any similar state or local law)
and certain other conditions are satisfied.
TRANSACTIONS WITH AFFILIATES
(a) Holdings will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to occur any
transaction or series or related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(b) below and (y) Affiliate Transactions on terms that are not materially less
favorable than those that would have been obtained in a comparable transaction
at such time on an arm's-length basis from a Person that is not an Affiliate
of the Company or any of its Restricted Subsidiaries; provided, however, that
for a transaction or series of related transactions with an aggregate value of
$5.0 million or more, at Holdings option, either (i) a majority of the
disinterested members of the Management Committee shall determine in good
faith that such Affiliate Transaction is on terms that are not materially less
favorable than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate of Holdings or (ii) the Management Committee or any such Restricted
Subsidiary party to such Affiliate Transaction shall have received an opinion
from a nationally recognized investment banking firm that such Affiliate
Transaction is on terms not materially less favorable than those that might
reasonably have been obtained in a comparable transaction at such time on an
arm's-length basis from a Person that is not an Affiliate of Holdings; and
provided, further, that for an Affiliate Transaction with an aggregate value
of $10.0 million or more the Management Committee or any such Restricted
Subsidiary party to such Affiliate Transaction shall have received an opinion
from a nationally recognized investment banking firm that such Affiliate
Transaction is on terms not materially less favorable than those that might
reasonably have been obtained in a comparable transaction at such time on an
arm's-length basis from a Person that is not an Affiliate of Holdings.
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(b) The foregoing restrictions shall not apply to (i) reasonable fees and
compensation paid to and indemnity provided on behalf of, officers, directors,
employee or consultants of Holdings or any Subsidiary as determined in good
faith by the Management Committee or senior management; (ii) transactions
exclusively between or among Holdings and any of its Restricted Subsidiaries
or exclusively between or among such Restricted Subsidiaries, provided such
transactions are not otherwise prohibited by the Indenture; (iii) any
agreement as in effect as of the date of the Indenture or any amendment or
replacement thereto or any transaction contemplated thereby (including
pursuant to any amendment or replacement thereto) so long as any such
amendment or replacement agreement is not more disadvantageous to the Holders
in any material respect than the original agreement as in effect on the date
of the Indenture; (iv) Restricted Payments permitted by the Indenture; (v) the
payment of customary annual management, consulting and advisory fees and
related expenses to the Principals and their Affiliates made pursuant to any
financial advisory, financing, underwriting or placement agreement or in
respect of other investment banking activities, including, without limitation,
in connection with acquisitions or divestitures which are approved by the
Management Committee or such Restricted Subsidiary in good faith; (vi)
payments or loans to employees or consultants that are approved by the
Management Committee in good faith; (vii) the existence of, or the performance
by Holdings or any of its Restricted Subsidiaries of its obligations under the
terms of, any securityholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a party as of
the date of the Indenture and any similar agreements which it may enter into
thereafter; provided, however, that the existence of, or the performance by
Holdings or any of its Restricted Subsidiaries of obligations under, any
future amendment to any such existing agreement or under any similar agreement
entered into after the date of the Indenture shall only be permitted by this
clause (vii) to the extent that the terms of any such amendment or new
agreement are not disadvantageous to the Holders of Exchange Debentures in any
material respect; (viii) transactions permitted by, and complying with, the
provisions of the covenant described under "--Merger, Consolidation, or Sale
of Assets"; (ix) transactions effected as part of a Qualified Securitization
Transaction; (x) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case in the ordinary
course of business and otherwise in compliance with the terms of the Indenture
which are fair to Holdings or its Restricted Subsidiaries, in the reasonable
determination of the Management Committee or the senior management thereof, or
are on terms at least as favorable as might reasonably have been obtained at
such time from an unaffiliated party; and (xi) any Affiliate Transaction with
(A) a Principal or Related Party not in excess of $1.0 million or (B) any
other Person not in excess of $100,000.
CONDUCT OF BUSINESS
The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, engage in any businesses a majority of whose
revenues are not derived from the same or reasonably similar, ancillary or
related to, or a reasonable extension, development or expansion of, the
businesses in which Holdings and its Restricted Subsidiaries are engaged on
the date of the Indenture.
REPORTS
The Indenture provides that, whether or not required by the rules and
regulations of the Securities and Exchange Commission (the "Commission"), so
long as any Exchange Debentures are outstanding, the Issuers will furnish to
the Holders of Exchange Debentures (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if Holdings 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 Holdings and its consolidated Subsidiaries and,
with respect to the annual information only, a report thereon by Holdings
certified independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if Holdings were required
to file such reports, in each case within the time periods specified in the
Commission's rules and regulations. In addition, following the consummation of
the exchange offer contemplated by the Registration Rights Agreement, whether
or not required by the rules and regulations of the Commission, Holdings will
file a copy of all such information and reports with the Commission for public
availability within the time periods specified in the Commission's rules and
regulations (unless the Commission will not accept
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such a filing) and make such information available to securities analysts and
prospective investors upon request. In addition, Holdings has agreed that, for
so long as any Exchange Debentures remain outstanding, they will furnish to
the Holders 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.
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of Default":
(i) the failure to pay interest on any Exchange Debentures when the same
becomes due and payable if the default continues for a period of 30 days; (ii)
the failure to pay the principal on any Exchange Debentures when such
principal becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Exchange Debentures
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer); (iii)
failure by Holdings or any of its Restricted Subsidiaries to comply with the
provisions of the covenants described above under the captions "--Change of
Control," or "--Asset Sales;" (iv) a default in the observance or performance
of any other covenant or agreement contained in the Indenture if the default
continues for a period of 30 days after the Issuers receive written notice
specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least 25% of the outstanding principal amount of
the Exchange Debentures; (v) the failure to pay at final stated maturity
(giving effect to any extensions thereof) the principal amount of any
Indebtedness of Holdings or any Restricted Subsidiary (other than a
Securitization Entity), which failure continues for at least 10 days, or the
acceleration of the maturity of any such Indebtedness, which acceleration
remains uncured and unrescinded for at least 10 days, if the aggregate
principal amount of such Indebtedness, together with the principal amount of
any other such Indebtedness in default for failure to pay principal at final
maturity or which has been accelerated, aggregates $10.0 million or more at
any time; (vi) one or more judgments in an aggregate amount in excess of $10.0
million shall have been rendered against the Issuers or any of their
Significant Subsidiaries and such judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become final
and non-appealable; and (vii) certain events of bankruptcy affecting the
Issuers or any of their Significant Subsidiaries.
Upon the happening of any Event of Default specified in the Indenture, the
Trustee or the Holders of at least 25% in principal amount of outstanding
Exchange Debentures may declare the principal of and accrued interest on all
the Exchange Debentures to be due and payable by notice in writing to the
Issuers and the Trustee specifying the respective Event of Default and that
such notice is a "notice of acceleration" (the "Acceleration Notice"), and the
same shall become immediately due and payable. If an Event of Default with
respect to bankruptcy proceedings of the Issuers occurs and is continuing,
then such amount shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of Exchange
Debentures.
The Indenture provides that, at any time after a declaration of acceleration
with respect to the Debentures as described in the preceding paragraph, the
Holders of a majority in principal amount of Debentures may rescind and cancel
such declaration and its consequences (i) if the rescission would not conflict
with any judgment or decree, (ii) if all existing Events of Default have been
cured or waived except nonpayment of principal or interest that has become due
solely because of the acceleration, (iii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Issuers have paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in clause (vi) of the description above
of Events of Default, the Trustee shall have received an Officers' Certificate
and an Opinion of Counsel that such Event of Default has been cured or waived.
The holders of a majority in principal amount of Exchange Debentures may waive
any existing Default or Event of Default under the Indenture, and its
consequences, except a default in the payment of the principal of or interest
on any Exchange Debentures.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding payment of the premium that the Issuers
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would have had to pay if the Issuers then had elected to redeem the Exchange
Debentures pursuant to the optional redemption provisions of the Indenture, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law upon the acceleration of the Exchange Debentures. If
an Event of Default occurs prior to August 1, 2003 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Exchange
Debentures prior to August 1, 2003, then the premium specified in the
Indenture shall also become immediately due and payable to the extent
permitted by law upon the acceleration of the Exchange Debentures.
NO PERSONAL LIABILITY OF PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS
No partner, director, officer, employee, incorporator or stockholder of the
Issuers, as such, shall have any liability for any obligations of the Issuers
under the Exchange Debentures or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
of Exchange Debentures by accepting a Exchange Debenture waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Exchange Debentures. Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Issuers may, at their option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Exchange Debentures
("Legal Defeasance") except for (i) the rights of Holders of outstanding
Exchange Debentures to receive payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages on such Exchange
Debentures when such payments are due from the trust referred to below, (ii)
the Issuers' obligations with respect to such Exchange Debentures concerning
issuing temporary Debentures, registration of Exchange Debentures, mutilated,
destroyed, lost or stolen Exchange Debentures and the maintenance of an office
or agency for payment and money for security payments held in trust, (iii) the
rights, powers, trusts, duties and immunities of the applicable trustee, and
the Issuers' obligations in connection therewith and (iv) the Legal Defeasance
provisions of the Indenture. In addition, the Issuers may, at their option and
at any time, elect to have the obligations of the Issuers released with
respect to certain covenants that are described in the Indenture ("Covenant
Defeasance") and thereafter any omission to comply with such obligations shall
not constitute a Default or Event of Default with respect to the Exchange
Debentures. In the event Covenant Defeasance occurs, certain events (not
including non-payment, bankruptcy, receivership, rehabilitation and insolvency
events) described under "Events of Default and Remedies" will no longer
constitute an Event of Default with respect to the Exchange Debentures.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Issuers must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the Exchange Debentures, cash in U.S. 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, if any, interest and
Liquidated Damages, if any, on all outstanding Exchange Debentures on the
stated maturity or on the applicable redemption date, as the case may be, and
the Issuers must specify whether the Exchange Debentures are being defeased to
maturity or to a particular redemption date; (ii) in the case of Legal
Defeasance, the Issuers shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Trustee confirming
that (A) the Issuers have received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of the 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 Exchange Debentures 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; (iii) in the case of Covenant
Defeasance, the Issuers 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 Exchange Debentures will not recognize
income, gain or loss for federal income tax purposes as a result of such
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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; (iv) 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 borrowing of
funds to be applied to such deposit); (v) such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a
default under any material agreement or instrument (including the Indenture
and the Senior Credit Facilities) to which Holdings or any of its Subsidiaries
is a party or by which Holdings or any of its Subsidiaries is bound; (vi) the
Issuers must have delivered to the Trustee an Opinion of Counsel 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; (vii) the Issuers must
deliver to the Trustee an Officers' Certificate stating that the deposit was
not made by the Issuers with the intent of preferring the Holders of
Debentures over the other creditors of the Issuers with the intent of
defeating, hindering, delaying or defrauding creditors of the Issuers or
others; and (viii) the Issuers must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Exchange Debentures in accordance with the
Indenture. The applicable Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Issuers may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Issuers are not required to transfer or
exchange any Exchange Debenture selected for redemption. Also, the Issuers are
not required to transfer or exchange any Exchange Debenture for a period of 15
days before a selection of Exchange Debentures to be redeemed.
The registered Holder of a Exchange Debenture will be treated as the owner
of it for all purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture and
the Exchange Debentures may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Exchange Debentures
then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Exchange
Debentures), and any existing default or compliance with any provision of the
Indenture or the Exchange Debentures may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Exchange
Debentures (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Exchange
Debentures).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Exchange Debentures held by a non-consenting Holder): (i)
reduce the principal amount of Exchange Debentures whose Holders must consent
to an amendment, supplement or waiver, (ii) reduce the principal of or change
the fixed maturity of any Exchange Debenture or alter the provisions with
respect to the redemption of the Exchange Debentures (other than provisions
relating to the covenants described above under the caption "--Repurchase at
the Option of Holders"), (iii) reduce the rate of or change the time for
payment of interest on any Exchange Debenture, (iv) waive a Default or Event
of Default in the payment of principal of or premium, if any, or interest on
the Exchange Debentures (except a rescission of acceleration of the Exchange
Debentures by the Holders of at least a majority in aggregate principal amount
of the Exchange Debentures and a waiver of the payment default that resulted
from such acceleration), (v) make any Exchange Debenture payable in money
other than that stated in the Exchange Debentures, (vi) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the rights
of Holders of Exchange Debentures to receive payments of principal of or
premium, if any, or interest on the Exchange Debentures, (vii) waive a
redemption payment with respect to any Debenture (other than a payment
required by one of the covenants described above under the caption "--
Repurchase at the Option of Holders") or (viii) make any change in the
foregoing amendment and waiver provisions.
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Notwithstanding the foregoing, without the consent of any Holder of Exchange
Debentures, the Issuers and the Trustee may amend or supplement the Indenture
or the Exchange Debentures to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Exchange Debentures in addition to or in place of
certificated Exchange Debentures, to provide for the assumption of the
Issuers' obligations to Holders of Exchange Debentures in the case of a merger
or consolidation or sale of all or substantially all of the Issuers' assets,
to make any change that would provide any additional rights or benefits to the
Holders of Exchange Debentures or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with requirements
of the Commission in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should the Trustee become a creditor of the Issuers, to obtain payment of
claims in certain cases, or to realize on certain property received in respect
of any such claim as security or otherwise. The Trustee will be permitted to
engage in other transactions; however, if the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the
Commission for permission to continue or resign.
The Holders of a majority in principal amount of the then outstanding
Exchange Debentures will have the right to direct the time, method and place
of conducting any proceeding for exercising any remedy available to the
Trustee, subject to certain exceptions. The Indenture will provide that in
case an Event of Default shall occur (which shall not be cured), the Trustee
will be required, in the exercise of its power, to use the degree of care of a
prudent man in the conduct of his own affairs. Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request of any Holder of Exchange Debentures,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain copies of the Indenture and
Registration Rights Agreement, without charge, by writing to Anthony Crane
Holdings Rental L.P., 1165 Camp Hollow Road, Pittsburgh, Pennsylvania 15122,
Attention: Investor Services.
BOOK-ENTRY, DELIVERY AND FORM
The Exchange Debentures initially will be represented by one or more notes
in registered, global form without interest coupons (collectively, the "Global
Debenture"). The Global Debenture will be deposited upon issuance with the
Trustee, as custodian for The Depository Trust Company ("DTC"), in New York,
New York, and registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant as described below.
Except as set forth below, the Global Debenture may be transferred, in whole
and not in part, only to another nominee of DTC or to a successor of DTC or
its nominee. Beneficial interests in the Global Debenture may not be exchanged
for Debentures in certificated form except in the limited circumstances
described below.
The Exchange Debentures may be presented for registration of transfer and
exchange at the offices of the Exchange Agent.
DTC has advised the Issuers that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between the Participants through electronic
book-entry changes in accounts of the Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks,
trust companies, clearing corporations and certain other organizations. Access
to DTC's system is also available to
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other entities such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly (collectively, the "Indirect Participants"). Persons
who are not Participants may beneficially own securities held by or on behalf
of DTC only through the Participants or the Indirect Participants. The
ownership interest and transfer of ownership interest of each actual purchaser
of each security held by or on behalf of DTC are recorded on the records of
the Participants and the Indirect Participants.
DTC has also advised the Issuers that pursuant to procedures established by
it, (i) upon deposit of the Global Debenture, DTC will credit the accounts of
Participants designated by the exchanging holders with portions of the
principal amount of the Global Debenture and (ii) ownership of such interests
in the Global Debenture will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect Participants
(with respect to other owners of beneficial interests in the Global
Debenture).
The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in the Global Debenture to such persons may be
limited to that extent. Because DTC can act only on behalf of the
Participants, which in turn act on behalf of the Indirect Participants and
certain banks, the ability of a person having beneficial interests in the
Global Debenture to pledge such interests to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interests, may be affected by the lack of a physical certificate evidencing
such interests.
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTEREST IN THE GLOBAL DEBENTURE WILL
NOT HAVE DEBENTURES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL
DELIVERY OF DEBENTURES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE
REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of (and premium, if any) and interest
on the Global Debenture registered in the name of DTC or its nominee will be
payable to DTC or its nominee in its capacity as the registered holder under
the Indenture. Under the terms of the Indenture, the Issuers and the Trustee
will treat the persons in whose names the Exchange Debentures, including the
Global Debenture, are registered as the owners thereof for the purpose of
receiving such payments and for any and all other purposes whatsoever.
Consequently, none of the Issuers or the Trustee nor any agent of the Issuers
or the Trustee has or will have any responsibility or liability for (i) any
aspect or accuracy of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Debenture, or for maintaining, supervising
or reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Debenture or (ii) any other matter relating to the actions and
practices of DTC or any of the Participants or the Indirect Participants.
DTC has advised the Issuers that its current practice, upon receipt of any
payment in respect of securities such as the Exchange Debentures (including
principal and interest), is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate to
their respective holdings in principal amount of beneficial interests in the
relevant security as shown on the records of DTC. Payments by the Participants
and the Indirect Participants to the beneficial owners of Exchange Debentures
will be governed by standing instructions and customary practices and will not
be the responsibility of DTC, the Trustee or the Issuers. Neither the Issuers
nor the Trustee will be liable for any delay by DTC or any of the Participants
in identifying the beneficial owners of the Exchange Debentures, and the
Issuers and the Trustee may conclusively rely on and will be protected in
relying on instructions from DTC or its nominee as the registered owner of the
Global Debenture for all purposes.
Interests in the Global Debenture will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject in all cases to the
rules and procedures of DTC and the Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures and
will be settled in same-day funds.
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DTC has advised the Issuers that it will take any action permitted to be
taken by a holder of Exchange Debentures only at the direction of one or more
Participants to whose account with DTC interests in the Global Debenture are
credited and only in respect of such portion of the aggregate principal amount
of the Exchange Debentures as to which such Participant or Participants has or
have given such direction. However, if any of the events described under "--
Exchange of Book Entry Debentures for Certificated Debentures" occurs, DTC
reserves the right to exchange the Global Debenture for Debentures in
certificated form and to distributed such Debentures to its Participants.
The information in this section concerning DTC and its book-entry system has
been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Debenture among accountholders in DTC, it is under
no obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Issuers or the Trustee
nor any agent of the Issuers or the Trustee will have any responsibility for
the performance by DTC or its respective participants, indirect participants
or accountholders of their respective obligations under the rules and
procedures governing their operations.
Exchange of Book-Entry Debentures for Certificated Debentures
The Global Debenture is exchangeable for definitive Exchange Debentures in
registered certificated form if (i) DTC (x) notifies the Issuers that it is
unwilling or unable to continue as depository for the Global Debenture and the
Issuers thereupon fail to appoint a successor depository or (y) has ceased to
be a clearing agency registered under the Exchange Act, (ii) the Issuers, at
their option, notify the Trustee in writing that they elect to cause the
issuance of the Debentures in certificated form or (iii) there shall have
occurred and be continuing a Default or an Event of Default with respect to
the Exchange Debentures. In all cases, certificated Exchange Debentures
delivered in exchange for the Global Debenture or beneficial interests therein
will be registered in the names, and issued in any approved denominations,
requested by or on behalf of DTC (in accordance with its customary
procedures).
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Accreted Value" means for each $1,000 of Exchange Debentures, as of any
date of determination prior to August 1, 2003, the sum of (i) the initial
offering price of each Exchange Debenture and (ii) that portion of the excess
of the principal amount of each Exchange Debenture over such initial offering
price which shall have been accreted thereon through such date, such amount to
be so accreted on a daily basis and compounded semi-annually on each February
1 and August 1 at the rate of 13 3/8% per annum from the date of issuance of
the Exchange Debentures through the date of determination.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary
of Holdings or that is assumed by Holdings or any of its Restricted
Subsidiaries in connection with the acquisition of assets from such Person, in
each case excluding any Indebtedness incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of Holdings or such acquisition.
"Affiliate" means a Person who directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
Holdings. The term "control" means the possession directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, no Person (other than Holdings or
any Subsidiary of Holdings) in whom a Securitization Entity makes an
Investment in connection with a Qualified Securitization Transaction shall be
deemed to be an Affiliate of Holdings or any of its Subsidiaries solely by
reason of such Investment.
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"all or substantially all" shall have the meaning given such phrase in the
Revised Model Business Corporation Act.
"Asset Acquisition" means (a) an Investment by Holdings or any Restricted
Subsidiary of Holdings in any other Person if, as a result of such Investment,
such Person shall become a Restricted Subsidiary of Holdings, or shall be
merged with or into Holdings or any Restricted Subsidiary of Holdings, or (b)
the acquisition by Holdings or any Restricted Subsidiary of Holdings of all or
substantially all of the assets of any other Person or any division or line of
business of any other Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease, assignment or other transfer for value (other than operating
leases entered into in the ordinary course of business (other than Sale and
Leaseback Transactions)) by Holdings or any of its Restricted Subsidiaries to
any Person other than Holdings or a Restricted Subsidiary of Holdings of (a)
any Capital Stock of any Restricted Subsidiary of Holdings or (b) any other
property or assets of Holdings or any Restricted Subsidiary of Holdings other
than in the ordinary course of business; provided, however, that Asset Sales
shall not include (i) a transaction or series of related transactions for
which Holdings or its Restricted Subsidiaries receive aggregate consideration
of less than $1.0 million, (ii) the sale, lease, conveyance, disposition or
other transfer of all substantially all of the assets of Holdings as permitted
under the provisions described above under the caption "--Certain Covenants--
Merger, Consolidation and Sale of Assets" or any disposition that constitutes
a Change of Control, (iii) the sale or discount, in each case without
recourse, of accounts receivable arising in the ordinary course of business,
but only in connection with the compromise or collection thereof, (iv) the
factoring of accounts receivable arising in the ordinary course of business
pursuant to arrangements customary in the industry, (v) the licensing of
intellectual property, (vi) disposals or replacements of used or obsolete
cranes and equipment in the ordinary course of business, (vii) the sale, lease
conveyance, disposition or other transfer by Holdings or any Restricted
Subsidiary of assets or property to one or more Restricted Subsidiaries in
connection with Investments permitted by the covenant described under the
caption "--Restricted Payments" and (viii) sales of accounts receivable,
equipment and related assets (including contract rights) of the type specified
in the definition of "Qualified Securitization Transaction" to a
Securitization Entity for the fair market value thereof, including cash in an
amount at least equal to 75% of the fair market value thereof. For the
purposes of clause (viii), Purchase Money Notes shall be deemed to be cash.
"Attributable Debt" means, in respect of a sale and leaseback transaction,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Borrowing Base" means, as of any date, an amount equal to the sum of (i)
100% of the orderly liquidation value of cranes and lifting equipment; (ii)
75% of the orderly liquidation value of trucks and trailers; (iii) 85% of the
face amount of all accounts receivable owned by Holdings and its Restricted
Subsidiaries as of such date that are not more than 90 days past due, as
calculated on a consolidated basis and in accordance with GAAP and (iv) 75% of
the book value of spare parts inventory. To the extent that information is not
available as to the amount of accounts receivable as of a specific date,
Holdings may utilize the most recent available information for purposes of
calculating the Borrowing Base.
"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.
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"Cash Equivalents" means: (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's; (iii) commercial paper maturity no more
than one year from the date of creation thereof and at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances (or, with
respect to foreign banks, similar instruments) maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia,
having at the date of acquisition thereof combined capital and surplus of not
less than $500.0 million; (v) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in
clause (iv) above; and (vi) investments in money market funds which invest
substantially all their assets in securities of the types described in clauses
(i) through (v) above.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Anthony Crane Rental, L.P., a Pennsylvania limited
partnership and its successors.
"Consolidated EBITDA" means, with respect to any Person for any period, the
sum (without duplication) of such Person's (i) Consolidated Net Income (less
any gains on Used Crane Sales) and (ii) to the extent Consolidated Net Income
has been reduced thereby, (A) all income taxes and foreign withholding taxes
of such Person and its Restricted Subsidiaries paid or accrued in accordance
with GAAP for such period and any provision for taxes paid or accrued based on
income or profits or the Tax Amount of such Person and its Subsidiaries for
such period, to the extent that such provision for taxes or Tax Amount was
included in computing such Consolidated Net Income, (B) Consolidated Interest
Expense, (C) Consolidated Noncash Charges, (D) all one-time cash compensation
payments made in connection with the Transactions, and (E) any payments
related to addressing the Company's or any of its Restricted Subsidiaries
"Year 2000" information systems issues or to re-engineering efforts that must
be expensed in accordance with EITF 97-13.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the most recent
four full fiscal quarters for which internal financial statements are
available (the "Four-Quarter Period") ending on or prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of such
Person for the Four-Quarter Period. In addition to and without limitation of
the foregoing, for purposes of this definition, Consolidated EBITDA and
Consolidated Fixed Charges shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence of any
Indebtedness or the issuance of any preferred stock of such Person or any of
its Restricted Subsidiaries (and the application of the proceeds thereof) and
any repayment of other Indebtedness or redemption of other preferred stock
occurring during the Four-Quarter Period or at any time subsequent to the last
day of the Four-Quarter Period and on or prior to the Transaction Date, as if
such incurrence, repayment, issuance or redemption, as the case may be (and
the application of the proceeds thereof), occurred on the first day of the
Four-Quarter Period and (ii) any Asset Sales or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including any Consolidated EBITDA (including any Pro
Forma Cost Savings) associated with such Asset Acquisition) occurring during
the Four-Quarter Period or at any time subsequent to the last day of the Four-
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale
or Asset Acquisition (including the incurrence, assumption or liability for
any such Indebtedness or Acquired Indebtedness) occurred on the first day of
the Four-Quarter Period. If such Person or any of its Restricted Subsidiaries
directly or indirectly Guarantees Indebtedness of a third Person, the
preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary
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of such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness. Furthermore, in calculating Consolidated Fixed Charges for
purposes of determining the denominator (but not the numerator) of this
Consolidated Fixed Charge Coverage Ratio, (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate,
a eurocurrency interbank offered rate, or other rates, then the interest rate
in effect on the Transaction Date will be deemed to have been in effect during
the Four-Quarter Period; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating rate, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed
to accrue at the rate per annum resulting after giving effect to the operation
of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense
(excluding amortization or write off of debt issuance costs incurred on or
prior to the date of the Indenture) plus (ii) the product of (a) all cash
dividend payments or other distributions (and non-cash dividend payments in
the case of a Person that is a Subsidiary) on any series of preferred equity
of such Person, 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 (or, in the case of a Person that is a
partnership or a limited liability company, the combined federal, state and
local income tax rate that was or would have been utilized to calculate the
Tax Amount of such Person), expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP, provided that with respect to
any series of preferred stock that was not paid cash dividends during such
period but that is eligible to be paid cash dividends during any period prior
to the maturity date of the Exchange Debentures, cash dividends shall be
deemed to have been paid with respect to such series of preferred stock during
such period for purposes of clause (ii) of this definition.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication, (i) the aggregate of all cash and
non-cash interest expense with respect to all outstanding Indebtedness
(including amortization or write-off of debt issuance costs) of such Person
and its Restricted Subsidiaries, including the net costs associated with
Interest Swap Obligations, for such period determined on a consolidated basis
in conformity with GAAP, (ii) the consolidated interest expense incurred by
such Person and its Restricted Subsidiaries that was capitalized during such
period, and (iii) the interest component of Capitalized Lease Obligations and
imputed interest with respect to Attributable Debt paid, accrued and/or
scheduled to be paid or accrued by such Person and its Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Income" means, with respect to any Person for any period,
(i) the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, provided that there shall be excluded therefrom (a) gains (or
losses) from Asset Sales (without regard to the $1.0 million limitation set
forth in the definition thereof) or abandonments or reserves relating thereto
and the related tax effects according to GAAP, (b) gains (or losses) due
solely to fluctuations in currency values and the related tax effects
according to GAAP, (c) items classified as extraordinary, unusual or
nonrecurring gains (or losses) (including, without limitation, severance,
relocation, other restructuring costs and multiemployer pension plan insured
liability payments), and the related tax effects according to GAAP and any
related Tax Amounts with respect thereto, (d) the net income (or loss) of any
Person acquired in a pooling of interests transaction accrued prior to the
date it becomes a Restricted Subsidiary of Holdings or is merged or
consolidated with Holdings or any Restricted Subsidiary of Holdings, (e) the
net income of any Restricted Subsidiary of Holdings to the extent that the
declaration of dividends or similar distributions by that Restricted
Subsidiary of Holdings of that income is restricted by operation of its
charter (or the equivalent thereof), operation of law or any judgment, decree,
order, statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, (f) the net income of any Person, other than a
Restricted Subsidiary of Holdings, except to the extent of cash dividends or
distributions paid to Holdings or a Restricted Subsidiary of
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Holdings by such Person, (g) only for purposes of clause (c)(i) of the first
paragraph of the covenant described under the caption "--Restricted Payments",
any amounts included pursuant to clause (c)(iii) of the first paragraph of
such covenant, (h) the net income (or loss) from the operations of any
business that has been divested by distribution, sale, spin-off or
abandonment, and (i) one time non-cash compensation charges, including any
arising from existing stock options resulting from any merger or
recapitalization transaction, less (ii) any cash distribution paid or accrued
related to payment of the Tax Amount for such period.
"Consolidated Noncash Charges" means, with respect to any Person for any
period, the aggregate depreciation, amortization and any other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person for such period, determined on a consolidate basis
in accordance with GAAP excluding any such non-cash charge constituting an
extraordinary item or loss or any such non-cash charge which requires an
accrual of or a reserve for cash charges for any future period.
"Credit Facilities" means one or more debt facilities (including, without
limitation, the Senior Credit Facilities) or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables
to such lenders or to special purpose entities formed to borrow from such
lenders against such receivables) and/or letters of credit.
"Currency Agreements" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect
Holdings or any Restricted Subsidiary of Holdings against fluctuations in
currency values.
"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.
"Designated Noncash Consideration" means any non-cash consideration (other
than non-cash consideration that would constitute a Restricted Investment)
received by Holdings or one of its Restricted Subsidiaries in connection with
an Asset Sale that is so designated as Designated Noncash Consideration
pursuant to an Officers' Certificate executed by the principal executive
officer and the principal financial officer of Holdings or such Restricted
Subsidiary. Such Officers' Certificate shall state the basis of such
valuation, which shall be a report of a nationally recognized investment
banking firm with respect to the receipt in one or a series of related
transactions of Designated Noncash Consideration with a fair market value in
excess of $10.0 million.
"Designated Preferred Stock" means preferred stock that is so designated as
Designated Preferred Stock, pursuant to an Officers' Certificate executed by
the principal executive officer and the principal financial officer of
Holdings, on the issuance date thereof, the cash proceeds of which are
excluded from the calculation set forth in clause (iv) of the first paragraph
of the covenant described under the caption "--Restricted Payments."
"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 Exchange Debentures mature; provided, however, that any Capital
Stock that would constitute Disqualified Stock solely because the holders
thereof have the right to require Holdings to repurchase such Capital Stock
upon the occurrence of a Change of Control or an Asset Sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
Holdings may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with the covenant
described above under the caption "--Certain Covenants-Restricted Payments."
"dividends" means, for so long as Holdings or any applicable Subsidiary is a
partnership (or other pass-through entity for federal income tax purposes),
dividends or distributions.
"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).
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"Equity Offering" means any offering of Qualified Capital Stock of Holdings.
"Existing Indebtedness" means Indebtedness of Holdings and its Restricted
Subsidiaries (other than Indebtedness under the Senior Credit Facilities) in
existence on the date of the Indenture, until such amounts are permanently
repaid.
"Four-Quarter Period" has the meaning specified in the definition of
Consolidated Fixed Charge Coverage Ratio.
"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 on the date of the Indenture.
"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.
"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 (including Interest Swap
Obligations) and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates.
"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, Exchange Debentures, 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. For purposes of calculating the amount of Indebtedness of
a Securitization Entity outstanding as of any date, the face or notional
amount of any interest in receivables or equipment that is outstanding as of
such date shall be deemed to be Indebtedness but any such interests held by
Affiliates of such Securitization Entity shall be excluded for purposes of
such calculation.
"Interest Swap Obligations" means the obligations of any Person, pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated
by applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Persons calculated
by applying a fixed or a floating rate of interest on the same notional
amount.
"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
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investments on a balance sheet prepared in accordance with GAAP. If Holdings
or any Subsidiary of Holdings sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of Holdings such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of Holdings, Holdings 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 Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of the covenant described above
under the caption "--Restricted Payments".
"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).
"Management Committee" means (i) for so long as Holdings is a partnership
(or other pass through entity for federal income tax purposes), the management
committee (or the equivalent thereof for any other pass through entity for
federal income tax purposes) of the General Partner and (ii) otherwise, the
Board of Directors of Holdings.
"Marketable Securities" means publicly traded debt or equity securities that
are listed for trading on a national securities exchange and that were issued
by a corporation whose debt securities are rated at least "AAA-" from S&P or
"Aaa3" from Moody's.
"Moody's" means Moody's Investors Service, Inc.
"Net Proceeds" means the aggregate cash proceeds received by Holdings 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 or Tax Distributions
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.
"Non-Recourse Debt" means Indebtedness (i) as to which neither Holdings 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 of
Holdings 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; and (iii) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or
assets of Holdings or any of its Restricted Subsidiaries.
"Note Indenture" means the indenture governing the Senior Notes.
"Obligations" means any principal, interest (including interest that, but
for the filing of a petition in bankruptcy with respect to the Issuers, would
accrue on such obligations), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"Permitted Business" means any business that derives a majority of its
revenues from the sale, rental or lease of cranes or other lifting equipment
or activities that are reasonably similar, ancillary or related to, or a
reasonable extension, development or expansion of, the businesses in which
Holdings and its Restricted Subsidiaries are engaged on the date of the
Indenture.
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"Permitted Investments" means (i) Investments by Holdings or any Restricted
Subsidiary of Holdings in any Restricted Subsidiary of Holdings (whether
existing on the date of the Indenture or created thereafter) or in any other
Person (including by means of any transfer of cash or other property) if as a
result of such Investment such Person shall become a Restricted Subsidiary of
Holdings and Investments in Holdings by any Restricted Subsidiary of Holdings,
(ii) cash and Cash Equivalents, (iii) Investments existing on the date of the
Indenture, (iv) loans and advances to employees and officers of Holdings and
its Restricted Subsidiaries in the ordinary course of business, (v) accounts
receivable created or acquired in the ordinary course of business, (vi)
Interest Swap Obligations entered into in the ordinary course of Holdings
businesses and otherwise in compliance with the Indenture, (vii) Investments
in Unrestricted Subsidiaries an amount at any one time outstanding not to
exceed $10.0 million, (viii) Investments in securities of trade creditors or
customers received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers, (ix) guarantees by Holdings of Indebtedness otherwise permitted to
be incurred by Restricted Subsidiaries of Holdings under the Indenture, (x)
Investments the payment for which consists exclusively of Qualified Capital
Stock of Holdings, (xi) additional Investments having an aggregate fair market
value, taken together with all other Investments made pursuant to this clause
(xi) that are at that time outstanding, not to exceed 5% of Total Assets at
the time of such Investment (with the fair market value of each Investment
being measured at the time made and without giving effect to subsequent
changes in value), (xii) Investments received by Holdings or its Restricted
Subsidiaries as consideration for asset sales, including Asset Sales; provided
that in the case of an Asset Sale, such Asset Sale is effected in compliance
with the covenant described under the caption "--Redemption or Repurchase at
Option of Holders-Asset Sales," and (xiii) any Investment by Holdings or a
Subsidiary of Holdings in a Securitization Entity or any Investment by a
Securitization Entity in any other Person in connection with a Qualified
Securitization Transaction; provided that any Investment in a Securitization
Entity is in the form of a Purchase Money Note or an equity interest.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims either
(a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which Holdings or its Restricted Subsidiaries shall
have set aside on its books such reserves as may be required pursuant to
GAAP;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default;
(v) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of Holdings or
any of its Restricted Subsidiaries;
(vi) any interest or title of a lessor under any Capitalized Lease
Obligation;
(vii) purchase money Liens to finance property or assets of Holdings or
any Restricted Subsidiary of Holdings acquired in the ordinary course of
business; provided, however, that (A) the related purchase money
Indebtedness shall not exceed the cost of such property or assets and shall
not be secured by any property or assets of Holdings or any Restricted
Subsidiary of Holdings other than the property and assets so acquired and
(B) the Lien securing such Indebtedness shall be created with 90 days of
such acquisition;
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(viii) Liens upon specific items of inventory or other goods and proceeds
of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate
the purchase, shipment, or storage of such inventory or other goods;
(ix) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating to
such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of Holdings or
any of its Restricted Subsidiaries, including rights of offset and set-off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under the
Indenture;
(xii) Liens securing Acquired Indebtedness incurred in reliance on the
second paragraph of the covenant described above under the caption "--
Incurrence of Indebtedness and Issuance of Preferred Stock";
(xiii) Liens incurred in the ordinary course of business of Holdings or
any Restricted Subsidiary with respect to obligations that do not in the
aggregate exceed $15.0 million at any one time outstanding;
(xiv) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of Holdings and its
Restricted Subsidiaries;
(xv) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(xvi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customer duties in connection with the
importation of goods;
(xvii) Liens on assets of Unrestricted Subsidiaries that secure Non-
Recourse Debt of Unrestricted Subsidiaries;
(xviii) Liens existing on the date of the Indenture, together with any
Liens securing Indebtedness incurred in reliance on clause (xiii) of the
definition of Permitted Indebtedness in order to refinance the Indebtedness
secured by Liens existing on the date of the Indenture; provided that the
Liens securing the refinancing Indebtedness shall not extend to property
other than that pledged under the Liens securing the Indebtedness being
refinanced;
(xix) Liens securing Indebtedness and other Obligations under Credit
Facilities that will be permitted by the terms of the Indenture to be
incurred;
(xx) Liens securing Attributable Debt incurred in connection with any
sale and leaseback transaction permitted to be consummated pursuant to the
covenant described above under the caption "Sale Leaseback Transaction";
(xxi) Liens securing Indebtedness permitted to be incurred pursuant to
(A) the Senior Credit Facilities (whether such Indebtedness is incurred
pursuant to the Consolidated Fixed Charge Coverage Ratio set forth in the
first paragraph of the covenant described above under the caption
"Incurrence of Indebtedness and Issuance of Preferred Stock" or clause (ii)
of the covenant described above under the caption "Incurrence of
Indebtedness and Issuance of Preferred Stock"), (B) clause (ix) of the
covenant described above under the caption "Incurrence of Indebtedness and
Issuance of Preferred Stock" and (C) clause (xiv) of the covenant described
above under the caption "Incurrence of Indebtedness and Issuance of
Preferred Stock"; and
(xxii) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case incurred in connection
with a Qualified Securitization Transaction.
"Productive Assets" means assets (including Capital Stock) that are used or
usable by Holdings and its Restricted Subsidiaries in Permitted Businesses;
provided that for any Capital Stock to qualify as Productive Assets, it must,
after giving pro forma effect to the transaction in which it was acquired, be
Capital Stock of a Restricted Subsidiary.
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"Pro Forma Cost Savings" means, with respect to any period, the reduction in
costs that occurred during the Four-Quarter Period or after the end of the
Four-Quarter Period and on or prior to the Transaction Date that were (i)
directly attributable to an Asset Acquisition and calculated on a basis that
is consistent with Article 11 of Regulation S-X under the Securities Act as in
effect on the date of the Indenture or (ii) implemented by the business that
was the subject of any such Asset Acquisition within six months of the date of
the Asset Acquisition and that are supportable and quantifiable by the
underlying accounting records of such business, as if, in the case of each of
clause (i) and (ii), all such reductions in costs had been effected as of the
beginning of such period.
"Purchase Money Note" means a promissory Debenture of a Securitization
Entity evidencing a line of credit, which may be irrevocable, from Holdings or
any Restricted Subsidiary of the Company in connection with a Qualified
Securitization Transaction, which Debenture shall be repaid from cash
available to the Securitization Entity, other than (i) amounts required to be
established as reserves pursuant to agreements, (ii) amounts paid to investors
in respect of interest, principal and other amounts owing to such investors
and (iii) amounts paid in connection with the purchase of newly generated
receivables or newly acquired equipment.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Stock.
"Qualified Securitization Transaction" means any transaction or series of
transactions pursuant to which the Company or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to (a) a Securitization
Entity (in the case of a transfer by Holdings or any of its Restricted
Subsidiaries) and (b) any other Person (in case of a transfer by a
Securitization Entity), or may grant a security interest in, any accounts
receivable or equipment (whether now existing or arising or acquired in the
future) of Holdings or any of its Restricted Subsidiaries, and any assets
related thereto including, without limitation, all collateral securing such
accounts receivable and equipment, all contracts and contract rights and all
Guarantees or other obligations in respect to such accounts receivable and
equipment, proceeds of such accounts receivable and equipment and other assets
(including contract rights) which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable and equipment, all
of the foregoing for the purpose of providing working capital financing on
terms that are more favorable to Holdings and its Restricted Subsidiary than
would otherwise be available at that time.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's.
"Securitization Entity" means a Wholly Owned Subsidiary of Holdings (or
another Person in which Holdings or any Subsidiary of Holdings makes an
Investment and to which Holdings or any Subsidiary of Holdings transfers
accounts receivable or equipment and related assets) that engages in no
activities other than in connection with the financing of accounts receivable
or equipment and that is designated by the Management Committee of Holdings
(as provided below) as a Securitization Entity (a) no portion of the
Indebtedness or any other Obligations (contingent or otherwise) of which (i)
is guaranteed by Holdings or any Restricted Subsidiary of Holdings (excluding
guarantees of Obligations (other than the principal of, and interest on,
Indebtedness)) pursuant to Standard Securitization Undertakings, (ii) is
recourse to or obligates Holdings or any Restricted Subsidiary of Holdings in
any way other than pursuant to Standard Securitization Undertakings or (iii)
subjects any property or asset of Holdings or any Restricted Subsidiary of the
Company, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (b) with which neither Holdings nor any Restricted Subsidiary of
Holdings has any material contract, agreement, arrangement or understanding
other than on terms no less favorable to Holdings or such Restricted
Subsidiary than those that might be obtained at the time from Persons that are
not Affiliates of Holdings, other than fees payable in the ordinary course of
business in connection with servicing receivables of such entity, and (c) to
which neither Holdings nor any Restricted Subsidiary of Holdings has any
obligation to
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maintain or preserve such entity's financial condition or cause such entity to
achieve certain levels of operating results. Any such designation by the
Management Committee of Holdings shall be evidenced to each of the Trustees by
filing with the Trustees a certified copy of the resolution of the Management
Committee of Holdings giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Sale and Leaseback Transaction" means any sale and leaseback transaction by
Holdings or any of its Restricted Subsidiaries with respect to assets with an
aggregate fair market value (as determined in good faith by the Management
Committee) in excess of $1.0 million.
"Senior Credit Facilities" means the Credit Agreement, dated as of the date
of the Indenture, by and among the Company, Goldman Sachs Credit Partners
L.P., and the Agent, Collateral Agent and the financial institutions party
thereto, providing for revolving credit borrowings and term loan borrowings,
including any related Exchange Debentures, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case
as amended (including any amendment and restatement thereof), modified,
renewed, refunded, replaced, refinanced or restructured from time to time and
whether with the same or any other agent, lender or group of lenders,
including to increase the amount of available borrowings thereunder.
"Senior Notes" means the 10 3/8% Senior Notes due 2008 of the Company.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Act, as such Regulation is in effect on the date hereof.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by Holdings or any Subsidiary of
Holdings that are reasonably customary in an accounts receivable or equipment
transactions.
"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), but shall not include any Non-Recourse Subsidiary.
"Tax Amount" means the amount of distributions, whether paid or accrued,
necessary to permit Holdings partners to pay federal and state income tax
liabilities arising from income of Holdings and its Restricted Subsidiaries
and taxable to such partners, including the tax distributions contemplated by
Holdings' and the Company's respective partnership agreements attributable to
such partners solely as a result of Holdings (and any intermediate entity
through which any such partner owns its interest in Holdings) being a
partnership or similar pass-through entity for federal income tax purposes.
"Tax Distributions" means a distribution in respect of taxes to the partners
of Holdings pursuant to clause (9) of the second paragraph of the covenant
described above under the caption "Certain Covenants-Restricted Payments."
"Total Assets" means the total consolidated assets of Holdings and its
Restricted Subsidiaries, as set forth on Holdings most recent consolidated
balance sheet.
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"Unrestricted Subsidiary" means (i) any Subsidiary (other than Anthony Crane
Holdings Capital Corporation) that is designated by the Management Committee
as an Unrestricted Subsidiary pursuant to a 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
Holdings or any Restricted Subsidiary of Holdings unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to
Holdings or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of Holdings; (c) is a Person with
respect to which neither Holdings nor any of its Restricted Subsidiaries has
any direct or indirect obligation (x) to subscribe for additional Equity
Interests or (y) 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 Holdings 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 Holdings or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer of
Holdings or any of its Restricted Subsidiaries. Any such designation by the
Management Committee 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 and was permitted by the covenant
described above under the caption "Certain Covenants-Restricted Payments." If,
at any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
Holdings as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under the caption "--
Incurrence of Indebtedness and Issuance of Preferred Stock", Holdings shall be
in default of such covenant). The Management Committee 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 Holdings of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (i)
such Indebtedness is permitted under the covenant described under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock", 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 following such designation.
"Used Crane Sales" means sales of used cranes, used parts and other used
equipment by Holdings or any of its Restricted Subsidiaries pursuant to the
Company's fleet management program in the ordinary course of business
consistent with past practices on the date of the Indenture.
"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 Management
Committee or Board of Directors, as applicable, 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 Subsidiary" of any Person means a 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 or by one or more Wholly Owned Subsidiaries of such Person and one or
more Wholly Owned Subsidiaries of such Person.
"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 or by one or more Wholly Owned Restricted
Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Debentures were originally sold by the Issuers on July 22, 1998 to the
Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently resold the Debentures to qualified institutional buyers in
reliance on Rule 144A under the Securities Act and in offshore transactions
pursuant to Regulation S under the Securities Act. As a condition to the
Purchase Agreement, the Issuers entered into the Registration Rights Agreement
with the Initial Purchasers pursuant to which the Issuers have agreed to: (i)
to use their respective best efforts to file with the Commission on or prior
to 90 calendar days after the date of issuance of the Debentures (the "Issue
Date") a registration statement on an appropriate form under the Securities
Act (the "Exchange Offer Registration Statement") relating to a registered
exchange offer (the "Exchange Offer") for the Debentures under the Securities
Act and (ii) use their respective best efforts to cause the Exchange Offer
Registration Statement to become effective within 165 calendar days after the
Issue Date. Upon the effectiveness of the Exchange Offer Registration
Statement, unless it would not be permitted by applicable law or Commission
policy, the Issuers will promptly offer to exchange any and all of the
outstanding Debentures for the Exchange Debentures that are identical in all
material respects to the Debentures (except that the Exchange Debentures will
not contain terms with respect to transfer restrictions) and that would be
registered under the Securities Act. The Issuers will keep the Exchange Offer
open for not less than 20 business days (or longer, if required by applicable
law) after the date on which notice of the Exchange Offer is mailed to the
holders of the Debentures. For each Debenture surrendered to the Issuers
pursuant to the Exchange Offer, the holder of such Debenture will receive an
Exchange Debenture having a principal amount equal to that of the surrendered
Debenture. Interest on each Exchange Debenture will accrue from the date of
its original issue.
Under existing interpretations of the staff of the Commission contained in
several no-action letters to third parties, the Issuers believe that the
Exchange Debentures would in general be freely tradeable after the Exchange
Offer without further registration under the Securities Act. However, any
purchaser of Debentures who is an "affiliate" of either Holdings or AC
Holdings Corp. or who intends to participate in the Exchange Offer for the
purpose of distributing the Exchange Debentures: (i) will not be able to rely
on the interpretation of the staff of the Commission; (ii) will not be able to
tender its Debentures in the Exchange Offer; and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Debentures, unless such sale or
transfer is made pursuant to an exemption from such requirements.
If (i) the Issuers are not required to file the Exchange Offer Registration
Statement or permitted to effect the Exchange Offer because the Exchange Offer
is not permitted by applicable law or Commission policy; or (ii) any Holder of
Transfer Restricted Securities notifies the Issuers prior to the 20th business
day following commencement of the Exchange Offer that (a) it is prohibited by
law or Commission policy from participating in the Exchange Offer or (b) that
it may not resell the Exchange Debentures 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 or (c) that it is a broker-dealer and owns Debentures acquired
directly from the Issuers or an affiliate of the Issuers, then the Issuers
will file with the Commission a shelf registration statement (the "Shelf
Registration Statement") to cover resales of Transfer Restricted Securities by
such Holders who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Issuers
will use their best efforts to cause the applicable registration statement to
be declared effective as promptly as possible by the Commission. For purposes
of the foregoing, "Transfer Restricted Securities" means each (A) Debenture,
until the earliest to occur of any of the following events: (i) the date on
which such Debenture may be exchanged for an Exchange Debenture in the
Exchange Offer, if following such exchange such Holder would be entitled to
resell such Exchange Debenture to the public without complying with the
prospectus delivery requirements of the Securities Act; (ii) the date on which
such Debenture has been registered pursuant to an effective Shelf Registration
Statement under the Securities Act and disposed of in accordance with the
Shelf Registration Statement (and purchasers thereof have been issued Exchange
Debentures); or (iii) the date on which such Debenture is sold to the public
pursuant to Rule 144 under the Securities Act and each (B) Exchange Debenture
held by a Broker-Dealer until the date on which such Exchange Debenture is
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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).
The Issuers will use their respective best efforts to cause the Exchange
Offer Registration Statement or, if applicable, the Shelf Registration
Statement (each, a "Registration Statement") to become effective under the
Securities Act by the Commission as soon as practicable after the filing
thereof but in no event later than 165 calendar days after the Issue Date.
Upon the effectiveness of the Exchange Offer Registration Statement, unless
it would not be permitted by applicable law or Commission policy, the Issuers
will promptly commence the Exchange Offer to enable each Holder of the
Debentures (other than Holders who are affiliates (within the meaning of the
Securities Act) of either Holdings or AC Holdings Corp. or underwriters (as
defined in the Securities Act) with respect to the Exchange Debentures) to
exchange the Debentures for Exchange Debentures. If applicable, the Issuers
shall keep the Shelf Registration Statement continuously effective for, under
certain circumstances, a period of at least two years after the Issue Date.
In the event that, for any reason whatsoever: (a) the Issuers fail to file
any of the Registration Statements on or before the date specified for such
filing; (b) any of such Registration Statements is not declared effective by
the Commission on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"); (c) the Issuers fail to consummate the Exchange
Offer within 30 business days of the Effectiveness Target Date with respect to
the Exchange Offer Registration Statement; or (d) the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective
but thereafter ceases to be effective or usable in connection with resales of
Transfer Restricted Securities during the periods specified in the
Registration Rights Agreement (each such event referred to in clauses (a)
through (d) above a "Registration Default"), then the Issuers will pay
liquidated damages ("Liquidated Damages") to each Holder of Debentures, with
respect to the first 90-day period immediately following the occurrence of the
first Registration Default, in an amount equal to $.05 per week per $1,000
principal amount of Debentures held by such Holder. The amount of the
Liquidated Damages will increase by an additional $.05 per week per $1,000
principal amount of Debentures with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
Liquidated Damages for all Registration Defaults of $.50 per week per $1,000
principal amount of Debentures. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages will cease.
The Issuers (i) shall make available for a period of 180 days from the
consummation of the Exchange Offer a prospectus meeting the requirements of
the Securities Act to any broker-dealer for use in connection with any resale
of any such Exchange Debentures and (ii) shall pay all expenses incident to
the Exchange Offer (including the expense of one counsel to the Holders
covered thereby) and will indemnify certain holders of the Debentures
(including any broker-dealer) against certain liabilities, including
liabilities under the Securities Act. A broker-dealer which delivers such a
prospectus to purchasers in connection with such resales will be subject to
certain of the civil liability provisions under the Securities Act and will be
bound by the provisions of the Registration Rights Agreement (including
certain indemnification rights and obligations).
Each holder of Debentures who wishes to exchange such Debentures for
Exchange Debentures in the Exchange Offer will be required to make
representations in the Letter of Transmittal that (a) it is not an "affiliate"
of either Holdings or AC Holdings Corp. (within the meaning of Rule 405 of the
Securities Act); (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 Exchange Debentures to be issued in the Exchange Offer;
(c) it is acquiring the Exchange Debentures in its ordinary course of
business; and (d) if it is a Participating Broker-Dealer holding Debentures
acquired for its own account as a result of market-making activities or other
trading activities, it acknowledges that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of
Exchange Debentures received in respect of such Exchange Debentures pursuant
to the Exchange Offer. The Commission has taken the position and the Issuers
believe that Participating Broker-Dealers may fulfill their prospectus
delivery requirements with respect to the Exchange Debentures (other than a
resale of an unsold allotment from the original sale of the Debentures) with
the prospectus contained in the Exchange Offer
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Registration Statement. Under the Registration Rights Agreement, the Issuers
are required to allow Participating Broker-Dealers and other persons, if any,
subject to similar prospectus delivery requirements to use the prospectus
contained in the Exchange Offer Registration Statement in connection with the
resale of such Exchange Debentures.
If the holder is a Participating Broker-Dealer, it will be required to
include a representation in such Participating Broker-Dealer's letter of
transmittal with respect to the Exchange Offer that such Participating Broker-
Dealer has not entered into any arrangement or understanding with the Issuers
or any affiliate of the Issuers to distribute the Exchange Debentures.
Holders of the Debentures will be required to make certain representations
to the Issuers (as described above) in order to participate in the Exchange
Offer and will be required to deliver information to be used in connection
with the Shelf Registration Statement in order to have their Debentures
included in the Shelf Registration Statement and benefit from the provisions
regarding liquidated damages set forth in the preceding paragraphs. A holder
who sells Debentures pursuant to the Shelf Registration Statement generally
will be required to be named as a selling securityholder in the related
prospectus and to deliver a prospectus to purchasers, will be subject to
certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Rights Agreement which are applicable to such a holder (including
certain indemnification obligations).
For so long as any Debentures are outstanding, the Issuers will continue to
provide to holders of the Debentures and to prospective purchasers of the
Debentures the information required by Rule 144A(d)(4) under the Securities
Act.
The foregoing description of the Registration Rights Agreement contains a
discussion of all material elements thereof, but does not purport to be
complete and is qualified in its entirety by reference to all provisions of
the Registration Rights Agreement. The Issuers will provide a copy of the
Registration Rights Agreement to holders of Debentures identified to the
Issuers by any Initial Purchasers upon request.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Issuers will accept any and all
Debentures validly tendered and not withdrawn prior to 5:00 p.m., New York
City time, on the Expiration Date. The Issuers will issue $1,000 principal
amount of Exchange Debentures in exchange for each $1,000 principal amount of
outstanding Debentures accepted in the Exchange Offer. Holders may tender some
or all of their Debentures pursuant to the Exchange Offer. However, Debentures
may be tendered only in integral multiples of $1,000.
The form and terms of the Exchange Debentures are the same as the form and
terms of the Debentures except that: (i) the Exchange Debentures bear a Series
B designation and a different CUSIP Number from the Debentures; (ii) the
Exchange Debentures have been registered under the Securities Act and hence
will not bear legends restricting the transfer thereof; and (iii) the holders
of the Exchange Debentures will not be entitled to certain rights under the
Registration Rights Agreement, including the provisions providing for an
increase in the interest rate on the Debentures in certain circumstances
relating to the timing of the Exchange Offer, all of which rights will
terminate when the Exchange Offer is terminated. The Exchange Debentures will
evidence the same debt as the Debentures and will be entitled to the benefits
of the Indenture.
As of the date of this Prospectus, $25,667,404 aggregate principal amount of
Debentures were outstanding. The Issuers have fixed the close of business on
, 1998 as the record date for the Exchange Offer for purposes of
determining the persons to whom this Prospectus and the Letter of Transmittal
will be mailed initially.
Holders of Debentures do not have any appraisal or dissenters' rights under
the Pennsylvania Revised Uniform Limited Partnership Act, the General
Corporation Law of Delaware or the Indenture in connection with
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the Exchange Offer. The Issuers intend to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
The Issuers shall be deemed to have accepted validly tendered Debentures
when, as and if the Issuers have given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the Exchange Debentures from the Issuers.
If any tendered Debentures are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Debentures will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Debentures in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of
Debentures pursuant to the Exchange Offer. The Issuers will pay all charges
and expenses, other than transfer taxes in certain circumstances, in
connection with the Exchange Offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Issuers, in their sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended. Notwithstanding the foregoing,
the Company will not extend the Expiration Date beyond , 1998.
In order to extend the Exchange Offer, the Issuers will notify the Exchange
Agent of any extension by oral or written notice and will mail to the
registered holders an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.
The Issuers reserve the right, in their sole discretion, (i) to delay
accepting any Debentures, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "--Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of
the Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral
or written notice thereof to the registered holders.
ACCRETION OF THE EXCHANGE DEBENTURES; INTEREST
The Debentures will continue to accrete at the rate of 13 3/8% per annum to,
compounded semi-annually to an aggregate principal amount of $48.0 million on
August 1, 2003. Any Debentures not tendered or accepted for exchange will
continue to accrete at the rate of 13 3/8% per annum in accordance with their
terms and will cease to accrete upon cancellation of the Debentures and
issuance of the Exchange Debentures. From and after the date of issuance of
the Exchange Debentures, the Exchange Debentures shall accrete at the rate of
13 3/8% per annum, but no cash interest will accrue or be payable in respect
of the Exchange Debentures prior to August 1, 2003. Thereafter, interest on
the Exchange Debentures will accrue on the principal amount at maturity at the
rate of 13 3/8% per annum and will be payable semi-annually on each February 1
and August 1, commencing February 1, 2004. Interest on the Exchange Debentures
will accrue from the most recent date to which interest has been paid or, if
no interest has been paid, from August 1, 2003. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months.
PROCEDURES FOR TENDERING
Only a holder of Debentures may tender such Debentures in the Exchange
Offer. To tender in the Exchange Offer, a holder must complete, sign and date
the Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of
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Transmittal or such facsimile, together with the Debentures and any other
required documents, to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date. To be tendered effectively, the Debentures,
Letter of Transmittal and other required documents must be completed and
received by the Exchange Agent at the address set forth below under "Exchange
Agent" prior to 5:00 p.m., New York City time, on the Expiration Date.
Delivery of the Debentures may be made by book-entry transfer in accordance
with the procedures described below. Confirmation of such book-entry transfer
must be received by the Exchange Agent prior to the Expiration Date.
By executing the Letter of Transmittal, each holder will make to the Issuers
the representations set forth in the eighth paragraph under the heading "--
Purpose and Effect of the Exchange Offer."
The tender by a holder and the acceptance thereof by the Issuers will
constitute agreement between such holder and the Issuers in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF DEBENTURES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE
RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO
CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR DEBENTURES SHOULD BE SENT TO THE
ISSUERS. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH
HOLDERS.
Any beneficial owner whose Debentures are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. See
"Instruction to Registered Holder and/or Book-Entry Transfer Facility
Participant from Owner" included with the Letter of Transmittal.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Debentures tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution. In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case
maybe, are required to be guaranteed, such guarantee must be by a member firm
of the Medallion System (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the registered
holder of any Debentures listed therein, such Debentures must be endorsed or
accompanied by a properly completed bond power, signed by such registered
holder as such registered holder's name appears on such Debentures with the
signature thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Debentures or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, offices of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Issuers of their authority to so act must be submitted with the Letter of
Transmittal.
The Issuers understand that the Exchange Agent will make a request promptly
after the date of this Prospectus to establish accounts with respect to the
Debentures at the book-entry transfer facility, The Depository Trust Company
(the "Book-Entry Transfer Facility"), for the purpose of facilitating the
Exchange Offer, and subject to the establishment thereof, any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of Debentures by causing such Book-Entry Transfer
Facility to transfer such Debentures into the Exchange Agent's account with
respect to the Debentures in accordance with
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<PAGE>
the Book-Entry Transfers Facility's procedures for such transfer. Although
delivery of the Debentures may be effected through book-entry transfer into
the Exchange Agent's account at the Book-Entry Transfer Facility, an
appropriate Letter of Transmittal properly completed and duly executed with
any required signature guarantee and all other required documents must in each
case be transmitted to and received or confirmed by the Exchange Agent at its
address set forth below on or prior to the Expiration Date, or, if the
guaranteed delivery procedures described below are complied with, within the
time period provided under such procedures. Delivery of documents to the Book-
Entry Transfer Facility does not constitute delivery to the Exchange Agent.
The Depositary and DTC have confirmed that the Exchange Offer is eligible
for the DTC Automated Tender Offer Program ("ATOP"). Accordingly, DTC
participants may electronically transmit their acceptance of the Exchange
Offer by causing DTC to transfer Debentures to the Depositary in accordance
with DTC's ATOP procedures for transfer. DTC will then send an Agent's Message
to the Depositary.
The term "Agent's Message" means a message transmitted by DTC, received by
the Depositary and forming part of the confirmation of a book-entry transfer,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering Debentures which are the subject of such book-
entry confirmation, that such participant has received and agrees to be bound
by the terms of the Letter of Transmittal and that the Issuers may enforce
such agreement against such participant. In the case of an Agent's Message
relating to guaranteed delivery, the term means a message transmitted by DTC
and received by the Depositary, which states that DTC has received an express
acknowledgment from the participant in DTC tendering Debentures that such
participant has received and agrees to be bound by the Notice of Guaranteed
Delivery.
Notwithstanding the foregoing, in order to validly tender in the Exchange
Offer with respect to Securities transferred pursuant to ATOP, a DTC
participant using ATOP must also properly complete and duly execute and
applicable Letter of Transmittal and deliver it to the Depositary. Pursuant to
authority granted by DTC, any DTC participant which has Debentures credited to
its DTC account at any time (and thereby held of record by DTC's nominee) may
directly provide a tender as though it were the registered holder by so
completing, executing and delivering the applicable Letter of Transmittal to
the Depositary. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Debentures and withdrawal of tendered
Debentures will be determined by the Issuers in their sole discretion, which
determination will be final and binding. The Issuers reserve the absolute
right to reject any and all Debentures not properly tendered or any Debentures
the Issuers' acceptance of which would, in the opinion of counsel for the
Issuers, be unlawful. The Issuers also reserves the right in their sole
discretion to waive any defects, irregularities or conditions of tender as to
particular Debentures. The Issuers' interpretation of the terms and conditions
of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Debentures must be
cured within such time as the Issuers shall determine. Although the Issuers
intend, to notify holders of defects or irregularities with respect to tenders
of Debentures, neither the Issuers, the Exchange Agent nor any other person
shall incur any liability for failure to give such notification. Tenders of
Debentures will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Debentures received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Debentures and (i) whose Debentures are not
immediately available, (ii) who cannot deliver their Debentures, the Letter of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
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(b) prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the certificate number(s)
of such Debentures and the principal amount of Debentures tendered, stating
that the tender is being made thereby and guaranteeing that, within five
New York Stock Exchange trading days after the Expiration Date, the Letter
of Transmittal (or facsimile thereof) together with the certificate(s)
representing the Debentures (or a confirmation of book-entry transfer of
such Debentures into the Exchange Agent's account at the Book-Entry
Transfer Facility), and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution with the Exchange
Agent; and
(c) such properly completed and executed Letter of Transmittal (of
facsimile thereof), as well as the certificate(s) representing all tendered
Debentures in proper form for transfer (or a confirmation of book-entry
transfer of such Debentures into the Exchange Agent's account at the Book-
Entry Transfer Facility), and all other documents required by the Letter of
Transmittal are received by the Exchange Agent upon five New York Stock
Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Debentures according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Debentures may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date. To
withdraw a tender of Debentures in the Exchange offer, a telegram, telex,
letter or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York
City time, on the Expiration Date. Any such notice of withdrawal must (i)
specify the name of the person having deposited the Debentures to be withdrawn
(the "Depositor"), (ii) identify the Debentures to be withdrawn (including the
certificate number(s) and principal amount of such Debentures, or, in the case
of Debentures transferred by book-entry transfer, the name and number of the
account at the Book-Entry Transfer Facility to be credited), (iii) be signed
by the holder in the same manner as the original signature on the Letter of
Transmittal by which such Debentures were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee with respect to the Debentures register the transfer of such
Debentures into the name of the person withdrawing the tender and (iv) specify
the name in which any such Debentures are to be registered, if different form
that of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Issuers,
whose determination shall be final and binding on all parties. Any Debentures
so withdrawn will be deemed not to have been validly tendered for purposes of
the Exchange Offer and no Exchange Debentures will be issued with respect
thereto unless the Debentures so withdrawn are validly retendered. Any
Debentures which have been tendered but which are not accepted for exchange
will be returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Debentures may be retendered by following
one of the procedures described above under "--Procedures for Tendering" at
any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Issuers shall not
be required to accept for exchange, or exchange Exchange Debentures for, any
Debentures, and may terminate or amend the Exchange Offer as provided herein
before the acceptance of such Debentures, if:
(a) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency with respect to the Exchange Offer
which, in the sole judgment of the Issuers, might materially impair the
ability of the Issuers to proceed with the Exchange Offer or any material
adverse development has occurred in any existing action or proceeding with
respect to the Issuers or any of their respective subsidiaries; or
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<PAGE>
(b) any law, statute, rule, regulation or interpretation by the staff of
the Commission is proposed, adopted or enacted, which, in the sole judgment
of the Issuers, might materially impair the ability of the Issuers to
proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Issuers; or
(c) any governmental approval has not been obtained, which approval the
Issuers shall, in their sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Issuers determine in their sole discretion that any of the conditions
are not satisfied, the Issuers may (i) refuse to accept any Debentures and
return all tendered Debentures to the tendering holders, (ii) extend the
Exchange Offer and retain all Debentures tendered prior to the expiration of
the Exchange Offer, subject, however, to the rights of holders to withdraw
such Debentures (see "--Withdrawal of Tenders") or (iii) waive such
unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Debentures which have not been withdrawn.
EXCHANGE AGENT
State Street Bank and Trust Company has been appointed as Exchange Agent for
the Exchange Offer. Questions and requests for assistance, requests for
additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notice of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
State Street Bank and Trust Company
Goodwin Square, 23rd Floor
225 Asylum Street
Hartford, CT 06103
Telecopier No.: 860-244-1889
Attention: Dennis Fisher
Delivery to an address other than as set forth above will not constitute a
valid delivery.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Issuers. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Issuers and their respective affiliates.
The Issuers have not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The Issuers however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection
therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Issuers. Such expenses include fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs,
among others.
ACCOUNTING TREATMENT
The Exchange Debentures will be recorded at the same carrying value as the
Debentures, which is face value less accrued original discount, as reflected
in the Issuers' accounting records on the date of exchange. Accordingly, no
gain or loss for accounting purposes will be recognized by the Issuers. The
expenses of the Exchange Offer will be capitalized and amortized to expense
over the term of the Exchange Debentures.
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CONSEQUENCES OF FAILURE TO EXCHANGE
The Debentures that are not exchanged for Exchange Debentures pursuant to
the Exchange Offer will remain restricted securities. Accordingly, such
Debentures may be resold only; (i) to the Issuers (upon redemption thereof or
otherwise); (ii) so long as the Debentures are eligible for resale pursuant to
Rule 144A, to a person inside the United States whom the seller reasonably
believes is a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act in a transaction meeting the requirements of Rule
144A, in accordance with Rule 144 under the Securities Act, or pursuant to
another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel reasonably acceptable to the Issuers);
(iii) outside the United States to a foreign person in a transaction meeting
the requirements of Rule 904 under the Securities Act; or (iv) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States.
RESALES OF THE EXCHANGE DEBENTURERS
With respect to resales of Exchange Debentures, based on interpretations by
the staff of the Commission set forth in no-action letters issued to third
parties, the Issuers believe that a holder or other person who receives
Exchange Debentures, whether or not such person is the holder (other than a
person that is an "affiliate" of either Holdings or AC Holdings Corp. within
the meaning of Rule 405 under the Securities Act) who receives Exchange
Debentures in exchange for Debentures in the ordinary course of business and
who is not participating, does not intend to participate, and has no
arrangement or understanding with person to participate, in the distribution
of the Exchange Debentures, will be allowed to resell the Exchange Debentures
to the public without further registration under the Securities Act and
without delivering to the purchasers of the Exchange Debentures a prospectus
that satisfies the requirements of Section 10 of the Securities Act. However,
if any holder acquires Exchange Debentures in the Exchange Offer for the
purpose of distributing or participating in a distribution of the Exchange
Debentures, such holder cannot rely on the position of the staff of the
Commission enunciated in such no-action letters or any similar interpretive
letters, and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction,
unless an exemption from registration is otherwise available. Further, each
Participating Broker-Dealer that receives Exchange Debentures for its own
account in exchange for Debentures, where such Debentures were acquired by
such Participating Broker-Dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange Debentures.
As contemplated by these no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent
to the Issuers in the Letter of Transmittal that (a) it is not an "affiliate"
of either Holdings or AC Holdings Corp. (within the meaning of Rule 405 of the
Securities Act); (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 Exchange Debentures to be issued in the Exchange Offer;
(c) it is acquiring the Exchange Debentures in its ordinary course of
business; and (d) if it is a Participating Broker-Dealer holding Debentures
acquired for its own account as a result of market-making activities or other
trading activities, it acknowledges that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of
Exchange Debentures received in respect of such Exchange Debentures pursuant
to the Exchange Offer. As indicated above, each Participating Broker-Dealer
that receives and Exchange Debenture for its own account in exchange for
Debentures must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Debentures. For a description of the
procedures for such resales by Participating Broker-Dealers, see "Plan of
Distribution."
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion (including the opinion of special counsel described
below) is based upon current provisions of the Internal Revenue Code of 1986,
as amended, applicable Treasury regulations, judicial authority and
administrative rulings and practice. There can be no assurance that the
Internal Revenue Service (the "Service") will not take a contrary view, and no
ruling from the Service has been or will be sought. Legislative, judicial or
administrative changes or interpretations may be forthcoming that could alter
or modify the statements and conditions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to holders. Certain holders (including insurance companies, tax-
exempt organizations, financial institutions, broker-dealers, foreign
corporations and persons who are not citizens or residents of the United
States) may be subject to special rules not discussed below. The Issuers
recommend that each holder consult such holder's own tax advisor as to the
particular tax consequences of exchanging such holder's Debentures for
Exchange Debentures, including the applicability and effect of any state,
local or foreign tax laws.
Kirkland & Ellis, special counsel to the Issuers, has advised the Issuers
that in its opinion, the exchange of the Debentures for Exchange Debentures
pursuant to the Exchange Offer will not be treated as an "exchange" for
federal income tax purposes because the Exchange Debentures will not be
considered to differ materially in kind or extent from the Debentures. Rather,
the Exchange Debentures received by a holder will be treated as a continuation
of the Debentures in the hands of such holder. As a result, there will be no
federal income tax consequences to holders exchanging Debentures for Exchange
Debentures pursuant to the Exchange Offer.
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PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives Exchange Debentures for its
own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of Exchange Debentures received in respect of such
Debentures pursuant to the Exchange Offer. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of Exchange Debentures received in
exchange for Debentures where such Debentures were acquired as a result of
market-making activities or other trading activities. The Issuers have agreed
that for a period of 180 days from the consummation of the Exchange Offer, it
will make this Prospectus, as amended or supplemented, available to any
Participating Broker-Dealer for use in connection with any such resale. In
addition, until , 1998, all dealers effecting transactions in the Exchange
Debentures may be required to deliver a prospectus.
The Issuers will not receive any proceeds from any sales of the Exchange
Debentures by Participating Broker-Dealers. Exchange Debentures received by
Participating Broker-Dealers for their own account pursuant to the Exchange
Offer may be sold from time to time in one or more transactions in the over-
the-counter market, in negotiated transactions, through the writing of options
on the Exchange Debentures or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchaser or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
Participating Broker-Dealer and/or the purchasers of any such Exchange
Debentures. Any Participating Broker-Dealer that resells the Exchange
Debentures that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Debentures may be deemed to be an "underwriter" within the
meaning of the Securities Act and any profit on any such resale of Exchange
Debentures and any commissions or concessions received by any such persons may
be deemed to be underwriting compensation a under the Securities Act. The
Letter of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
With respect to resales of Exchange Debentures, based on interpretations by
the staff of the Commission set forth in no-action letters issued to third
parties, the Issuers believe that a holder or other person who receives
Exchange Debentures, whether or not such person is the holder (other than a
person that is an "affiliate" of either Holdings or AC Holdings Corp. within
the meaning of Rule 405 under the Securities Act) who receives Exchange
Debentures in exchange for Debentures in the ordinary course of business and
who is not participating, does not intend to participate, and has no
arrangement or understanding with person to participate, in the distribution
of the Exchange Debentures, will be allowed to resell the Exchange Debentures
to the public without further registration under the Securities Act and
without delivering to the purchasers of the Exchange Debentures a prospectus
that satisfies the requirements of Section 10 of the Securities Act. However,
if any holder acquires Exchange Debentures in the Exchange Offer for the
purpose of distributing or participating in a distribution of the Exchange
Debentures, such holder cannot rely on the position of the staff of the
Commission enunciated in such no-action letters or any similar interpretive
letters, and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction
and such a secondary resale transaction should 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 under the
Securities Act, unless an exemption from registration is otherwise available.
Further, each Participating Broker-Dealer that receives Exchange Debentures
for its own account in exchange for Debentures, where such Debentures were
acquired by such Participating Broker-Dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Debentures. The
Issuers have agreed that, for a period of up to one year from the consummation
of the Exchange Offer, it will make this Prospectus available to any
Participating Broker-Dealer for use in connection with any such resale.
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LEGAL MATTERS
Certain legal matters in connection with the Exchange Debentures offered
hereby will be passed upon for the Issuers by Kirkland & Ellis, New York, New
York. Certain partners of Kirkland & Ellis indirectly own a portion of the
equity of Holdings.
EXPERTS
The consolidated financial statements of Anthony Crane Rental, L.P. and
subsidiaries for each of the three years in the period ended December 31,
1997, included in this Prospectus have been included herein in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
ANTHONY CRANE RENTAL, L.P. AND SUBSIDIARIES
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants......................................... F-2
Consolidated Balance Sheets as of December 31, 1996 and 1997 and June 30,
1998 (unaudited)......................................................... F-3
Consolidated Statements of Income for the years ended December 31, 1995,
1996 and 1997 and for the six month periods ended June 30, 1997 and 1998
(unaudited).............................................................. F-4
Consolidated Statements of Partners' Capital for the years ended December
31, 1995, 1996 and 1997 and for the six month period ended June 30, 1998
(unaudited).............................................................. F-5
Consolidated Statements of Cash Flows for the years ended December 31,
1995, 1996 and 1997 and for the six month periods ended June 30, 1997 and
1998 (unaudited)......................................................... F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Anthony Crane Rental, L.P.:
We have audited the accompanying consolidated balance sheets of Anthony
Crane Rental, L.P. and subsidiaries (collectively, the Partnership) as of
December 31, 1997 and 1996, and the related consolidated statements of income,
partners' capital, and cash flows for each of the three years in the period
ended December 31, 1997. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits 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 audits provide 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 Anthony Crane Rental, L.P. and subsidiaries as of December 31, 1997 and
1996, and the consolidated results of its operations and its cash flows for
each of the three years in the period ended December 31, 1997, in conformity
with generally accepted accounting principles.
As more fully discussed in Note 3 to the consolidated financial statements,
effective January 1, 1997, the Partnership revised its estimate of the salvage
values used for depreciating certain rental equipment. The effect of this
change was to decrease depreciation expense and increase net income for 1997
by approximately $5,650,000.
/s/ Coopers & Lybrand L.L.P.
Pittsburgh, Pennsylvania
February 25, 1998
F-2
<PAGE>
ANTHONY CRANE RENTAL, L.P.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
JUNE 30,
1998 1997 1996
----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................... $ 2,217 $ 4,375 $ 8,588
Trade accounts receivable, net of allowance
for doubtful accounts of $2,397, $1,840 and
$1,850 in 1998, 1997 and 1996,
respectively............................... 26,440 24,152 19,871
Receivable from sale of property (Note 3)... -- 6,055 --
Other receivables (Note 6).................. 2,142 2,596 2,010
Prepaid expenses and deposits............... 1,662 1,560 1,262
-------- -------- --------
Total current assets...................... 32,461 38,738 31,731
Rental equipment, net of accumulated
depreciation of $86,038, $82,322 and $77,181
in 1998, 1997 and 1996, respectively (Notes 3
and 5)....................................... 250,147 212,975 171,226
Property and equipment, net (Notes 4 and 5)... 50,889 51,859 35,068
Intangible assets, net of accumulated
amortization of $2,915, $2,661 and $2,273 in
1998, 1997 and 1996, respectively............ 1,611 1,865 1,868
Debt issuance costs, net of accumulated
amortization of $1,124, $926 and $566 in
1998, 1997 and 1996, respectively............ 805 1,003 711
Other assets (Note 6)......................... 2,787 488 635
-------- -------- --------
Total assets.............................. $338,700 $306,928 $241,239
======== ======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable--trade (Note 6)............ 16,711 8,603 3,559
Accrued interest............................ 3,065 2,530 1,953
Accrued wages and employee benefits......... 1,811 1,730 1,548
Accrued taxes, other than income taxes...... 4,024 3,669 1,027
Other accrued liabilities................... 935 1,450 1,001
Current portion of long-term debt (Note 5).. -- 7,500 4,000
Current portion of obligation under capital
lease (Note 7)............................. 94 94 --
-------- -------- --------
Total current liabilities................. 26,640 25,576 13,088
Long-term debt, less current portion (Note
5)........................................... 211,000 177,500 136,000
Long-term obligation under capital lease (Note
7)........................................... 822 867 --
Other non-current liabilities................. 1,573 1,569 1,290
-------- -------- --------
Total liabilities......................... 240,035 205,512 150,378
Commitments and contingencies (Notes 7 and 10)
Partners' capital:
General partner............................. 68,653 63,863 52,762
Limited partners............................ 33,918 41,453 41,892
Accumulated other comprehensive income...... 44 50 157
Related party receivables (Note 6).......... (3,950) (3,950) (3,950)
-------- -------- --------
Total partners' capital................... 98,665 101,416 90,861
-------- -------- --------
Total liabilities and partners'
capital................................ $338,700 $306,928 $241,239
======== ======== ========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
F-3
<PAGE>
ANTHONY CRANE RENTAL, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------- ----------------------------
1998 1997 1997 1996 1995
------- ------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Equipment rentals (Note 6)... $90,153 $73,693 $156,408 $128,161 $106,593
Equipment sales.............. 9,396 16,160 27,400 19,444 9,419
------- ------- -------- -------- --------
Total revenues............. 99,549 89,853 183,808 147,605 116,012
------- ------- -------- -------- --------
Cost of revenues:
Cost of equipment rentals
(Note 6).................... 54,040 46,010 97,036 78,049 62,533
Cost of equipment sales...... 7,687 10,295 15,541 13,643 7,039
------- ------- -------- -------- --------
Total cost of revenues..... 61,727 56,305 112,577 91,692 69,572
------- ------- -------- -------- --------
Gross profit................... 37,822 33,548 71,231 55,913 46,440
Selling, general and adminis-
trative expenses.............. 19,343 15,595 35,111 29,211 23,351
------- ------- -------- -------- --------
Income from operations......... 18,479 17,953 36,120 26,702 23,089
Interest expense............... 8,620 6,238 13,962 10,873 8,482
Other income................... (470) (508) (1,739) (69) (104)
------- ------- -------- -------- --------
Income before taxes............ 10,329 12,223 23,897 15,898 14,711
Provision (benefit) for state
taxes......................... 60 48 96 (102) 583
------- ------- -------- -------- --------
Net income..................... $10,269 $12,175 $ 23,801 $ 16,000 $ 14,128
======= ======= ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-4
<PAGE>
ANTHONY CRANE RENTAL, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
GENERAL LIMITED OTHER
COMPREHENSIVE PARTNER PARTNERS COMPREHENSIVE RELATED PARTY TOTAL PARTNERS'
INCOME CAPITAL CAPITAL INCOME (EXPENSE) RECEIVABLES CAPITAL
------------- ------- -------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994................. $38,780 $35,865 -- $(10,512) $64,133
Capital contributions........................ -- 25 -- 6,562 6,587
Partner withdrawals.......................... -- (4,851) -- -- (4,851)
Comprehensive income:
Net income.................................. $14,128 6,519 7,609 -- -- 14,128
Unrealized investment gain on securities.... 148 -- -- 148 -- 148
------- ------- ------- ---- -------- -------
Comprehensive income......................... $14,276
=======
Balance at December 31, 1995................. 45,299 38,648 148 (3,950) 80,145
Partner withdrawals.......................... -- (5,293) -- -- (5,293)
Comprehensive income:
Net income.................................. 16,000 7,463 8,537 -- -- 16,000
Unrealized investment gain on securities.... 9 -- -- 9 -- 9
------- ------- ------- ---- -------- -------
Comprehensive income......................... $16,009
=======
Balance at December 31, 1996................. 52,762 41,892 157 (3,950) 90,861
Partner withdrawals.......................... -- (13,139) -- -- (13,139)
Comprehensive income:
Net income.................................. 23,801 11,101 12,700 -- -- 23,801
Unrealized investment (loss) on
securities................................. (107) -- -- (107) -- (107)
------- ------- ------- ---- -------- -------
Comprehensive income......................... $23,694
=======
Balance at December 31, 1997................. 63,863 41,453 50 (3,950) 101,416
Partner withdrawals (unaudited).............. -- (13,014) -- -- (13,014)
Comprehensive income (unaudited):
Net income.................................. 10,269 4,790 5,479 -- -- 10,269
Unrealized investment (loss) on
securities................................. (6) -- -- (6) -- (6)
------- ------- ------- ---- -------- -------
Comprehensive income (unaudited)............. $10,263
=======
Balance at June 30, 1998 (unaudited)......... $68,653 $33,918 $ 44 $ (3,950) $98,665
- --------------------------------------------------
======= ======= ==== ======== =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-5
<PAGE>
ANTHONY CRANE RENTAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------ ----------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income................ $ 10,269 $ 12,175 $ 23,801 $ 16,000 $ 14,128
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization........... 12,813 10,137 22,264 22,302 17,909
Net (gains) on used
rental equipment
sales.................. (932) (5,102) (10,659) (3,926) (1,820)
Net (gains) losses on
other asset
dispositions........... (403) (467) (1,657) 29 --
Provision (benefit) for
bad debts.............. 830 (63) 428 1,071 1,293
Deferred income tax
provision (benefit).... 60 48 96 (102) 582
Increase (decrease) in
cash from changes in:
Trade accounts
receivable............. (3,118) (4,241) (4,709) (4,304) (4,759)
Other receivables....... 454 (347) (2,011) (571) 139
Prepaid expenses and
deposits............... (102) (338) (298) 670 (871)
Other non-current
assets................. -- -- 39 -- 17
Accounts payable--
trade.................. (5,257) (1,069) (447) 803 (228)
Accrued interest........ 535 1,025 577 278 125
Accrued wages and
employee benefits...... 81 27 182 664 302
Accrued taxes, other
than income taxes...... 355 (261) 2,642 (627) 1,262
Other accrued
liabilities............ (515) (524) 449 124 (384)
-------- -------- -------- -------- --------
Net cash provided by
operating
activities.......... 15,070 11,000 30,697 32,411 27,695
-------- -------- -------- -------- --------
Cash flows from investing
activities:
Cash paid for business
acquisitions............. -- (4,050) (4,050) (7,825) --
Proceeds from
sale/leaseback
transaction.............. -- -- -- 24,162 --
Proceeds from sale of
fixed assets, including
rental equipment......... 5,149 16,384 22,532 8,338 7,738
Proceeds from sale of
property................. 6,055 -- -- -- --
Capital expenditures...... (42,474) (38,794) (85,641) (81,195) (44,847)
Repayment of related party
loans, net............... -- -- -- 319 350
Other..................... (58) 204 183 (148) (148)
-------- -------- -------- -------- --------
Net cash used in
investing
activities.......... (31,328) (26,256) (66,976) (56,349) (36,907)
-------- -------- -------- -------- --------
Cash flows from financing
activities:
Proceeds from issuance of
debt..................... 26,000 77,330 108,000 56,500 21,000
Payments on debt.......... -- (59,000) (63,000) (24,500) (7,427)
Payments under capital
leases................... (45) (33) (74) -- --
Expenditures for debt
issuance cost and other
intangibles.............. (2,304) (705) (1,147) (337) --
Partner withdrawals....... (9,551) (6,423) (11,713) (5,293) (4,851)
-------- -------- -------- -------- --------
Net cash provided by
financing
activities.......... 14,100 11,169 32,066 26,370 8,722
-------- -------- -------- -------- --------
Net (decrease)
increase in cash and
cash equivalents.... (2,158) (4,087) (4,213) 2,432 (490)
Cash and cash equivalents,
beginning of period....... 4,375 8,588 8,588 6,156 6,646
-------- -------- -------- -------- --------
Cash and cash equivalents,
end of period............. $ 2,217 $ 4,501 $ 4,375 $ 8,588 $ 6,156
======== ======== ======== ======== ========
Supplemental disclosure of
cash flow information:
Cash paid during the
period for interest...... $ 7,888 $ 5,051 $ 13,026 $ 10,353 $ 8,101
======== ======== ======== ======== ========
Noncash investing and
financing activities:
Assets acquired under
capital lease
obligations.............. -- $ 1,035 $ 1,035 -- --
======== ======== ======== ======== ========
Expenditures for rental
equipment purchases
included in accounts
payable.................. $ 13,365 $ 3,109 $ 5,491 $ 1,478 $ 394
======== ======== ======== ======== ========
Receivable from sale of
property................. -- -- $ 6,055 -- --
======== ======== ======== ======== ========
Noncash partner
withdrawals.............. $ 3,463 $ 806 $ 1,426 -- --
======== ======== ======== ======== ========
Property and equipment
contributed by partners.. -- -- -- -- $ 6,562
======== ======== ======== ======== ========
Contributed capital
through advances......... -- -- -- -- $ 25
======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-6
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
1. DESCRIPTION OF BUSINESS
Anthony Crane Rental, L.P. and its subsidiaries (collectively, the
Partnership) are engaged in the rental of cranes and other heavy equipment
primarily for industrial maintenance and construction to a variety of
companies in the petrochemical, paper, steel, utility, mining and multiple
other industries. The Partnership provides twenty-four hour service, seven
days a week to customers principally in the United States. The Partnership
also sells new and used equipment to commercial construction, industrial and
residential users.
2. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the
Partnership and all of its subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.
The Partnership consists of Anthony Crane Rental, Inc., as general partner;
and ACR Acquisitions, Inc., Anthony Crane Rental of Georgia, Inc., Anthony
Crane Rental of Texas, Inc. and Anthony Iron and Metal Company, as limited
partners. All of these entities are under common control of Ray G. Anthony
(Mr. Anthony).
In addition, Mr. Anthony has a majority ownership interest in organizations
that engage in steel erection and installation (Century Steel Erectors, Inc.);
inspect, repair and manufacture overhead cranes (Century Crane and Hoist,
Inc.); rent cranes to mining operations (Republic Crane Rental, Inc.); and
sell motorcycles and service (Dallas Corporation). Mr. Anthony also owns a
fifty percent interest in Steel City Environmental Services, Inc., which
provides environmental remediation and transportation services to the steel
and petrochemical industries; Crane and Rigging Consultants, Inc., a lift
consulting company; and A & D Tower, Inc., a communications company, which is
a passive investment with no personal management control by Mr. Anthony. These
companies are not included in these consolidated financial statements.
PARTNERSHIP AGREEMENT
The term of the Partnership expires December 31, 2080; however, dissolution
will occur earlier in the event of the sale of substantially all of the
Partnership's assets or a disabling event as described in the Partnership
Agreement. Partners may not sell, assign, transfer or convey all or any
portion of their interest in the Partnership without the consent of the
general partner, or as specifically defined in the Partnership Agreement.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows, the Partnership
considers all highly liquid investments purchased with original maturities of
90 days or less to be cash equivalents.
INVESTMENT SECURITIES
Investment securities, included in other assets, are classified as available
for sale and are recorded at the aggregate fair market value determined at the
consolidated balance sheets date. Gross unrealized investment gains/losses are
included as a separate component of partners' capital.
RENTAL EQUIPMENT AND PROPERTY AND EQUIPMENT
Rental equipment and property and equipment are stated at cost less
accumulated depreciation.
Major renewals and improvements are charged to the property and equipment
accounts, while replacements, maintenance and repairs which do not improve or
extend the useful lives of the respective assets are expensed.
F-7
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
Upon disposition or retirement of property and equipment, the cost and the
related accumulated depreciation are removed from the accounts and any gain or
loss is recorded in results of operations. Depreciation of rental equipment
and property and equipment is computed using the straight-line method based on
the estimated useful lives of the assets.
Effective January 1, 1997, the Partnership revised its estimate of the
salvage values used for depreciating certain rental equipment, principally
cranes, to amounts ranging from 15% to 35%. Prior to 1997, the Partnership
depreciated this rental equipment over their estimated useful lives with no
salvage value. The Partnership believes this change in estimated salvage
values more appropriately allocates the costs of this rental equipment over
their estimated useful lives. The effect of this change was to decrease
depreciation expense and increase net income for 1997 by approximately $5,650.
All other rental equipment and property and equipment will continue to be
depreciated with no salvage value.
The useful lives of rental equipment and property and equipment are as
follows:
<TABLE>
<CAPTION>
LIFE
IN YEARS
--------
<S> <C>
Rental equipment:
Cranes, lifts and other heavy equipment........................ 8-12.5
Property and equipment:
Buildings and improvements..................................... 5-30
Motor vehicles and trailers.................................... 3-8
Aircraft....................................................... 15
Machinery and tools............................................ 3-8
Furniture, fixtures and office equipment ...................... 5-10
</TABLE>
INTANGIBLE ASSETS
Intangible assets consist of noncompetition agreements, customer lists,
trade names and goodwill related to various business acquisitions. These
assets are being amortized using the straight-line method over periods ranging
from 2 to 20 years. The Partnership periodically reviews the carrying value of
intangible assets and will recognize impairments when the expected future
operating cash flow derived from such intangible assets is less than their
carrying value.
REVENUE RECOGNITION
The Partnership rents equipment to commercial, industrial and government
customers by the day, month and longer terms. Revenue from equipment rentals
is earned over the corresponding rental period. In addition, the Partnership
generates revenue from equipment sales. Revenue from the sale of equipment is
recognized at the time of the execution of the sales agreement.
OTHER INCOME
Included in other income is approximately $1.4 million related to a net gain
on property sold by the Partnership during 1997.
INCOME TAXES
The partners included in the accompanying consolidated financial statements
have elected to be treated as either an S-corporation or a partnership for
federal income tax purposes.
F-8
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
Similar elections are made, where possible, for state income tax purposes.
Accordingly, all federal and certain state (except for Texas) income tax
liabilities are borne by the partners and, accordingly, are not reflected in
the accompanying consolidated financial statements.
Deferred income tax assets and liabilities are provided for state income tax
purposes for the temporary differences between the tax basis of assets and
liabilities and the financial reporting basis using enacted tax rates in
effect in the years in which these differences are expected to reverse. These
differences principally relate to depreciation and the reporting for certain
revenues and expenses.
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Partnership to
significant concentrations of credit risk consist primarily of cash and
accounts receivable. Concentrations of credit risk with respect to trade
accounts receivable are limited due to the large number of entities comprising
the Partnership's customer base and their geographic dispersion. The
Partnership generally does not require collateral on accounts receivable. As
of December 31, 1997 and 1996, the Partnership had no significant
concentrations of credit risk.
The Partnership maintains cash and cash equivalents with a limited number of
financial institutions located throughout the country in order to limit
exposure. No collateral or other security is provided on these deposits, other
than $100 of deposits insured by the Federal Deposit Insurance Corporation.
The Partnership's periodic evaluations of the relative credit standing of
these financial institutions are considered in the Partnership's business
strategy.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements. Estimates also affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," which establishes standards for reporting and
displaying comprehensive income and its components. This Statement requires
that all items that are required to be recognized under accounting standards
as components of comprehensive income be reported in a financial statement
that is displayed with the same prominence as other financial statements. The
provisions of SFAS No. 130 have been adopted in the six month period ended
June 30, 1998 and all years presented have been adjusted to reflect the
adoption. In the Partnership's case, comprehensive income includes net income
and unrealized investment gains and losses on securities.
The FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," which establishes standards for the way that public
business enterprises report information about operating
F-9
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
segments in annual financial statements and related disclosures about products
and services, geographic areas and major customers. SFAS No. 131 is effective
for fiscal years beginning after December 15, 1997. Accordingly, the
Partnership is not required to adopt this standard until the fiscal year
ending December 31, 1998. Management is currently evaluating the impact of
this standard on the consolidated financial statements.
The FASB issued SFAS No. 132, "Employers' Disclosures about Pensions and
other Postretirement Benefits," which revises employers' disclosures about
pension and other postretirement benefit plans by standardizing the disclosure
requirements for pensions and other postretirement benefits to the extent
practicable, requiring additional information on changes in the benefit
obligations and fair values of plan assets that will facilitate financial
analysis, and eliminating certain disclosures that are no longer as useful.
SFAS No. 132 is effective for fiscal years beginning after December 15, 1997.
Accordingly, the Partnership is not required to adopt this standard until the
fiscal year ending December 31, 1998. Management is currently evaluating the
impact of this standard on the consolidated financial statements.
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following as of December 31:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Land................................................... $ 8,438 $ 5,351
Buildings and improvements............................. 14,898 12,362
Motor vehicles and trailers............................ 29,986 15,560
Aircraft............................................... 1,889 3,549
Machinery and tools.................................... 3,562 3,414
Furniture, fixtures and office equipment............... 2,685 2,722
Spare equipment parts.................................. 5,016 4,041
-------- --------
66,474 46,999
Less accumulated depreciation and amortization......... (14,615) (11,931)
-------- --------
$ 51,859 $ 35,068
======== ========
</TABLE>
Depreciation expense for rental equipment and property and equipment was
approximately $21,405, $21,662 and $17,228 in 1997, 1996 and 1995,
respectively.
5. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, DECEMBER 31,
1998 1997 1996
----------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
8.5% Series A Senior Notes $20
million, due 2001 (A)................ $ 16,000 $ 16,000 $ 20,000
8.9% Series B Senior Notes $40
million, due 2006 (A)................ 40,000 40,000 40,000
8.9% Series C Senior Notes $22.5
million, due 2004 (B)................ 22,500 22,500 --
9.5% Series D Senior Notes $36.5
million, due 2009 (B)................ 36,500 36,500 --
Credit Agreement--Banks' Prime Rate
(C).................................. -- 10,000 --
Credit Agreement--LIBO (C)............ 96,000 60,000 80,000
-------- -------- --------
211,000 185,000 140,000
Less current portion of long-term
debt................................. -- 7,500 4,000
-------- -------- --------
$211,000 $177,500 $136,000
======== ======== ========
</TABLE>
F-10
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
(A) The $20 million and $40 million Senior Notes issued to various insurance
companies are due September 30, 2001 and 2006, respectively. On April 16,
1997, in connection with the issuance of the Senior Notes discussed in
item (B) below, the Series A and B Senior Notes were amended to change the
interest rates from 8.25% and 8.65% to 8.5% and 8.9%, respectively.
Interest payments are due semi-annually on March 31 and September 30. In
accordance with the note agreements, the Partnership is required to make
sinking funds payments of principal amounting to $4.0 million annually
beginning September 30, 1997 for Series A Senior Notes and $5.0 million
annually beginning September 30, 1999 for Series B Senior Notes.
(B) On April 16, 1997, the Partnership issued Series C and D Senior Notes to
various insurance companies. The $22.5 million Series C Senior Notes and
the $36.5 million Series D Senior Notes bear interest at 8.9% and 9.5%,
respectively. Interest payments are due semi-annually on April 15 and
October 15. The Series C and D Senior Notes mature on April 15, 2004 and
April 15, 2009, respectively.
(C) On September 23, 1994, the Partnership entered into a credit agreement
(Credit Agreement) by which two banks committed maximum borrowings of $40
million. The facilities bear interest at the banks' prime rate (8.5% at
December 31, 1997) or the London Interbank Offered Rate (LIBO) plus 1.25%
for specified periods if elected by the Partnership. The interest rate in
effect for borrowings at LIBO was 7.1875% at December 31, 1997.
During 1996 and 1995, the banks committed an additional $55 million and $15
million, respectively, increasing the commitment under the facilities to
$110 million with the same terms. The credit agreement matures in September
1998 at which time, at the Partnership's election, the credit agreement can
be converted into a term loan payable over five years. Management
anticipates that they will convert the credit agreement into a term loan,
therefore, the principal debt maturities in the table below are reflected
over a five-year period beginning in 1998.
The Partnership's debt agreements contain various covenants related to the
maintenance of certain financial ratios, tangible net worth, additional
indebtedness, fixed charges, and maintenance of cash balances. Additionally,
all of the outstanding debt under the Company's Senior Notes and Credit
Agreement are guaranteed on a full, unconditional and joint and several basis
by all of the Company's subsidiaries (Guarantor Subsidiaries).
The aggregate principal debt maturities of long-term debt for the next five
years are as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
1998......................... $ -- $ 7,500
1999......................... -- 23,000
2000......................... -- 27,500
2001......................... -- 27,500
2002......................... -- 28,062
Thereafter................... 211,000 71,438
-------- --------
$211,000 $185,000
======== ========
</TABLE>
6. RELATED PARTY TRANSACTIONS
The Partnership periodically rents and sells equipment to affiliated
companies. Rental revenues from such transactions totaled $682, $423 and $639
and gross proceeds from equipment sales totaled $119, $45 and $22 in 1997,
1996 and 1995, respectively. In addition, the Partnership rents equipment,
utilizes personnel and purchases equipment from affiliated companies. Expenses
from such transactions totaled $652, $198 and $366 in 1997, 1996 and 1995,
respectively, and purchases of equipment totaled $218 and $50 in 1997 and
1996, respectively. There were no equipment purchases in 1995.
F-11
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
The following is a summary of amounts due from/to related parties as of
December 31, 1997 and 1996, exclusive of amounts classified as a reduction of
partners' capital:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Due from:
Ray G. Anthony................................................ $-- $806
Century Steel Erectors, Inc. (CSE)............................ 115 44
Steel City Environmental Services, Inc. (SCE)................. 26 21
Republic Crane Rental, Inc. (Republic)........................ -- 14
Lindsay Crane................................................. 28 --
Insurance Salvors Corp. ...................................... 19 --
---- ----
$188 $885
==== ====
Long-term notes receivable from:
SCE........................................................... 300 300
Century Crane and Hoist, Inc. ................................ 81 81
---- ----
$381 $381
==== ====
Due to:
Republic...................................................... -- 33
Lindsay Crane................................................. 13 --
---- ----
$ 13 $ 33
==== ====
</TABLE>
The Partnership periodically has made advances to Mr. Anthony. Such
advances, which totaled $3,950 at December 31, 1997 and 1996, have no specific
repayment terms and have been classified as a reduction of partners' capital
in the accompanying consolidated balance sheets. For federal income tax
purposes, the advances are treated as distributions to Anthony Iron and Metal
Company. In addition, during 1997, advances and other receivables due from Mr.
Anthony totaling $806 were charged to the partners' capital account.
7. LEASE COMMITMENTS:
The Partnership leases various pieces of equipment under long-term operating
lease agreements with third parties.
In addition, during December 1996, the Partnership entered into an agreement
for the sale and leaseback of certain cranes, lifts and other heavy equipment.
The Partnership has purchase and lease renewal options at future fair market
values under the agreement. The lease is classified as an operating lease in
accordance with SFAS No. 13, "Accounting for Leases." The net book value of
the equipment totaling approximately $24 million has been removed from the
accompanying consolidated balance sheets. There was no gain or loss on the
transaction. Rentals under this agreement approximate $3,141 annually through
January 2004.
The approximate future minimum lease payments under these agreements are as
follows:
<TABLE>
<S> <C>
Year ending December 31:
1998......................................... $ 4,765
1999......................................... 4,744
2000......................................... 4,744
2001......................................... 4,744
2002......................................... 4,744
Thereafter................................... 3,942
</TABLE>
F-12
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
Total rental expense for all leases, including the related party rentals
discussed in Note 6, approximated $5,060, $2,091 and $1,739 in 1997, 1996 and
1995, respectively.
In April 1997, the Partnership entered into a capital lease agreement for
the lease of twenty trucks. The lease has a term of three years with a bargain
purchase option at the end of the lease agreement. Interest rates under the
capital lease agreement range from approximately 19% to 22%.
The following is a schedule of future minimum lease payments under the
capital lease agreement together with the present value of the net minimum
lease payments as of December 31, 1997:
<TABLE>
<S> <C>
Year ending December 31:
1998.......................................... $ 287
1999.......................................... 287
2000.......................................... 806
------
Total minimum lease payments.................... 1,380
Less amount representing interest............... 419
------
Present value of minimum lease payments......... 961
Less current portion............................ 94
------
$ 867
======
</TABLE>
Included in rental equipment is cost and accumulated depreciation for these
leased trucks of approximately $1,035 and $86, respectively, at December 31,
1997.
8. BUSINESS ACQUISITIONS
In 1997 and 1996, the Partnership entered into various purchase agreements
to acquire certain tangible and intangible assets from unrelated parties. The
total purchase price for the acquisitions was $4,050 and $7,825 for 1997 and
1996, respectively. These acquisitions were accounted for under the purchase
method of accounting and, accordingly, the purchase price has been allocated
to the assets acquired, principally consisting of equipment, based on their
estimated fair values at the date of acquisition.
The operating results of these acquisitions were included in the
Partnership's consolidated results of operations from the date of acquisition.
Certain required pro forma financial information related to the above
acquisitions has not been presented since the acquisitions were not material
to the Partnership's consolidated financial position or its consolidated
results of operations.
9. EMPLOYEE BENEFIT PLANS
The Partnership has a profit-sharing defined contribution pension plan for
all affiliated companies. The plan covers all non-union employees of the
Partnership. The contribution to the plan is an amount determined by the
Partnership. The contribution for 1997, 1996 and 1995 was one percent of the
eligible participant's compensation.
The plan also includes a 401(k) savings plan feature that enables employees
to make voluntary salary reduction contributions up to 15% of eligible
compensation to the plan. The Partnership will match fifty percent of the
contributions, up to six percent of the participant's compensation.
The Partnership's total expense for the profit-sharing and 401(k) savings
plans was approximately $583, $380 and $220 in 1997, 1996 and 1995,
respectively.
F-13
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
Union employees of the Partnership are covered by various union-sponsored,
collectively bargained, benefit plans. The Partnership's contributions to
these multi-employer plans are based on specified amounts per hours worked by
the covered union employees. One such plan is underfunded and the unfunded
amount is being funded through ongoing contributions by all sponsoring
companies. Under certain circumstances, the Partnership may have to accelerate
such funding. In 1997, the Partnership paid approximately $600 towards its
share of the underfunded plan. Union employees receive union-sponsored
benefits such as pension benefits, health and welfare benefits, annuity
benefits, industry advancement and apprentice training. The total cost of
these union benefits approximated $6,162, $4,339 and $3,632 in 1997, 1996 and
1995, respectively.
The Partnership also has a deferred compensation plan for certain eligible
employees and members of the board of advisors. The participants are credited
with one percent of after-tax income annually and vest in annual contributions
if employed at year-end. The Partnership has purchased insurance contracts to
satisfy all future liabilities relating to the Plan. The Partnership's expense
for the deferred compensation plan for 1997, 1996 and 1995 was approximately
$250, $340 and $261, respectively.
10. CONTINGENCIES
The Partnership is involved in various claims and legal actions arising in
the ordinary course of business. The ultimate liability from these
contingencies cannot be determined because of the uncertainties that exist.
Therefore, it is possible that, upon settlement, consolidated results of
operations in a particular period could be materially affected by these
contingencies. Certain of these matters may be covered under the Partnership's
insurance coverage. However, in the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
consolidated financial position or consolidated results of operation of the
Partnership.
11. DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has the following types of financial instruments:
. Cash and cash equivalents
. Accounts receivable
. Accounts payable
. Debt
Due to the short maturity of cash and cash equivalents, accounts receivable
and accounts payable, their carrying values approximate their fair value.
Based on the interest rates available at December 31, 1997, management
believes that the carrying amount of its long-term debt approximates fair
value.
F-14
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
12. SUBSIDIARY GUARANTORS
All of the Guarantor Subsidiaries are wholly owned and all of the
outstanding debt under the Company's Senior Notes and Credit Agreement are
guaranteed on a full, unconditional and joint and several basis by all of the
Guarantor Subsidiaries. The following consolidated condensed financial
information presents the financial position, results of operations and cash
flows for the Parent Company and Guarantor Subsidiaries as of and for the six
month period ended June 30, 1998 and as of and for the year ended December 31,
1997. The Guarantor Subsidiaries began operations in August 1996, and
therefore, constitute only five months of activity in 1996. Management does
not believe that the financial information for 1996 is meaningful for an
understanding of the financial contribution of the Guarantor Subsidiaries.
<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
------------------------------------------------ ------------------------------------------------
PARENT GUARANTOR INTERCOMPANY PARENT GUARANTOR INTERCOMPANY
COMPANY SUBSIDIARIES ELIMINATIONS CONSOLIDATED COMPANY SUBSIDIARIES ELIMINATIONS CONSOLIDATED
BALANCE SHEETS -------- ------------ ------------ ------------ -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total current assets.... $ 33,894 $ 1,666 $(3,099) $ 32,461 $ 42,260 $ 1,747 $(5,269) $ 38,738
Rental equipment, net of
accumulated
depreciation........... 242,646 7,501 -- 250,147 205,412 7,563 -- 212,975
Property and equipment,
net.................... 49,638 1,251 -- 50,889 50,320 1,539 -- 51,859
Other Assets............ 5,064 139 -- 5,203 3,194 162 -- 3,356
-------- ------- ------- -------- -------- ------- ------- --------
Total assets........... $331,242 $10,557 $(3,099) $338,700 $301,186 $11,011 $(5,269) $306,928
======== ======= ======= ======== ======== ======= ======= ========
LIABILITIES AND
PARTNERS' CAPITAL......
Total current
liabilities............ 26,492 3,247 (3,099) 26,640 25,436 5,409 (5,269) 25,576
Long-term debt, less
current portion........ 211,000 -- -- 211,000 177,500 -- -- 177,500
Other non-current....... 2,395 -- -- 2,395 2,436 -- -- 2,436
-------- ------- ------- -------- -------- ------- ------- --------
Total liabilities...... 239,887 3,247 (3,099) 240,035 205,372 5,409 (5,269) 205,512
Partners' Capital....... 91,355 7,310 -- 98,665 95,814 5,602 -- 101,416
-------- ------- ------- -------- -------- ------- ------- --------
Total liabilities and
partners' capital..... $331,242 $10,557 $(3,099) $338,700 $301,186 $11,011 $(5,269) $306,928
======== ======= ======= ======== ======== ======= ======= ========
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
------------------------------------------------ ------------------------------------------------
PARENT GUARANTOR INTERCOMPANY PARENT GUARANTOR INTERCOMPANY
COMPANY SUBSIDIARIES ELIMINATIONS CONSOLIDATED COMPANY SUBSIDIARIES ELIMINATIONS CONSOLIDATED
STATEMENTS OF INCOME -------- ------------ ------------ ------------ -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues
Equipment rentals...... $ 84,853 $ 5,300 -- $ 90,153 $145,985 $10,423 -- $156,408
Equipment sales........ 9,308 88 -- 9,396 27,400 -- -- 27,400
-------- ------- ------- -------- -------- ------- ------- --------
Total revenues....... 94,161 5,388 -- 99,549 173,385 10,423 -- 183,808
Cost of revenues........
Cost of equipment
rentals............... 51,634 2,406 -- 54,040 92,148 4,888 -- 97,036
Cost of equipment
sales................. 7,605 82 -- 7,687 15,541 -- -- 15,541
-------- ------- ------- -------- -------- ------- ------- --------
Total cost of
revenues............ 59,239 2,488 -- 61,727 107,689 4,888 -- 112,577
Gross profit............ 34,922 2,900 -- 37,822 65,696 5,535 -- 71,231
Selling, general, and
administrative......... 18,465 878 -- 19,343 33,067 2,044 -- 35,111
-------- ------- ------- -------- -------- ------- ------- --------
Income from operations.. 16,457 2,022 -- 18,479 32,629 3,491 -- 36,120
Interest expense........ 8,307 313 -- 8,620 13,422 540 -- 13,962
Other income............ (470) -- -- (470) (1,739) -- -- (1,739)
-------- ------- ------- -------- -------- ------- ------- --------
Income before taxes..... 8,620 1,709 -- 10,329 20,946 2,951 -- 23,897
Provision (benefit) for
state taxes............ 60 -- -- 60 96 -- -- 96
-------- ------- ------- -------- -------- ------- ------- --------
Net income.............. $ 8,560 $ 1,709 -- $ 10,269 $ 20,850 $ 2,951 -- $ 23,801
======== ======= ======= ======== ======== ======= ======= ========
</TABLE>
F-15
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
------------------------------------------------ ------------------------------------------------
PARENT GUARANTOR INTERCOMPANY PARENT GUARANTOR INTERCOMPANY
STATEMENTS OF COMPANY SUBSIDIARIES ELIMINATIONS CONSOLIDATED COMPANY SUBSIDIARIES ELIMINATIONS CONSOLIDATED
CASH FLOWS -------- ------------ ------------ ------------ -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net cash provided by
operating
activities........... $ 14,907 $ 163 -- $ 15,070 $ 29,399 $1,298 -- $ 30,697
-------- ------ --- -------- -------- ------ --- --------
Cash flows from
investing
activities...........
Capital
expenditures........ (42,181) (293) -- (42,474) (85,297) (344) -- (85,641)
Other investing
activities.......... 11,040 106 -- 11,146 18,665 -- -- 18,665
-------- ------ --- -------- -------- ------ --- --------
Net cash provided by
investing
activities........... $(31,141) $ (187) -- $(31,328) $(66,632) $ (344) -- $(66,976)
-------- ------ --- -------- -------- ------ --- --------
Net cash provided by
financing
activities........... $ 14,100 -- -- $ 14,100 $ 32,066 -- -- $ 32,066
-------- ------ --- -------- -------- ------ --- --------
Net increase
(decrease) in cash
and cash
equivalents.......... (2,134) (24) -- (2,158) (5,167) 954 -- (4,213)
Cash and cash
equivalents,
beginning of period.. 3,133 1,242 -- 4,375 8,300 288 -- 8,588
-------- ------ --- -------- -------- ------ --- --------
Cash and cash
equivalents, end of
period............... $ 999 $1,218 -- $ 2,217 $ 3,133 $1,242 -- $ 4,375
-------- ------ --- -------- -------- ------ --- --------
Supplemental
disclosure of cash
flow information:
Cash paid during the
period for interest.. $ 7,888 -- -- $ 7,888 $ 13,026 -- -- $ 13,026
======== ====== === ======== ======== ====== === ========
</TABLE>
13. UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION
The unaudited consolidated balance sheet as of June 30, 1998, and the
unaudited consolidated statements of income, partners' capital and cash flows
for the six months ended June 30, 1998 and the unaudited consolidated
statements of income and cash flows for the six months ended June 30, 1997, in
the opinion of management, have been prepared on the same basis as the audited
consolidated financial statements and include all significant adjustments
(consisting primarily of normal recurring adjustments) considered necessary
for a fair presentation of the results of these interim periods. Operating
results for the six month period ended June 30, 1998 are not necessarily
indicative of the results for the entire year.
On June 1, 1998, the Partnership entered into a recapitalization agreement
with Bain/ACR, L.L.C. (Bain), pursuant to which Bain and certain members of
senior management of the Partnership (collectively the "Equity Investor")
indirectly acquired an approximately 82% ownership interest in the
Partnership. Effective July 22, 1998, the recapitalization was consumated and
the Partnership incurred new debt obligations, repaid its outstanding Senior
Notes and Credit Agreement obligations (Note 5), restructured certain of its
outstanding Partnership interests and distributed approximately $122.0 million
in cash and property with a net book value of approximately $3.6 million to
the previous owners. In connection with the repayment of its outstanding debt
obligations, the Partnership incurred approximately $15.1 million in
prepayment penalties.
The recapitalization was funded by: (i) a notes offering with gross proceeds
of $155 million, (ii) a discount debentures offering with proceeds of $25
million (iii) a $33.6 million contribution by the Equity Investor, (iv) $125
million of borrowings under a revolving credit facility of a new senior credit
facility, (v) $50 million of borrowings under the term loan facility of a new
senior credit facility, and (vi) the issuance of $22.5 million of Senior
Preferred Units of Holdings to the previous majority owner.
F-16
<PAGE>
ANTHONY CRANE RENTAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)
The $155 million note offering consisted of 10 3/8% Senior Notes due 2008,
the discount debentures offering consisted of 13 3/8% Senior Discount
Debentures due 2009 and the new senior credit facilities provides up to $325.0
million in borrowings under a non-amortizing revolving credit facility and
non-amortizing term loan facility, which mature in 2004 and 2006,
respectively. At the Partnership's option, loans under the new senior credit
facilities bear interest at either the Base Rate (as defined in the agreement)
or the reserve-adjusted LIBO plus a margin of 2.25%. As a result of the
refinancing of the Senior Notes and Credit Agreement, at June 30, 1998, the
Partnership has reclassified $7.5 million of debt from current to long-term in
accordance with the terms of the new Senior Notes and senior credit
facilities.
The Partnership is currently investigating soil and groundwater
contamination at its Savannah, Georgia location from underground storage tanks
removed in 1994. Clean up activities associated with the contamination are
covered under the Georgia Underground Storage Tank Trust Fund (GUST). While
the ultimate costs of any remediation or continued monitoring are not yet
known, the Partnership expects that it will receive reimbursement for such
costs from the GUST. The reimbursement limit under the Trust Fund is $1
million. The Partnership believes that it is unlikely that its costs will
exceed the reimbursement limit.
F-17
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH IN-
FORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE ISSUERS OR THE INITIAL PURCHASERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER
THAN THE SECURITIES TO WHICH IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDIC-
TION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AF-
FAIRS OF THE COMPANY OR THE ISSUERS SINCE THE DATE HEREOF OR THAT THE INFORMA-
TION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary........................................................ 1
Risk Factors.............................................................. 14
The Transactions.......................................................... 21
Use of Proceeds........................................................... 23
Capitalization............................................................ 24
Unaudited Pro Forma Consolidated Financial Data........................... 25
Selected Historical Consolidated Financial Data........................... 33
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 34
Business.................................................................. 43
Management................................................................ 52
Security Ownership........................................................ 56
Certain Relationships and Related Transactions............................ 58
Description of Certain Indebtedness....................................... 60
Description of Exchange Debentures........................................ 63
The Exchange Offer........................................................ 93
Certain United States Federal Income Tax Considerations................... 102
Plan of Distribution...................................................... 103
Legal Matters............................................................. 104
Experts................................................................... 104
Index to Consolidated Financial Statements................................ F-1
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$48,000,000
LOGO
ANTHONY CRANE RENTAL HOLDINGS, L.P.
ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
13 3/8% SENIOR DISCOUNT DEBENTURES DUE 2009
----------------
PROSPECTUS
----------------
, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Anthony Crane Rental Holdings, L.P. (the "Company") is a limited partnership
organized under the laws of the State of Pennsylvania. Section 8510 of the
Pennsylvania Revised Uniform Limited Partnership Act (the "Pennsylvania
RULPA") provides that, subject to such standards and restrictions, if any, as
are set forth in its partnership agreement, a limited partnership may, and
shall have the power to, indemnify and hold harmless any partner or other
persons from and against any and all claims and demands whatsoever; provided,
however, that such indemnification shall not be made in any case where the act
or failure to act giving rise to the claim for indemnification is determined
by a court to have constituted willful misconduct or recklessness.
Section 5.10 of the Company's Amended and Restated Limited Partnership
Agreement (the "Limited Partnership Agreement") provides, among other things,
that:
(a) The Partnership shall indemnify and hold harmless the General partner
and each Affiliate, officer, director, controlling person, partner, employee
or shareholder of the General Partner ("Indemnified Person") from and against
any and all losses, claims, damages, liabilities, expenses (including
reasonable legal fees and expenses), judgments, fines, settlements and other
amounts relating to any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, which
relate in any way to the General Partner's status or activities of the General
Partner or to the Partnership's property, business or affairs ("Claims"). An
Indemnified Person's expenses paid or incurred in defending itself against any
Claim shall be reimbursed as paid or incurred. A Person shall be considered an
Indemnified Person whether or not such Person has the status required to be an
Indemnified Person at the time any such Claim is made or maintained as long as
such person had the status of an Indemnified Person at the time the events
which gave rise to the Claim occurred. This Section 5.10 shall not apply with
respect to any Indemnified Person for that portion of any Claim determined by
the final decision (from which an appeal cannot be taken or is not taken on a
timely basis) of a court of competent jurisdiction to have been caused by his
or its gross negligence, willful misconduct or knowing violation of law. Any
payments made to or on behalf of a Person who is later determined not to be
entitled to such payments shall be refunded to the Partnership promptly
following such determination. Nothing contained in this Section 5.10 shall
obligate any Limited Partner to pay any amount to the Partnership or to any
Indemnified Person in excess of his Capital Contribution.
(b) The right to indemnification and the advancement of expenses conferred
in this Section 5.10 shall not be exclusive of any other right which any
Person may have or hereafter acquire under any statute, agreement, vote of
Partners or otherwise.
(c) The Partnership may maintain insurance, at its expense, to protect any
Person against any expense, liability or loss, to the extent that the
Partnership would have the power to indemnify such Person against such
expense, liability or loss under the Pennsylvania RULPA.
The Pennsylvania RULPA defines "Person" as an individual or a corporation,
partnership, limited liability company, trust, unincorporated organization,
association or other entity.
Section 5.11 of the Company's Limited Partnership Agreement further provides
that except as provided in Section 5.10, an Indemnified Person shall not be
liable to the Partnership or any Partner for any act or omission performed or
omitted by such Person pursuant to authority granted to such Person by this
Agreement; provided that such limitation of liability shall not apply to the
extent the act or omission was attributable to such Person's negligence,
willful misconduct or knowing violation of law. The General Partner may
exercise any of the powers granted to it by this Agreement and perform any of
the duties imposed upon it hereunder either directly or by or through its
agents, and the General Partner shall not be responsible for any misconduct or
negligence on the part of any such agent appointed by the General Partner (so
long as such agent was selected in good faith and with due care) to the extent
that such agent's misconduct or negligence is not caused by and does not arise
out of the General Partner's misconduct or negligence in supervising the
activities of such agent.
II-1
<PAGE>
Anthony Crane Holdings Capital Corporation (the "Corporation") is a Delaware
corporation. Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL") provides that a Delaware corporation may indemnify any
person who were, are or are threatened to be made, parties to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative of investigative (other than an action by or in the right of
such corporation), by reason of the fact that such person is or was an
officer, director, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent
of another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding, provided such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's
best interests and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was illegal. A Delaware
corporation may indemnify any persons who are, were or are threatened to be
made, a party to any threatened, pending or completed action or suit by or in
the right of the corporation by reasons of the fact that such person was a
director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent
of another corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit, provided such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests, provided that no indemnification
is permitted without judicial approval if the officer, director, employee or
agent is adjudged to be liable to the corporation. Where an officer, director,
employee or agent is successful on the merits or otherwise in the defense of
any action referred to above, the corporation must indemnify him against the
expenses which such officer or director has actually and reasonably incurred.
The Certificate of Incorporation of the Corporation provides that to the
fullest extent permitted by the provisions of (S)145 of the General
Corporation Law of the State of Delaware, as the same exists or may thereafter
be amended, the Corporation shall indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure
to the benefit of the heirs, executors, and administrators of such a person.
Article VI of the Bylaws of the Corporation provides that every director and
officer of the Corporation shall be entitled as of right to be indemnified by
the Corporation against all expenses, liability and loss (including without
limitation, attorney's fees, judgments, fines, taxes, penalties and amounts
paid in settlement) paid or incurred by such person in connection with any
actual or threatened claim, action, suit or proceeding, civil, criminal,
administrative, investigative or other, whether brought by or in the right of
the Corporation or otherwise, in which he may be involved, as a party or
otherwise, by reason of such person being or having been a director or officer
of the Corporation or by reason of the fact such person is or was serving at
the request of the Corporation as a director, officer, employee, fiduciary or
other representative of another domestic or foreign corporation for profit or
not-for-profit, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise (such claim, action, suit or proceeding hereinafter
being referred to as an "Action" to the fullest extent authorized by the DGCL
as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than such law permitted prior to such
amendment); provided, that no such right of indemnification shall exist with
respect to an Action brought by an Indemnitee (as hereinafter defined) against
the Corporation except as provided in the last sentence of this Section.
Persons who are not directors or officers of the Corporation may be similarly
indemnified in respect of service to the Corporation or to another such entity
at the request of the Corporation to the extent the Board of Directors at any
time denominates any of such persons as entitled to the benefits of this
Article VI. As used in this Article VI, "Indemnitee" shall include each
director and officer of the Corporation and each other person denominated by
the Board of Directors as entitled to the benefits of
II-2
<PAGE>
this Article VI. An Indemnitee shall be entitled to be indemnified pursuant to
this Section for expenses incurred in connection with any Action brought by
such Indemnitee against the Corporation only if the Action is a claim for
indemnity or expenses under Section 3 of this Article VI or otherwise and
either (i) the Indemnitee is successful in whole or in part in the Action for
which expenses are claimed or (ii) the indemnification for expenses is
included in a settlement of the Action or is awarded by a court.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation
or enterprise, against any liability asserted against him and incurred by him
in any such capacity, arising out of his status as such, whether or not the
corporation would otherwise have the power to indemnify him under Section 145.
The Corporation's Bylaws provide for the maintenance of insurance under the
circumstances described in Section 145.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrants pursuant to the foregoing provisions, the registrants have been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
II-3
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS.
<TABLE>
<C> <S>
2.1 Recapitalization Agreement, dated as of June 1, 1998, by and among
Anthony Crane Rental, L.P., Bain/ACR, L.L.C., ACR Management, L.L.C.
and the current owners named therein.*
3.1 Certificate of limited partnership of Anthony Crane Rental Holdings,
L.P.*
3.2 Amended and Restated Agreement of Limited Partnership of Anthony Crane
Rental Holdings, L.P.*
3.3 Certificate of Incorporation of Anthony Crane Holdings Capital
Corporation.*
3.4 Bylaws of Anthony Crane Holdings Capital Corporation.*
4.1 Indenture, dated as of July 22, 1998, by and among Anthony Crane Rental
Holdings, L.P., Anthony Crane Holdings Capital Corporation and State
Street Bank and Trust Company.*
5.1 Opinion and Consent of Kirkland & Ellis.**
8.1 Opinion of Kirkland & Ellis as to federal income tax consequences.**
10.1 Purchase Agreement, dated as of July 16, 1998, by and among Anthony
Crane Rental Holdings, L.P., Anthony Crane Holdings Capital Corporation
and the Initial Purchasers.*
10.2 Registration Rights Agreement, dated as of July 22, 1998, by and among
Anthony Crane Rental Holdings, L.P., Anthony Crane Holdings Capital
Corporation and the Initial Purchasers.*
10.3 Revolving Credit Agreement, dated as of July 22, 1998, among Anthony
Crane Rental, L.P., Anthony Crane Rental Holdings, L.P., the several
banks or other financial institutions or entities from time to time
parties to this Agreement, Goldman Sachs Credit Partners L.P., Fleet
National Bank and DLJ Capital Funding, Inc.*
10.4 Term Loan Credit Agreement, dated as of July 22, 1998, among Anthony
Crane Rental, L.P., Anthony Crane Rental Holdings, L.P., the several
banks or other financial institutions or entities from time to time
parties to this Agreement, Goldman Sachs Credit Partners, L.P., Fleet
National Bank and DLJ Capital Funding, Inc.*
10.5 Securityholders Agreement, dated as of July 22, 1998, by and among ACR
Management, L.L.C., Anthony Crane Rental Holdings, L.P. and the
Securityholders.*
10.6 Registration Rights Agreement, made as of July 22, 1998, by and among
Anthony Crane Rental Holdings, L.P., ACR Management, L.L.C., Bain/ACR,
L.L.C. and the Current Owners.*
10.7 Advisory Agreement, dated as of July 22, 1998, by and among Bain
Capital, Inc., Anthony Crane Rental Holdings, L.P. and Anthony Crane
Rental, L.P.*
10.8 Escrow Agreement, dated as of July 22, 1998, by and among Anthony Crane
Rental, L.P., Anthony Iron & Metal Company, David W. Mahokey and Brown
Brothers Harriman & Co.*
10.9 Amended and Restated Agreement of Limited Partnership of Anthony Crane
Rental, L.P.*
10.10 Indenture, dated as of July 22, 1998, among Anthony Crane Rental, L.P.,
Anthony Crane Capital Corporation, the Guarantors and State Street Bank
and Trust Company.*
10.11 Purchase Agreement, dated as of July 16, 1998, by and among Anthony
Crane Rental, L.P., Anthony Crane Capital Corporation, the Guarantors
and the Initial Purchasers.*
10.12 Registration Rights Agreement, dated as of July 22, 1998, by and among
Anthony Crane Rental, L.P., Anthony Crane Capital Corporation, the
Guarantors, and the Initial Purchasers.*
10.13 Employment Agreement, dated as of July 22, 1998, by and between Anthony
Crane Rental, L.P. and Ray G. Anthony.*
10.14 Consulting and Noncompetition Agreement, dated as of July 22, 1998, by
and between Anthony Crane Rental, L.P. and Samuel R. Anthony.*
10.15 Executive Purchase Agreement, dated as of July 22, 1998, by and among
ACR Management, L.L.C., Anthony Crane Rental Holdings, L.P. and David
W. Mahokey.*
10.16 Executive Purchase Agreement, dated as of July 22, 1998, by and among
ACR Management, L.L.C., Anthony Crane Rental Holdings, L.P. and Arthur
J. Innamorato.*
10.17 Executive Purchase Agreement, dated as of July 22, 1998, by and among
ACR Management, L.L.C., Anthony Crane Rental Holdings, L.P. and Albert
C. Bove.*
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S>
10.18 Executive Purchase Agreement, dated as of July 22, 1998, by and among
ACR Management, L.L.C., Anthony Crane Rental Holdings, L.P. and William
B. Kania.*
10.19 Liability Agreement, dated as of July 22, 1998, by and between Anthony
Crane Rental, L.P. and Anthony Crane Capital Corporation.*
10.20 Liability Agreement, dated as of July 22, 1998, by and between Anthony
Crane Rental Holdings, L.P. and Anthony Crane Holdings Capital
Corporation.*
10.21 Agreement, dated as of August 1, 1996, between Hess Oil Virgin Islands
Corp. and Anthony Crane International, L.P.*
10.22 Sale and Lease Agreement, dated as of July 25, 1996, by and between
Anthony Crane Sales & Leasing, L.P. and Hess Oil Virgin Islands Corp.*
10.23 Master Rental Agreement for Bare Rental Equipment, dated as of August 1,
1996, by and between Anthony Crane Sales & Leasing, L.P. and Hess Oil
Virgin Islands Corp.*
12.1 Computation of Ratio of Earnings to Fixed Charges.*
21.1 Subsidiaries of Anthony Crane Rental, L.P.*
23.1 Consent of PricewaterhouseCoopers LLP*
23.2 Consent of Kirkland & Ellis (included in exhibits 5.1 and 8.1).**
24.1 Powers of Attorney (included in signature page).*
25.1 Statement of Eligibility of Trustee on Form T-1.**
27.1 Financial Data Schedule.*
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Tender Instructions.**
</TABLE>
- ---------------------
* Filed herewith
** To be filed by amendment
(B) FINANCIAL STATEMENT SCHEDULES
SCHEDULE II--VALUATION & QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
BALANCE AT
BEGINNING CHARGED BALANCE AT
CLASSIFICATION OF PERIOD TO EXPENSE DEDUCTIONS END OF PERIOD
-------------- ---------- ---------- ---------- -------------
(IN THOUSANDS) --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31,
1997
Allowance for Doubtful
Accounts................ $1,850 $ 428 $ (438) $1,840
YEAR ENDED DECEMBER 31,
1996
Allowance for Doubtful
Accounts................ $1,500 $1,071 $ (721) $1,850
YEAR ENDED DECEMBER 31,
1995
Allowance for Doubtful
Accounts................ $1,250 $1,293 $(1,043) $1,500
</TABLE>
All other schedules have been omitted because they are not applicable or not
required or the required information is included in the consolidated financial
statements or notes thereto.
(C) REPORT OF INDEPENDENT ACCOUNTANTS
In connection with our audits of the consolidated financial statements of
Anthony Crane Rental, L.P. and subsidiaries as of December 31, 1997 and 1996
and for each of the three years in the period ended December 31, 1997, which
financial statements are included in the Prospectus, we have also audited the
financial statement schedule listed in Item 21(b) herein.
In our opinion, this financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
/s/ COOPERS & LYBRAND L.L.P.
Pittsburgh, Pennsylvania
February 25, 1998
II-5
<PAGE>
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering; and
(4) If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements
required by Rule 3-19 of the chapter at the start of any delayed offering or
throughout a continuous offering. Financial statements and information
otherwise required by Section 10(a) (3) of the Act need not be furnished,
provided, that the registrant includes in the prospectus, by means of a post-
effective amendment, financial statements required pursuant to this paragraph
(a)(4) and other information necessary to ensure that all other information in
the prospectus is at least as current as the date of those financial
statements. Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed to
include financial statements and information required by Section 10(a)(3) of
the Act or Rule 3-19 of this chapter is such financial statements and
information are contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the Form
F-3.
(1) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use
of a prospectus which is part of this registration statement, by any person
or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain
the information called for by the applicable registration form with respect
to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the registration statement and will not
be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 20 or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
II-6
<PAGE>
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.
II-7
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF WEST MIFFLIN, STATE OF
PENNSYLVANIA, ON SEPTEMBER 30, 1998.
Anthony Crane Rental Holdings, L.P.
/s/ Ray G. Anthony
By: __________________________________
Name: Ray G. Anthony
Title: Chairman and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS ANY OF RAY G. ANTHONY OR DALE A. BUCKWALTER, HIS
TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL POWER OF SUBSTITUTION AND
RESUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL
CAPACITIES (INCLUDING HIS CAPACITY AS A DIRECTOR AND/OR OFFICER OF ANTHONY
CRANE RENTAL HOLDINGS, L.P.), TO SIGN ANY OR ALL AMENDMENTS (INCLUDING POST-
EFFECTIVE AMENDMENTS) TO THIS REGISTRATION STATEMENT AND ANY SUBSEQUENT
REGISTRATION STATEMENT FILED PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT
OF 1933, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS
IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING
UNTO SAID ATTORNEY-IN-FACT AND AGENT FULL POWER AND AUTHORITY TO DO AND PERFORM
EACH AND EVERY ACT AND THING REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT
THE PREMISES, AS FULLY TO ALL INTENTS AND PURPOSES AS HE MIGHT OR COULD DO IN
PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEY-IN-FACT AND
AGENT OR HIS SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY
VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT AND POWER OF ATTORNEY HAVE BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATION ON SEPTEMBER 30, 1998:
SIGNATURE CAPACITY
/s/ Ray G. Anthony Chairman and Chief Executive
- ------------------------------------ Officer (principal executive
RAY G. ANTHONY officer)
/s/ Dale A. Buckwalter Chief Financial Officer (principal
- ------------------------------------ financial and accounting officer)
DALE A. BUCKWALTER
/s/ David W. Mahokey Member of the Board and Chief
- ------------------------------------ Operating Officer
DAVID W. MAHOKEY
/s/ Paul Edgerley Member of the Board
- ------------------------------------
PAUL EDGERLEY
/s/ Robert C. Gay Member of the Board
- ------------------------------------
ROBERT C. GAY
/s/ Andrew B. Balson Member of the Board
- ------------------------------------
ANDREW B. BALSON
/s/ James E. Haas Member of the Board
- ------------------------------------
JAMES E. HAAS
/s/ William B. Kania Member of the Board
- ------------------------------------
WILLIAM B. KANIA
II-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF WEST MIFFLIN, STATE OF
PENNSYLVANIA, ON SEPTEMBER 30, 1998.
Anthony Crane Capital Holdings
Corporation
/s/ Ray G. Anthony
By: _________________________________
Name: Ray G. Anthony
Title: Chairman and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS ANY OF RAY G. ANTHONY OR DALE A. BUCKWALTER,
HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL POWER OF
SUBSTITUTION AND RESUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN
ANY AND ALL CAPACITIES (INCLUDING HIS CAPACITY AS A DIRECTOR AND/OR OFFICER OF
ANTHONY CRANE CAPITAL HOLDINGS CORPORATION), TO SIGN ANY OR ALL AMENDMENTS
(INCLUDING POST-EFFECTIVE AMENDMENTS) TO THIS REGISTRATION STATEMENT AND ANY
SUBSEQUENT REGISTRATION STATEMENT FILED PURSUANT TO RULE 462(B) UNDER THE
SECURITIES ACT OF 1933, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND
OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE
COMMISSION, GRANTING UNTO SAID ATTORNEY-IN-FACT AND AGENT FULL POWER AND
AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING REQUISITE AND
NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL INTENTS AND
PURPOSES AS HE MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING
ALL THAT SAID ATTORNEY-IN-FACT AND AGENT OR HIS SUBSTITUTE OR SUBSTITUTES, MAY
LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT AND POWER OF ATTORNEY HAVE BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATION ON SEPTEMBER 30, 1998:
SIGNATURE CAPACITY
/s/ Ray G. Anthony Chairman and Chief Executive Officer
- ------------------------------------- (principal executive officer)
RAY G. ANTHONY
/s/ Dale A. Buckwalter Chief Financial Officer (principal
- ------------------------------------- financial and accounting officer)
DALE A. BUCKWALTER
/s/ David W. Mahokey Member of the Board and Chief
- ------------------------------------- Operating Officer
DAVID W. MAHOKEY
/s/ Paul Edgerley Member of the Board
- -------------------------------------
PAUL EDGERLEY
/s/ Robert C. Gay Member of the Board
- -------------------------------------
ROBERT C. GAY
/s/ Andrew B. Balson Member of the Board
- -------------------------------------
ANDREW B. BALSON
/s/ James E. Haas Member of the Board
- -------------------------------------
JAMES E. HAAS
/s/ William B. Kania Member of the Board
- -------------------------------------
WILLIAM B. KANIA
II-9
<PAGE>
EXHIBITS INDEX
(A) EXHIBITS.
<TABLE>
<C> <S>
2.1 Recapitalization Agreement, dated as of June 1, 1998, by and among
Anthony Crane Rental, L.P., Bain/ACR, L.L.C., ACR Management, L.L.C.
and the current owners named therein.*
3.1 Certificate of limited partnership of Anthony Crane Rental Holdings,
L.P.*
3.2 Amended and Restated Agreement of Limited Partnership of Anthony Crane
Rental Holdings, L.P.*
3.3 Certificate of Incorporation of Anthony Crane Holdings Capital
Corporation.*
3.4 Bylaws of Anthony Crane Holdings Capital Corporation.*
4.1 Indenture, dated as of July 22, 1998, by and among Anthony Crane Rental
Holdings, L.P., Anthony Crane Holdings Capital Corporation and State
Street Bank and Trust Company.*
5.1 Opinion and Consent of Kirkland & Ellis.**
8.1 Opinion of Kirkland & Ellis as to federal income tax consequences.**
10.1 Purchase Agreement, dated as of July 16, 1998, by and among Anthony
Crane Rental Holdings, L.P., Anthony Crane Holdings Capital Corporation
and the Initial Purchasers.*
10.2 Registration Rights Agreement, dated as of July 22, 1998, by and among
Anthony Crane Rental Holdings, L.P., Anthony Crane Holdings Capital
Corporation and the Initial Purchasers.*
10.3 Revolving Credit Agreement, dated as of July 22, 1998, among Anthony
Crane Rental, L.P., Anthony Crane Rental Holdings, L.P., the several
banks or other financial institutions or entities from time to time
parties to this Agreement, Goldman Sachs Credit Partners L.P., Fleet
National Bank and DLJ Capital Funding, Inc.*
10.4 Term Loan Credit Agreement, dated as of July 22, 1998, among Anthony
Crane Rental, L.P., Anthony Crane Rental Holdings, L.P., the several
banks or other financial institutions or entities from time to time
parties to this Agreement, Goldman Sachs Credit Partners, L.P., Fleet
National Bank and DLJ Capital Funding, Inc.*
10.5 Securityholders Agreement, dated as of July 22, 1998, by and among ACR
Management, L.L.C., Anthony Crane Rental Holdings, L.P. and the
Securityholders.*
10.6 Registration Rights Agreement, made as of July 22, 1998, by and among
Anthony Crane Rental Holdings, L.P., ACR Management, L.L.C., Bain/ACR,
L.L.C. and the Current Owners.*
10.7 Advisory Agreement, dated as of July 22, 1998, by and among Bain
Capital, Inc., Anthony Crane Rental Holdings, L.P. and Anthony Crane
Rental, L.P.*
10.8 Escrow Agreement, dated as of July 22, 1998, by and among Anthony Crane
Rental, L.P., Anthony Iron & Metal Company, David W. Mahokey and Brown
Brothers Harriman & Co.*
10.9 Amended and Restated Agreement of Limited Partnership of Anthony Crane
Rental, L.P.*
10.10 Indenture, dated as of July 22, 1998, among Anthony Crane Rental, L.P.,
Anthony Crane Capital Corporation, the Guarantors and State Street Bank
and Trust Company.*
10.11 Purchase Agreement, dated as of July 16, 1998, by and among Anthony
Crane Rental, L.P., Anthony Crane Capital Corporation, the Guarantors
and the Initial Purchasers.*
10.12 Registration Rights Agreement, dated as of July 22, 1998, by and among
Anthony Crane Rental, L.P., Anthony Crane Capital Corporation, the
Guarantors, and the Initial Purchasers.*
10.13 Employment Agreement, dated as of July 22, 1998, by and between Anthony
Crane Rental, L.P. and Ray G. Anthony.*
10.14 Consulting and Noncompetition Agreement, dated as of July 22, 1998, by
and between Anthony Crane Rental, L.P. and Samuel R. Anthony.*
10.15 Executive Purchase Agreement, dated as of July 22, 1998, by and among
ACR Management, L.L.C., Anthony Crane Rental Holdings, L.P. and David
W. Mahokey.*
</TABLE>
<PAGE>
<TABLE>
<C> <S>
10.16 Executive Purchase Agreement, dated as of July 22, 1998, by and among
ACR Management, L.L.C., Anthony Crane Rental Holdings, L.P. and Arthur
J. Innamorato.*
10.17 Executive Purchase Agreement, dated as of July 22, 1998, by and among
ACR Management, L.L.C., Anthony Crane Rental Holdings, L.P. and Albert
C. Bove.*
10.18 Executive Purchase Agreement, dated as of July 22, 1998, by and among
ACR Management, L.L.C., Anthony Crane Rental Holdings, L.P. and William
B. Kania.*
10.19 Liability Agreement, dated as of July 22, 1998, by and between Anthony
Crane Rental, L.P. and Anthony Crane Capital Corporation.*
10.20 Liability Agreement, dated as of July 22, 1998, by and between Anthony
Crane Rental Holdings, L.P. and Anthony Crane Holdings Capital
Corporation.*
10.21 Agreement, dated as of August 1, 1996, between Hess Oil Virgin Islands
Corp. and Anthony Crane International, L.P.*
10.22 Sale and Lease Agreement, dated as of July 25, 1996, by and between
Anthony Crane Sales & Leasing, L.P. and Hess Oil Virgin Islands Corp.*
10.23 Master Rental Agreement for Bane Rental Equipment, dated as of August 1,
1996, by and between Anthony Crane Sales & Leasing, L.P. and Hess Oil
Virgin Islands Corp.*
12.1 Computation of Ratio of Earnings to Fixed Charges.*
21.1 Subsidiaries of Anthony Crane Rental, L.P.*
23.1 Consent of PricewaterhouseCoopers LLP*
23.2 Consent of Kirkland & Ellis (included in exhibits 5.1 and 8.1).**
24.1 Powers of Attorney (included in signature page).*
25.1 Statement of Eligibility of Trustee on Form T-1.**
27.1 Financial Data Schedule.*
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Tender Instructions.**
</TABLE>
- ---------------------
* Filed herewith
** To be filed by amendment
<PAGE>
EXHIBIT 2.1
AMENDED AND RESTATED
RECAPITALIZATION AGREEMENT
DATED AS OF JULY 22, 1998
BY AND AMONG
ANTHONY CRANE RENTAL, L.P.,
ANTHONY CRANE RENTAL HOLDINGS, L.P.,
THE PURCHASERS LISTED ON
THE SCHEDULE OF PURCHASERS
AND
THE CURRENT OWNERS LISTED ON
THE SCHEDULE OF CURRENT OWNERS
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Section 1. Recapitalization............................................................................. 1
1.01 Transactions................................................................................. 1
1.02 The Closing.................................................................................. 4
1.03 Distribution Amount.......................................................................... 5
1.04 Distribution Amount Adjustment............................................................... 7
Section 2. Conditions of Each Purchaser's Obligation at the Closing..................................... 8
2.01 Representations and Warranties; Covenants.................................................... 8
2.02 Amendment of Limited Partnership Agreements.................................................. 8
2.03 Escrow Agreement............................................................................. 8
2.04 Securityholders Agreement.................................................................... 8
2.05 Registration Agreement....................................................................... 8
2.06 Sale of Common Units to Each Purchaser....................................................... 9
2.07 Distribution to the Current Owners........................................................... 9
2.08 Advisory Agreement........................................................................... 9
2.09 Employment Agreement......................................................................... 9
2.10 Consulting Agreement......................................................................... 9
2.11 Financing Arrangements....................................................................... 9
2.12 Opinion of the Company's and the Current Owner's Counsel..................................... 9
2.13 Material Adverse Change...................................................................... 9
2.14 Proceedings.................................................................................. 9
2.15 Compliance with Applicable Laws.............................................................. 10
2.16 Filings...................................................................................... 10
2.17 Consents and Approvals....................................................................... 10
2.18 Payoff Letters and Releases.................................................................. 10
2.19 Excluded Assets.............................................................................. 10
2.20 Executive Purchase Agreements................................................................ 10
2.21 Termination of "Sweep" Arrangement........................................................... 10
2.22 Repayment of Related Party Loans............................................................. 11
2.23 Acquisition of Lindsay Crane................................................................. 11
2.25 Waiver....................................................................................... 12
Section 3. Conditions of the Company's and the Current Owner's Obligations at the Closing............... 12
3.01 Representations and Warranties; Covenants.................................................... 12
3.02 Amendment of Limited Partnership Agreement................................................... 12
3.03 Escrow Agreement............................................................................. 12
3.04 Securityholders Agreement.................................................................... 12
3.05 Registration Agreement....................................................................... 12
3.06 Employment Agreement......................................................................... 12
3.07 Consulting Agreement......................................................................... 12
3.08 Sale of Common Units to Each Purchaser....................................................... 12
3.09 Distribution to Current Owners............................................................... 12
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
3.10 Proceedings.................................................................................. 13
3.11 Compliance with Applicable Laws.............................................................. 13
3.12 Consents and Approvals....................................................................... 13
3.13 Financing Arrangements....................................................................... 13
3.14 Filings...................................................................................... 13
3.15 Waiver....................................................................................... 13
Section 4. Pre-Closing Covenants and Agreements......................................................... 13
4.01 General...................................................................................... 14
4.02 Notices and Consents......................................................................... 14
4.03 Affirmative Covenants of the Current Owners and the Company.................................. 14
4.04 Negative Covenants of the Current Owners and the Company..................................... 15
4.05 Full Access.................................................................................. 16
4.06 Notice of Material Developments.............................................................. 16
4.07 Exclusivity.................................................................................. 16
4.08 Actions with Respect to Partnership Interests................................................ 17
4.09 Real Estate Matters.......................................................................... 17
Section 5. Representations and Warranties with Respect to the Company................................... 19
5.01 Organization................................................................................. 19
5.02 Authorization................................................................................ 19
5.03 Capitalization and Related Matters........................................................... 19
5.04 Noncontravention............................................................................. 20
5.05 Brokerage.................................................................................... 20
5.06 Subsidiaries and Investments................................................................. 20
5.07 Financial Statements......................................................................... 21
5.08 Undisclosed Liabilities...................................................................... 21
5.09 Legal Compliance............................................................................. 21
5.10 Tangible Assets.............................................................................. 22
5.11 Title to Personal Property................................................................... 22
5.12 Title to Real Property....................................................................... 22
5.13 Litigation................................................................................... 23
5.14 Contracts.................................................................................... 23
5.15 Tax Matters.................................................................................. 26
5.16 Intellectual Property........................................................................ 27
5.17 Insurance.................................................................................... 28
5.18 Labor and Employment Matters................................................................. 28
5.19 Employee Benefits............................................................................ 29
5.20 No Material Adverse Change................................................................... 30
5.21 Events Subsequent to Most Recent Fiscal Year End............................................. 30
5.22 Environment, Health and Safety Matters....................................................... 32
5.23 Affiliated Transactions...................................................................... 33
5.24 Names and Locations.......................................................................... 33
5.25 Suppliers and Customers...................................................................... 34
5.27 Disclosure................................................................................... 34
5.28 Closing Date................................................................................. 34
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
5.29 Disclaimer of Other Representations and Warranties........................................... 34
Section 6. Representations and Warranties of the Current Owners......................................... 35
6.01 Power and Authority.......................................................................... 35
6.02 Execution; No Breach......................................................................... 35
6.03 Title to Partnership Interest................................................................ 35
6.04 Brokerage.................................................................................... 35
6.05 Company Transactions......................................................................... 35
6.06 Closing Date................................................................................. 35
6.07 Disclaimer of Other Representations and Warranties........................................... 36
Section 7. Representations and Warranties of the Purchasers............................................. 36
7.01 Organization, Power and Authority............................................................ 36
7.02 Authorization; No Breach..................................................................... 36
7.03 Brokerage.................................................................................... 36
7.04 Closing Date................................................................................. 36
7.05 Disclaimer of Other Representations and Warranties........................................... 37
Section 8. Additional Agreements........................................................................ 37
8.01 Indemnification.............................................................................. 37
8.02 Dispute Settlement........................................................................... 42
8.03 Noncompete and Nonsolicitation............................................................... 44
8.04 Powers of Attorney........................................................................... 45
8.05 Replacement of the Current Owner Representative.............................................. 46
8.06 Actions of the Current Owner Representative; Liability of the Current Owner Representative... 47
8.07 Transfer of Restricted Securities............................................................ 47
8.08 Terminated Employees......................................................................... 48
8.09 Collection of Employee Loans................................................................. 48
Section 9. Definitions.................................................................................. 48
Section 10. Termination.................................................................................. 52
Section 11. Miscellaneous................................................................................ 53
11.01 Expenses..................................................................................... 53
11.02 Press Release and Announcements.............................................................. 54
11.03 Further Assurances........................................................................... 54
11.04 Confidentiality.............................................................................. 54
11.05 Entire Agreement............................................................................. 55
11.06 Counterparts................................................................................. 55
11.07 Headings..................................................................................... 55
11.08 Notices...................................................................................... 55
11.09 Governing Law................................................................................ 56
11.10 Amendments and Waivers....................................................................... 56
11.11 Construction................................................................................. 56
11.12 Remedies..................................................................................... 57
</TABLE>
-iii-
<PAGE>
SCHEDULES AND EXHIBITS
----------------------
Indebtedness Schedule
Exhibits:
- --------
Exhibit A - Escrow Agreement
Exhibit B-1 - Amended and Restated Limited Partnership Agreement of Holdings
Exhibit B-2 - Amended and Restated Limited Partnership Agreement of the
Company, ACI and ACSL
Exhibit C - Securityholders Agreement
Exhibit D - Registration Agreement
Exhibit E - Advisory Agreement
Exhibit F - Employment Agreement (RA)
Exhibit G - Consulting Agreement (SA)
Exhibit H - Opinion of the Company's and the Current Owners' Counsel
Exhibit I - List of Excluded Assets
Exhibit J - Executive Purchase Agreement
Exhibit K - Equity Commitment Letter
Disclosure Schedules:
- --------------------
Organization Schedule
Capitalization Schedule
Noncontravention Schedule
Financial Statements Schedule
Undisclosed Liability Schedule
Legal Compliance and Permits Schedule
Assets Schedule
Permitted Liens Schedule
Real Property Schedule
Litigation Schedule
Contracts Schedule
Taxes Schedule
Intellectual Property Schedule
Insurance Schedule
Labor Schedule
Employee Benefits Schedule
Subsequent Events Schedule
Environmental and Safety Permits Schedule
Affiliated Transactions Schedule
Names and Locations Schedule
Suppliers and Customers Schedule
Indemnification Schedule
-iv-
<PAGE>
AMENDED AND RESTATED
RECAPITALIZATION AGREEMENT
--------------------------
THIS AMENDED AND RESTATED RECAPITALIZATION AGREEMENT (this
"Agreement") is made as of July 22, 1998, by and among Anthony Crane Rental,
---------
L.P., a Pennsylvania limited partnership (and together with its Subsidiaries,
the "Company"), Anthony Crane Rental Holdings, L.P., a Pennsylvania limited
-------
partnership ("Holdings"), the Persons listed on the Schedule of Purchasers
-------- ----------------------
attached hereto (collectively referred to herein as the "Purchasers" and
----------
individually as a "Purchaser"), the Persons listed on the Schedule of Current
--------- -------------------
Owners attached hereto (collectively referred to herein as the "Current Owners"
- ------ --------------
and individually as a "Current Owner") and the other persons identified on the
-------------
signature page hereto. The Company, the Purchasers and the Current Owners are
collectively referred to herein as the "Parties." Except as otherwise indicated
-------
herein, capitalized terms used herein are defined in Section 9.
WHEREAS, the Parties hereto (other than Holdings) are parties to that
certain Recapitalization Agreement, dated June 1, 1998 (the "Original
--------
Recapitalization Agreement");
- --------------------------
WHEREAS, the Parties hereto desire to amend and restate the Original
Recapitalization Agreement, in its entirety;
WHEREAS, the Company desires to reconstitute its capital structure
through the incurrence of new debt obligations, the repayment of certain of its
outstanding debt obligations, the restructuring of certain of its outstanding
partnership interests and the distribution of cash to Anthony Iron and Metal
Company, a Pennsylvania general partnership ("AIM"), on the terms and subject to
---
the conditions set forth herein;
WHEREAS, AIM desires to receive a distribution with respect to certain
of its partnership interests in the Company and restructure its remaining
partnership interests in the Company into newly-issued partnership units of
Holdings on the terms and subject to the conditions set forth herein; and
WHEREAS, the Purchasers desire to acquire newly-issued partnership
units of Holdings and ACR Management, L.L.C., a Delaware limited liability
company ("ACR Mgmt.") on the terms and subject to the conditions set forth
---------
herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements
and understandings herein contained, the Parties agree that the Original
Recapitalization Agreement is hereby amended and restated as follows:
Section 1. Recapitalization.
----------------
1.01 Transactions. On the basis of the representations, warranties,
------------
covenants and agreements and subject to the satisfaction or waiver of the
conditions set forth herein, the Company agrees to and will consummate, and the
Current Owners agree to and will cause the Company to consummate, and the
Purchasers agree as to matters applicable to them to consummate, at, prior to,
-1-
<PAGE>
or contemporaneously with, the Closing, the following transactions
(collectively, the "Transactions"):
------------
(a) Anthony Crane Rental, Inc., a Pennsylvania corporation ("ACR
---
Pennsylvania"), a partner in the Company, will contribute all of its interest in
- ------------
the Company, except for a 1% general partner interest therein, to Anthony Iron
and Metal Company, a Pennsylvania general partnership ("AIM"), with such
---
interest to be held by AIM as a limited partner interest in the Company.
(b) ACR Pennsylvania will also contribute all of its interest in
each of Holdings and Anthony Crane International, L.P., a Pennsylvania limited
partnership ("ACI"), except for a 1% general partner interest in each of
---
Holdings and ACI, to the Company and such interests will be held by the Company
as limited partner interests.
(c) Following these steps, the ownership interests in each of
Holdings and ACI will be as follows:
ACR Pennsylvania (General Partner) 1%
Company (Limited Partner) 99%
Total 100%
(d) Anthony Crane Rental of Texas, Inc., a Texas corporation ("ACR
---
Texas"), Anthony Crane Rental of Georgia, Inc., a Georgia corporation ("ACR
- ----- ---
Georgia"), and ACR Acquisitions, Inc., a Florida corporation ("ACR Florida"),
- ------- -----------
will contribute all of their interests in the Company to AIM in exchange for
general partnership interests in AIM.
(e) Subject to the provisions set forth below, AIM will continue as
a general partnership with ACR Pennsylvania, ACR Texas, ACR Georgia, ACR
Florida, Ray Anthony ("RA"), Samuel R. Anthony ("SA") and David W. Mahokey
-- --
("DM") as the general partners.
--
(f) Following these steps, the ownership interests in the Company
will be as follows:
ACR Pennsylvania (General Partner) 1%
AIM (Limited Partner) 99%
Total 100%
(g) Holdings will transfer all of its assets to a newly formed
limited partnership named Anthony Crane Sales & Leasing, L.P., a Pennsylvania
limited partnership ("New ACSL") with ACR Pennsylvania as its 1% general partner
--------
and the Company as its 99% limited partner. For accounting purposes, the
transfer will be treated as a distribution to the Company and ACR Pennsylvania
and a contribution by the Company and ACR Pennsylvania to New ACSL.
-2-
<PAGE>
(h) The Company will transfer its 99% limited partner interest in
Holdings to AIM.
(i) Holdings will create a wholly-owned corporate subsidiary to be a
co-issuer of Holdings' discount debentures ("Co-Issuer 1"), named Anthony Crane
-----------
Holdings Capital Corporation, a Delaware corporation.
(j) The Company will create a wholly-owned corporate subsidiary to
be a co-issuer of the Company's senior notes ("Co-Issuer 2"), named Anthony
-----------
Crane Capital Corporation, a Delaware corporation.
(k) The Company will issue senior notes in an aggregate principal
amount of $155 million to certain institutional investors (the "Senior Note
-----------
Offering").
- --------
(l) The Company will obtain a $325 million senior credit facility,
consisting of a $275 million revolving note and a $50 million term note (the
"Senior Facility") and incur senior indebtedness in amounts satisfactory to
---------------
consummate the recapitalization.
(m) The Company will fully repay and retire all of its Indebtedness
(along with any related prepayment penalties or premiums), as more specifically
set forth on the Indebtedness Schedule, from the proceeds of the Senior Note
---------------------
Offering and the Senior Facility.
(n) The Company will make a cash distribution to AIM from the
remaining proceeds from the Senior Facility and the Senior Note Offering in an
amount equal to the Estimated Distribution Amount.
(o) AIM will transfer all of its limited partner interest in the
Company to Holdings for Class A Preferred Units with a liquidation value of
$22,500,000 and Class L Common Units and Class A Common Units of Holdings,
representing approximately 99% of the Common Units of Holdings and after taking
into account the paragraphs below in this Section 1.01, 17.82% of the Common
Units of Holdings.
(p) Bain/ACR will invest in the aggregate $31,000,000: (i) in the
form of Class L Common Units and Class A Common Units in Holdings, representing
74.85% of the Common Units therein after taking into account the paragraphs
below in this Section 1.01 and (ii) member interests in ACR Mgmt., representing
a 75.61% interest therein.
(q) AIM, Albert Bove, Arthur Innamorato and William B. Kania will
invest in the aggregate $1,640,000, $410,000, $410,000 and $160,000,
respectively, (i) in the form of Class L Common Units and Class A Common Units
in Holdings, representing 3.96%, .99%, .99% and 0.38%, respectively, of the
Common Units therein after taking into account the paragraphs below in this
Section 1.01 and (ii) member interests in ACR Mgmt., representing a 4%, 1%, 1%,
and 0.39% interest therein, respectively. Immediately after this investment,
AIM will distribute the Common Units and member interests in ACR Mgmt. purchased
by it hereunder to DM and DM will hold such Common Units and member interests in
his individual capacity. The aggregate amount paid to
-3-
<PAGE>
Holdings and ACR Mgmt. pursuant to paragraphs (p) and (q) is referred to as the
"Purchase Price."
--------------
(r) Holdings will issue discount debentures in an aggregate
principal amount of $25 million to certain institutional investors (the
"Debenture Offering").
------------------
(s) Holdings will contribute sufficient proceeds from the Purchase
Price and the Debenture Offering to the Company and the Company will use such
proceeds to paydown the amounts owed on the Senior Facility.
(t) ACR Mgmt. will purchase from Holdings .4227% of the Class L
Common Units and Class A Common Units in Holdings, with such Common Units to be
held as a general partner interest in Holdings for an aggregate purchase price
of $169,643.
(u) ACR Mgmt. will purchase from New ACSL, ACI and the Company a 1%
interest in each such partnership, with such interests to be held as general
partner interests in each such partnership for a purchase price of $100, $100
and $884,800, respectively.
(v) ACR Pennsylvania will contribute its 1% general partner interest
in Holdings, New ACSL, ACI and the Company to AIM which will be held as limited
partner interests in such partnerships.
(w) AIM will contribute its 1% interest in New ACSL, ACI and the
Company to Holdings.
(x) Holdings will contribute its 1% interest in New ACSL and ACI to
the Company.
(y) AIM will contribute an .5773% interest in Holdings to ACR Mgmt.
in exchange for membership interests representing in the aggregate 18% of ACR
Mgmt.
(z) Holdings will contribute any remaining proceeds from the equity
offerings set forth in paragraphs (p) and (q) to the Company.
1.02 The Closing. The closing of the Transactions (the "Closing")
----------- -------
shall take place at a date and place as may be mutually agreeable to each of the
Parties (the "Closing Date"). At the Closing:
------------
(a) The Company shall issue its senior notes with an aggregate
principal amount of $155 million and consummate the Senior Note Offering.
(b) The Company shall incur indebtedness under its Senior Facility
in amounts satisfactory to consummate the transactions contemplated hereby and
to fund its ongoing working capital needs and consummate the Senior Facility.
(c) The Company shall deposit, from the proceeds of the Senior
Facility and/or the Senior Note Offering, $4,000,000 (the "Escrow Amount") in an
-------------
escrow account established
-4-
<PAGE>
pursuant to the terms and conditions of an escrow agreement in the form of
Exhibit A attached hereto (the "Escrow Agreement"). The Escrow Amount will be
- --------- ----------------
available to satisfy any amounts owed to the Company as a result of the
Distribution Amount Adjustment in Section 1.04 or as a result of indemnification
pursuant to Section 8 hereof.
(d) The Company shall distribute to AIM, from the proceeds of the
Senior Facility and the Senior Note Offering, by wire transfer of immediately
available funds to the account designated by AIM, an amount equal to the
Estimated Distribution Amount less the Escrow Amount.
----
(e) Bain/ACR, L.L.C. will pay the amounts described in Section
1.01(p) by wire transfer of immediately available funds to the accounts
designated by Holdings and ACR Mgmt.
(f) AIM, Albert Bove, Arthur Innamorato and William Kania will pay
the amounts described in Section 1.01(q) by wire transfer of immediately
available funds to the accounts designated by Holdings and ACR Mgmt. AIM will
distribute the Common Units purchased by it in Holdings and the member interests
in ACR Mgmt. to DM.
(g) ACR Mgmt. will pay the amount described in Sections 1.01(t) and
(u) by wire transfer of immediately available funds to the accounts designated
by Holdings, the Company, New ACSL and ACI.
(h) Holdings will issue its discount debentures in an aggregate
principal amount of $25 million and consummate the Debenture Offering.
(i) Holdings will contribute the amount set forth in Section 1.01(s)
and (z) by wire transfer of immediately available funds to the account
designated by the Company.
1.03 Distribution Amount.
-------------------
(a) The "Distribution Amount" shall be equal to the sum of (i)
-------------------
$160,000,000 in cash, minus (ii) the Equity Rollover Amount, minus (iii) the
----- -----
aggregate amount, if any, by which the aggregate prepayment penalties and/or
premiums payable by the Company or its Subsidiaries to its existing lenders with
respect to the repayment of the Company's Indebtedness set forth on the
Indebtedness Schedule are in excess of $13,600,000, minus (iv) the amount, if
- --------------------- -----
any, by which the Consolidated Net Worth as of the close of business on the day
immediately preceding the Closing Date is less than $90,000,000 (the "Target Net
----------
Worth"), plus (v) the amount, if any, by which the Consolidated Net Worth as of
- ----- ----
the close of business on the day immediately preceding the Closing Date is
greater than the Target Net Worth.
(i) "Consolidated Net Worth" with respect to any day means the
----------------------
excess of the Company's consolidated assets over the Company's consolidated
liabilities as of such day as determined in accordance with GAAP,
consistently applied with the Company's financial statements, dated
December 31, 1997 (except that (A) depreciation methods, useful lives of
------
and salvage values of depreciable assets shall be determined utilizing the
same methods, lives and salvage values as in effect prior to the changes
instituted in 1997, (B) any gains on the sale of the Company's or its
Subsidiaries' assets (including, but not limited to,
-5-
<PAGE>
the Carson, California land sale and any cranes) from September 30, 1997
through and including the day immediately preceding the Closing Date will
be excluded, (C) any income recorded from the reversal of the workers
compensation over-accrual and the reversal of the over-accrual of the
Company's bad debt reserve subsequent to September 30, 1997 will be
excluded, (D) the lump sum amount paid subsequent to September 30, 1997
with respect to the underfunding of the Union of Operating Engineers
Multiemployer Pension Plan will be excluded and (E) any loans by the
Company to its officers, employees or consultants will be excluded. The
estimated accruals for liabilities and the estimated reserves against
assets used in determining Consolidated Net Worth shall be consistent with
the manner in which such accruals and reserves were calculated on the
Company's audited consolidated December 31, 1997 balance sheet utilizing
the facts and circumstances in effect at the time the Actual Distribution
Amount is determined pursuant to Section 1.04. In determining Consolidated
Net Worth, all accounting entries shall be taken into account regardless of
their amount (including, but not limited to, payroll accruals) and all
known omissions shall be corrected. The acquisition of Lindsay Crane and
the accounting entities related thereto shall not affect Consolidated Net
Worth.
(ii) "Equity Rollover Amount" means the sum of the value of the
----------------------
Class A Common Units and Class L Common Units and the Class A Preferred
Units with a liquidation value of $22,500,000 issued to AIM as part of the
restructuring of certain of the outstanding partnership interests in the
Company, based on the cost of the Class A Common Units and the Class L
Common Units to the Purchasers and AIM's percentage ownership of the total
outstanding Class A Common Units and Class L Common Units and the
liquidation value of the Class A Preferred Units.
(b) At least five (5) business days prior to the Closing, the
Company in good faith shall prepare and deliver to the Purchaser Representative
an estimated combined unaudited consolidated balance sheet of the Company, dated
as of the day immediately preceding the Closing Date, in accordance with GAAP,
an estimate of the Distribution Amount as of the close of business on the day
immediately preceding the Closing Date (the "Estimated Distribution Amount"),
-----------------------------
and an estimate of the Consolidated Net Worth based on the Company's books and
records and other information then available. The Purchaser Representative may
object to the Company's estimate of Consolidated Net Worth on or prior to the
date that is two days prior to the Closing Date, in which case the Company and
the Purchaser Representative shall negotiate in good faith to determine the
estimated Consolidated Net Worth as of the day immediately preceding the Closing
Date. In the event that such Parties cannot agree as to the estimated
Consolidated Net Worth on or before 11:59 p.m. on the day immediately prior to
the Closing Date, then the estimated Consolidated Net Worth, solely for purposes
of this Section 1.03, shall be the Consolidated Net Worth as of the month end
immediately prior to the Closing Date.
1.04 Distribution Amount Adjustment.
------------------------------
(a) As promptly as practicable, but in no event later than ninety
(90) days after the Closing Date, Bain, as representative of the Purchasers (the
Purchaser Representative"), will deliver to William B. Kania, as representative
- -------------------------
of the Current Owners (the "Current Owner Representative"), a consolidated
----------------------------
balance sheet of the Company dated as of the day immediately
-6-
<PAGE>
preceding the Closing Date (the "Closing Balance Sheet") which will reflect the
--------------------
Consolidated Net Worth and the Purchaser Representative's determination of the
Distribution Amount (the "Actual Distribution Amount") as of such date. If the
--------------------------
Current Owner Representative disagrees with the Purchaser Representative's
determination of the Actual Distribution Amount, the Current Owner
Representative shall notify the Purchaser Representative in writing of such
disagreement (such notice setting forth the basis for such disagreement in
reasonable detail) within thirty (30) days after the Purchaser Representative's
delivery of its calculation of the Actual Distribution Amount to the Current
Owner Representative. The Current Owner Representative and the Purchaser
Representative thereafter shall negotiate in good faith to resolve any such
disagreements. If there is an amount as to which the Current Owner
Representative and the Purchaser Representative are able to agree, such amount
shall be paid to the appropriate party pursuant to Section 1.04 (c) below. If
the Current Owner Representative and the Purchaser Representative are unable to
resolve any disagreements about remaining amounts within thirty (30) days after
the Current Owner's delivery of its notice of disagreement to the Purchaser
Representative, the Current Owner Representative and the Purchaser
Representative shall submit the dispute to a "Big Five" public accounting firm
--------
(or any of their respective successors) (the "Auditor") for resolution; provided
------- --------
that if the Current Owner Representative and the Purchaser Representative are
unable to agree upon an Auditor, the Auditor shall be a "Big Five" public
--------
accounting firm (or any of their respective successors) selected by lot (after
the Current Owner Representative and the Purchaser Representative each exclude
one such accounting firm). The selection of the Auditor shall be conclusive,
final, binding and non-appealable by the Parties.
(b) The Purchaser Representative and the Current Owner
Representative shall use their best efforts to cause the Auditor to resolve all
disagreements over the Actual Distribution Amount as soon as practicable, but in
any event within sixty (60) days after submission of the dispute to the Auditor.
The resolution of such disagreements and the determination of the Actual
Distribution Amount by the Auditor shall be final and binding on the Parties.
The Company, on one hand, and the Current Owners, on the other hand, will each
bear one-half of the costs and expenses of the Auditor.
(c) Within five (5) days after the Actual Distribution Amount is
finally determined pursuant to this Section 1.04:
(i) if the Actual Distribution Amount is less than the
Estimated Distribution Amount, the Current Owner Representative, on behalf
of the Current Owners, shall pay to the Company the amount of such
shortfall; and
(ii) if the Actual Distribution Amount is greater than the
Estimated Distribution Amount, the Company shall pay to the Current Owner
Representative, on behalf of the Current Owners, the amount of such excess.
All amounts payable pursuant to this Section 1.04 shall include simple interest
at the rate of 8% per annum, calculated on the basis of a 365-day year, from the
Closing Date through the date of payment, and shall be payable by a cashier's or
certified check, or by wire transfer of immediately available funds to the
accounts designated by the payee; provided that in the case of any amount owed
--------
by the Current Owners, such amount shall be distributed to the Purchaser
Representative, to
-7-
<PAGE>
the extent such amount is available, first out of the Escrow Amount pursuant to
the terms of the Escrow Agreement and thereafter as provided above.
Section 2. Conditions of Each Purchaser's Obligation at the Closing.
--------------------------------------------------------
The obligation of each Purchaser to purchase and pay for the Common Units at the
Closing is subject to the satisfaction as of the Closing of the following
conditions:
2.01 Representations and Warranties; Covenants. The representations
-----------------------------------------
and warranties contained in Sections 5 and 6 hereof shall be true and correct in
all material respects at and as of the Closing as though then made (without
giving effect to any disclosures made by the Company or the Current Owners after
the date hereof and except to the extent of changes caused by the transactions
expressly contemplated herein), and the Company and the Current Owners shall
have performed in all material respects all of the covenants required to be
performed by them hereunder prior to the Closing.
2.02 Amendment of Limited Partnership Agreements. Holdings' Limited
-------------------------------------------
Partnership Agreement shall have been amended and restated in the form of
Exhibit B-1 attached hereto (as so amended and restated, the "Amended and
- ----------- -----------
Restated Limited Partnership Agreement"), shall be in full force and effect
- --------------------------------------
under the laws of the Commonwealth of Pennsylvania as of the Closing as so
amended and restated and shall not have been further amended or modified. In
addition, the limited partnership agreements of the Company, ACI and New ACSL
shall have been amended and restated in the form of Exhibit B-2 (collectively
with the Amended and Restated Limited Partnership Agreement, the "Amended and
-----------
Restated Limited Partnership Agreements").
- ---------------------------------------
2.03 Escrow Agreement. The Company and the Current Owners shall have
----------------
entered into the Escrow Agreement, and the Escrow Agreement shall be in full
force and effect as of the Closing.
2.04 Securityholders Agreement. Holdings and Holdings' partners
-------------------------
shall have entered into a securityholders agreement in the form of Exhibit C
---------
attached hereto (the "Securityholders Agreement"), and the Securityholders
-------------------------
Agreement shall be in full force and effect as of the Closing.
2.05 Registration Agreement. Holdings and Holdings' partners shall
----------------------
have entered into a registration agreement in the form of Exhibit D attached
---------
hereto (the "Registration Agreement"), and the Registration Agreement shall be
----------------------
in full force and effect as of the Closing.
2.06 Sale of Common Units to Each Purchaser. Holdings shall have
--------------------------------------
simultaneously sold to each Purchaser the Common Units to be purchased by such
Purchaser hereunder at the Closing and shall have received payment therefor in
full.
2.07 Distribution to the Current Owners. The Company shall have
----------------------------------
distributed to the Current Owners the Estimated Distribution Amount.
-8-
<PAGE>
2.08 Advisory Agreement. The Company shall have entered into an
------------------
Advisory Agreement with Bain in the form of Exhibit E attached hereto (the
---------
"Advisory Agreement"), and the Advisory Agreement shall be in full force and
------------------
effect as of the Closing.
2.09 Employment Agreement. The Company and RA shall have entered
--------------------
into an Employment Agreement providing for a term of five years, a base salary
of $400,000 per annum, a bonus of up to $200,000 per annum in the form of
Exhibit F attached hereto (the "Employment Agreement"), and the Employment
- --------- --------------------
Agreement shall be in full force and effect as of the Closing and shall not have
been amended or modified.
2.10 Consulting Agreement. The Company and SA shall have entered
--------------------
into a Consulting Agreement providing for a term of five years, consulting
payments of $255,000 per annum in the form of Exhibit G attached hereto (the
---------
"Consulting Agreement") and the Consulting Agreement shall be in full force and
--------------------
effect as of the Closing and shall not have been amended or modified.
2.11 Financing Arrangements. The Company shall have consummated the
----------------------
Senior Facility and the Senior Note Offering pursuant to the terms and
conditions of the Commitment Letters and other terms and conditions satisfactory
to the Purchaser Representative.
2.12 Opinion of the Company's and the Current Owner's Counsel. Each
--------------------------------------------------------
Purchaser shall have received from Williams Coulson, counsel for the Company and
the Current Owners, an opinion with respect to the matters set forth in Exhibit
-------
H attached hereto, which shall be addressed to the Purchasers and to the lenders
- -
providing the financing for the transactions contemplated hereby, dated the date
of the Closing, and in form and substance reasonably satisfactory to the
Purchaser Representative.
2.13 Material Adverse Change. Since the date of the Latest Balance
-----------------------
Sheet, no material adverse change shall have taken place with respect to the
business, assets, liabilities, financial condition, operating results, labor or
customer or supplier relations of the Company and its Subsidiaries, taken as a
whole, except as expressly contemplated herein.
2.14 Proceedings. All corporate and other proceedings taken or
-----------
required to be taken by the Company in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto shall be satisfactory in form and substance to the
Purchaser Representative and its special counsel.
2.15 Compliance with Applicable Laws.
-------------------------------
(a) No action or proceeding before any court or governmental body
will be pending or threatened which, in the judgment of the Purchaser
Representative, makes it inadvisable or undesirable to consummate the
transactions contemplated by this Agreement by reason of the probability that
the action or proceeding will result in a judgment, decree or order that would
prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, declare unlawful the transactions contemplated hereby or
cause such transactions to be rescinded.
-9-
<PAGE>
(b) The purchase or receipt of the Common Units by each Purchaser
hereunder shall not be prohibited by any applicable law or governmental rule or
regulation and shall not subject such Purchaser to any penalty, liability or, in
the Purchaser Representative's sole judgment, other onerous conditions under or
pursuant to any applicable law or governmental rule or regulation, and the
purchase of the Common Units by each Purchaser hereunder shall be permitted by
laws, rules and regulations of the jurisdictions and governmental authorities
and agencies to which such Purchaser is subject.
2.16 Filings. The Company shall have made all filings under all
-------
applicable federal and state laws, including, without limitation, federal and
state securities laws, necessary to consummate the transactions contemplated by
this Agreement, including, without limitation, the issuance of the Common Units
pursuant to this Agreement, in compliance with such laws.
2.17 Consents and Approvals. All consents and approvals by (a)
----------------------
governmental agencies that are required for the consummation of the transactions
contemplated hereby or the other agreements contemplated hereby will have been
obtained and (b) third parties that are required in order to prevent a breach
of, a default under, or a termination, change in the terms or conditions or
modification of, any instrument, contract, lease, license or other agreement and
required to be listed on the Contracts Schedule with an asterisk (*) or on the
------------------
Noncontravention Schedule will have been obtained on terms and conditions
- -------------------------
satisfactory to the Purchaser Representative.
2.18 Payoff Letters and Releases. The Company shall have provided
---------------------------
payoff letters from lenders of all indebtedness to be discharged pursuant to
Section 1.01(m) and obtained releases of all Liens relating to the assets and
properties of the Company and its Subsidiaries.
2.19 Excluded Assets. The assets set forth on Exhibit I attached
--------------- ---------
hereto (the "Excluded Assets") shall have been distributed out of the Company to
---------------
AIM.
2.20 Executive Purchase Agreements. Each of AIM, (on behalf of DM),
-----------------------------
Albert Bove, Arthur Innamorato and William Kania shall have entered into an
executive purchase agreement substantially in the form of Exhibit J attached
---------
hereto (the "Executive Purchase Agreements"), and the Executive Purchase
-----------------------------
Agreements shall be in full force and effect as of the Closing.
2.21 Termination of "Sweep" Arrangement. The existing "sweep"
----------------------------------
arrangement that RA personally has with Community General Bank (or any other
banks or financial institutions) will have been terminated.
2.22 Repayment of Related Party Loans. The Company shall have been
--------------------------------
repaid all of its loans or other amounts owed to it by the Persons identified on
the Affiliated Transactions Schedule.
--------------------------------
2.23 Acquisition of Lindsay Crane. The Company shall have entered
----------------------------
into a definitive agreement to acquire the business of Lindsay Crane for a
purchase price not to exceed $2 million in cash plus the assumption or
refinancing of not more than $760,000 of indebtedness for borrowed money, which
purchase price will be adjusted downward on a dollar-for-dollar basis to
-10-
<PAGE>
the extent that Lindsay Crane's net worth is less than $279,000 (excluding any
gain from the sale of assets after January 1, 1998). The purchase agreement
shall also include a noncompete agreement from SA and other terms and conditions
satisfactory to the Purchaser Representative.
2.24 Closing Documents. At the Closing, the Company shall have
-----------------
delivered to the Purchaser Representative all of the following documents:
(a) a certificate of an officer of the Company, dated as of the
Closing Date, stating that the conditions specified in Section 1 and Sections
2.01 through 2.23, inclusive, have been fully satisfied;
(b) certified copies of the resolutions duly adopted by the Company's
general partner authorizing the execution, delivery and performance of this
Agreement and each of the other agreements contemplated hereby, the amendment
and restatement of the limited partnership agreements referred to in Section
2.02, the distribution to the Current Owners referred to in Section 1.01, the
restructuring of the Company and its Affiliates referred to in Section 1.01 and
the issuance and sale of the Common Units referred to in Section 1.01;
(c) a certified copy of the limited partnership agreements of
Holdings, the Company and each of the Company's Subsidiaries, in each case as in
effect immediately prior to the Closing;
(d) copies of all third party and governmental consents, approvals
and filings required in connection with the consummation of the transactions
hereunder (including, without limitation, all blue sky law filings and waivers
of all preemptive rights and rights of first refusal, if any);
(e) good standing certificates of Holdings, the Company and the
Company's Subsidiaries from their jurisdiction of organization and each
jurisdiction in which Holdings, the Company and each of the Company's
Subsidiaries is qualified to do business as a foreign limited partnership, in
each case dated as of a recent date prior to the Closing Date; and
(f) such other documents relating to the transactions contemplated by
this Agreement as the Purchaser Representative or its special counsel may
reasonably request.
2.25 Waiver. Any condition specified in this Section 2 may be waived
------
if consented to by the Purchaser Representative.
Section 3. Conditions of the Company's and the Current Owner's
---------------------------------------------------
Obligations at the Closing. The obligation of the Company and the Current
- --------------------------
Owners to take the actions set forth in Section 1 at or prior to the Closing is
subject to the satisfaction as of the Closing of the following conditions:
3.01 Representations and Warranties; Covenants. The representations
-----------------------------------------
and warranties contained in Section 7 hereof shall be true and correct in all
material respects at and as
-11-
<PAGE>
of the Closing as though then made, and the Purchasers shall have performed in
all material respects all of the covenants required to be performed by them
hereunder at or prior to the Closing.
3.02 Amendment of Limited Partnership Agreement. Holdings' Limited
------------------------------------------
Partnership Agreement shall have been amended and restated in the form of
Exhibit B-1, shall be in full force and effect under the laws of the State of
- -----------
Pennsylvania as of the Closing as so amended and restated and shall not have
been further amended or modified.
3.03 Escrow Agreement. The Company shall have entered into the Escrow
----------------
Agreement and the Escrow Agreement shall be in full force and effect as of the
Closing.
3.04 Securityholders Agreement. The Purchasers shall have entered
-------------------------
into the Securityholders Agreement, and the Securityholders Agreement shall be
in full force and effect as of the Closing.
3.05 Registration Agreement. The Purchasers shall have entered into
----------------------
the Registration Agreement, and the Registration Agreement shall be in full
force and effect as of the Closing.
3.06 Employment Agreement. The Company shall have entered into the
--------------------
Employment Agreement, and the Employment Agreement shall be in full force and
effect as of the Closing.
3.07 Consulting Agreement. The Company shall have entered into the
--------------------
Consulting Agreement, and the Consulting Agreement shall be in full force and
effect as of the Closing.
3.08 Sale of Common Units to Each Purchaser. Holdings shall have
--------------------------------------
simultaneously sold to each Purchaser the Common Units to be purchased by such
Purchaser hereunder at the Closing and shall have received payment therefor in
full.
3.09 Distribution to Current Owners. The Company shall have
------------------------------
distributed to the Current Owners the Estimated Distribution Amount less the
----
Escrow Amount.
3.10 Proceedings. All corporate and other proceedings taken or
-----------
required to be taken by the Purchasers in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Company, the Current Owner Representative and their special
counsel.
3.11 Compliance with Applicable Laws; Permits.
----------------------------------------
(a) No action or proceeding before any court or governmental body
will be pending or threatened which, in the judgment of the Current Owner
Representative, makes it inadvisable or undesirable to consummate the
transactions contemplated by this Agreement by reason of the probability that
the action or proceeding will result in a judgment, decree or order that would
prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, declare unlawful the transactions contemplated hereby or
cause such transactions to be rescinded.
-12-
<PAGE>
(b) The purchase or receipt of the Common Units by each Current Owner
hereunder shall not be prohibited by any applicable law or governmental rule or
regulation and shall not subject such Current Owner to any penalty, liability
or, in the Current Owner Representative's sole judgment, other onerous
conditions under or pursuant to any applicable law or governmental rule or
regulation, and the purchase of the Common Units by each Current Owner hereunder
shall be permitted by laws, rules and regulations of the jurisdictions and
governmental authorities and agencies to which such Current Owner is subject.
3.12 Consents and Approvals. All consents and approvals by
----------------------
governmental agencies that are required for the consummation of the transactions
contemplated hereby or the other agreements contemplated hereby will have been
obtained on terms and conditions satisfactory to the Company and the Current
Owner Representative.
3.13 Financing Arrangements. The Company shall have consummated the
----------------------
Senior Facility and the Senior Note Offering pursuant to the terms and
conditions of the Commitment Letters and consummated the equity financing
pursuant to the terms and conditions of the Equity Commitment Letter. All debt
obligations of the Company will be nonrecourse liabilities within the meaning of
Treasury Regulation Section 1.752-1 promulgated under Section 752 of the Code,
and allow the Company to make distributions to its partners to pay income taxes.
3.14 Filings. The Company shall have made all filings under all
-------
applicable federal and state laws, including, without limitation, federal and
state securities laws, necessary to consummate the transactions contemplated by
this Agreement, including, without limitation, the issuance of the Common Units
pursuant to this Agreement, in compliance with such laws.
3.15 Waiver. Any condition specified in this Section 3 may be waived
------
if consented to in writing by the Company and the Current Owner Representative.
Section 4. Pre-Closing Covenants and Agreements. Each of the Parties
------------------------------------
agrees as follows with respect to the period between the execution of this
Agreement and the Closing:
4.01 General. Each of the Parties will use its reasonable best
-------
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the conditions set forth
in Sections 2 and 3).
4.02 Notices and Consents. The Company and the Current Owners will
--------------------
use its, his or her reasonable best efforts to (a) give required notices to
third parties, (b) obtain any required governmental or third party consents and
shall make any filings pursuant thereto that may be necessary, proper or
advisable in connection therewith and (c) take any actions reasonably required
by a third party, in each case, in connection with the matters contemplated by
this Agreement.
4.03 Affirmative Covenants of the Current Owners and the Company.
-----------------------------------------------------------
Prior to the Closing, except as otherwise expressly provided herein, the Current
Owners will cause the Company to, and the Company will (and in the case of
clauses (e), (f) and (g) hereof, the Current Owners will):
-13-
<PAGE>
(a) conduct its business (including, without limitation, the
collection of receivables, purchase of inventory, payment of payables and
incurrence of and payment or financing for capital expenditures) only in the
usual and ordinary course of business in accordance with past custom and
practice;
(b) carry on its business in the same manner as presently conducted
and keep its organization and properties substantially intact;
(c) maintain in full force and effect all Intellectual Property
which is material to the Company;
(d) encourage (and not act to dissuade or discourage) employees to
continue their employment with the Company after the Closing;
(e) promptly (once they have knowledge thereof) inform the Purchaser
Representative in writing of (i) any variances from the representations and
warranties contained in Sections 5 or 6 hereof or event or occurrence which
would cause such representations and warranties to be incorrect as of the
Closing, (ii) any breach of any covenant hereunder by the Company or any Current
Owner and (iii) any other material development affecting the ability of such
Party to consummate the transactions contemplated by this Agreement; provided
--------
that unless the Purchaser Representative has the right to terminate this
Agreement pursuant to Section 10(b) by reason of any variance, breach or
development and exercises that right within ten business days from the date of
such notice, the written notice pursuant to this Section 4.03(e) will be deemed
to have amended the Disclosure Schedules, to have qualified the representations
and warranties contained in Section 5 and to have cured any misrepresentations
or breach of warranty or covenant that otherwise might have existed, in each
case only with respect to the matters specifically identified in the written
notice provided to the Purchaser Representative; provided further that the
--------
Disclosure Schedules will only be deemed amended and the representations,
warranties and covenants will only be deemed qualified or cured with respect to
items which are material.
(f) cooperate with the Purchasers and use their reasonable best
efforts to cause the conditions to the Purchasers' obligations to close
specified in Section 2 above to be satisfied and execute and deliver such
further instruments of conveyance and transfer and take such additional action
as the Purchaser Representative may reasonably request to effect, consummate,
confirm or evidence the transactions contemplated by this Agreement;
(g) transfer all assets (other than the Excluded Assets) which are
used in the Company's business, but owned by the Current Owners (or the
stockholders or partners of the Current Owners) into the name of the Company;
(h) distribute the Excluded Assets out of the Company;
(i) terminate, distribute or transfer the life insurance policy on
the life of Ray Anthony; and
-14-
<PAGE>
(j) upon the reasonable request of the Purchaser Representative,
report on financial reporting, operational matters and the general status of
ongoing operations.
4.04 Negative Covenants of the Current Owners and the Company. Prior
--------------------------------------------------------
to the Closing, without the prior written consent of the Purchaser
Representative, the Current Owners will cause the Company to not, and the
Company will not:
(a) take any action that would require disclosure under Section 5.21
below:
(b) redeem or otherwise acquire, any partnership interests, make any
distribution to its partners (other than the cash and assets listed on Exhibit I
---------
delivered on the date hereof), or make any loan or enter into any transaction
with any of its officers, directors, partners or Affiliates other than arms
length transactions with Century Steel Erectors and Steel City Environmental
consistent with past custom and practice;
(c) sell, lease, license or otherwise dispose of any interest in any
of the Company's assets, other than sales of inventory and equipment and leases
of equipment in the ordinary course of business consistent with past practice,
or permit, allow or suffer any of the assets to be subjected to any Lien (other
than Permitted Liens);
(d) terminate or modify in any material respect any contract required
to be disclosed on the Contracts Schedule or any government license, permit or
------------------
other authorization;
(e) enter into any new, or amend any existing, material contracts,
agreements or commitments, including, without limitation, any lease agreements,
(except for contracts, agreements or commitments entered into in the ordinary
course of business and for commitments relating to capital expenditures
consistent with the budget provided to the Purchaser Representative prior to the
date hereof and an agreement to purchase the business of Lindsay Crane).
(f) institute any material change in the conduct of its business, or
any change in its method of purchase, sale, lease, management, marketing,
operation or accounting;
(g) incur any Indebtedness for borrowed money (other than
Indebtedness incurred to finance the Company's ordinary course working capital
needs and other Indebtedness so long as total Indebtedness does not exceed
$215,000,000 plus the amount of Indebtedness assumed to acquire the business of
----
Lindsay Crane prior to the Closing in an amount not to exceed $2,760,000); or
(h) increase any officer's or employee's compensation, incentive
arrangements or other benefits, except for increases made in the ordinary course
of business consistent with past custom and practice, or pursuant to any written
agreement disclosed to the Purchaser Representative and in existence on the date
hereof.
4.05 Full Access. The Company will permit representatives of the
-----------
Purchasers to have full access at all reasonable times, and in a manner so as
not to interfere with the normal
-15-
<PAGE>
business operations of the Company and its Subsidiaries, to all properties,
personnel, books, records, contracts and other documents of or pertaining to the
Company and its Subsidiaries.
4.06 Notice of Material Developments. Each Purchaser will give prompt
-------------------------------
written notice to the other Parties of any (a) representation or warranty of
such Purchaser contained in Section 7 which was true as of the date hereof, but
which has subsequently become untrue, (b) breach of any covenant hereunder by
such Purchaser and (c) other material development affecting the ability of such
Purchaser to consummate the transactions contemplated by this Agreement.
4.07 Exclusivity. Until consummation of the transactions contemplated
-----------
hereby or termination of this Agreement pursuant to Section 10, none of the
Company, the Current Owners or any of their respective Subsidiaries, Affiliates,
stockholders, partners, representatives, officers, employees, directors, or
agents will, directly or indirectly, (a) submit, solicit, initiate, encourage or
discuss any proposal or offer from any Person or enter into any agreement or
accept any offer relating to any (i) reorganization, liquidation, dissolution or
refinancing of any of the Company or any of its Subsidiaries, (ii)
recapitalization, merger or consolidation involving the Company or any of its
Subsidiaries, (iii) purchase or sale of any assets (other than a purchase or
sale of inventory or equipment in the ordinary course of business consistent
with past custom and practice) or partnership interests of the Company or any of
its Subsidiaries or (iv) similar transaction or business combination involving
the Company or any of its Subsidiaries or the assets of any of them (each of the
foregoing actions described in clauses (i) through (iv), a "Company
-------
Transaction") or (b) furnish any information with respect to, assist or
participate in or facilitate in any other manner any effort or attempt by any
Person to do or seek to do any of the foregoing; provided that any transactions
--------
contemplated hereby shall not constitute a Company Transaction for purposes
hereof. The Company and each Current Owner agree to notify the Purchaser
Representative immediately if any Person makes any bona fide oral or any written
proposal, offer, inquiry or contact with respect to a Company Transaction.
4.08 Actions with Respect to Partnership Interests. Until
---------------------------------------------
consummation of the transactions contemplated hereby or termination of this
Agreement pursuant to Section 10, the Current Owners agree that they will not
sell, redeem, convert, assign, exchange, transfer, pledge or otherwise dispose
of any of their partnership interests, except as expressly contemplated by this
Agreement.
4.09 Real Estate Matters.
-------------------
(a) At its option, the Purchaser Representative may obtain in
preparation for the Closing, a commitment for an ALTA Owner's or Leasehold
Policy of Title Insurance, as the case may be, Form B-1970, for each parcel of
Owned Real Property and each material Leased Real Property (the "Title
-----
Commitments"), issued by a title insurer satisfactory to the Purchaser
- -----------
Representative (the "Title Insurer"), in such amount as the Purchaser
-------------
Representative determines to be the fair market value (including all
improvements thereon), insuring the Company's interest in such parcel as of
Closing, subject only to the Permitted Liens. If requested by the Purchaser
Representative, the Company shall deliver at the time of delivery of the Title
Commitments, copies of all documents of record referred to therein. At its
option, the Purchaser Representative may
-16-
<PAGE>
obtain title insurance policies (the "Title Policies") on or before the Closing,
--------------
from the Title Insurer based upon the Title Commitments. If requested by the
Purchaser Representative, the Company will deliver to the Title Insurer all
affidavits, undertakings and other title clearance documents necessary to issue
the Title Policies and endorsements thereto. Each such Title Policy will be
dated as of the date of the Closing and to the extent available at reasonable
rates, (i) insure title to the applicable parcels of real estate and all
recorded easements benefitting such parcels, subject only to Permitted Liens,
(ii) contain an "extended coverage endorsement" insuring over the general
exceptions contained customarily in such policies, (iii) contain an ALTA Zoning
Endorsement 3.1, with parking (or equivalent), (iv) contain an endorsement
insuring that the parcel described in such Title Policy is the parcel shown on
the survey delivered with respect to such parcel and a survey accuracy
endorsement, (v) contain an endorsement insuring that each street adjacent to
such parcel is a public street and that there is direct and unencumbered
pedestrian and vehicular access to such street from such parcel, (vi) if the
real estate covered by such policy consists of more than one record parcel,
contain a "contiguity" endorsement insuring that all of the record parcels are
contiguous to one another, (vii) contain a non-imputation endorsement, (viii)
contain a tax number endorsement and (ix) contain such other endorsements as the
Purchaser Representative may reasonably request. The costs of any Title
Commitments and Title Policies will be split evenly between the Purchasers on
the one hand and the Company on the other hand.
(b) At its option, the Purchaser Representative may obtain in
preparation for the Closing, current surveys of each parcel of Owned Real
Property and each material Leased Real Property prepared by a licensed surveyor
satisfactory to the Purchasers, and conforming to 1992 ALTA/ACSM Minimum Detail
Requirements for Urban Land Title Surveys (the "Surveys"), and such standards as
-------
the Title Insurer may require as a condition to the removal of any survey
exceptions from the applicable Title Policy, and certified to the Company, the
Company's lender and the Title Insurer, within 30 days of the Closing Date, in a
form satisfactory to such parties. The Surveys shall disclose the location of
all improvements, easements, party walls, sidewalks, roadways, utility lines and
such matters shown customarily on such surveys, show access affirmatively to
public streets and roads, and include Table A Item Nos. 1-4 and 6-14. The costs
of the Surveys will be split evenly between the Purchasers on the one hand and
the Company on the other hand.
(c) Prior to Closing, the Company shall use reasonable best efforts
to obtain with respect to each parcel of Leased Real Property for which the
Purchaser Representative requests from the Company in writing at least fifteen
(15) days prior to the Closing (i) an estoppel and consent letter in a form
reasonably satisfactory to the Purchaser Representative (the "Estoppel and
------------
Consent Letter") from the landlords, lessors, sublessors or licensors of such
- --------------
Leased Real Property (each a "Landlord") stating that (A) a copy of the lease,
--------
sublease, license or tenancy agreement demising the Leased Real Property (each a
"Lease"), attached to the Estoppel and Consent Letter is a true, correct and
-----
complete copy of the Lease, and represents the entire agreement between the
Landlord and the Company or its applicable Subsidiary; (B) to the Landlord's
knowledge the Company or its applicable Subsidiary is not in breach or default
under the Lease, and no event has occurred which would with notice or passage of
time, or both, constitute a breach or default or permit termination,
modification, or acceleration under the Lease and the Landlord has not
repudiated any provision of the Lease; (C) all rent and other payments owed by
the Company or its applicable Subsidiary to the Landlord have been paid to date,
(D) to the Landlord's knowledge there are no disputes, oral
-17-
<PAGE>
agreements or forbearance agreements in effect as to the Lease, (E) if
applicable, that the Landlord consents to the assignment of the Lease (resulting
from a change in control of the Company or its applicable Subsidiary) and (F)
containing such other statements or agreements as the Purchasers may reasonably
request; (ii) a non-disturbance agreement in form and content reasonably
satisfactory to the Purchasers' Representative from each lender of each
Landlord; and (iii) a landlord lien waiver agreement in form and content
reasonably satisfactory to the Purchaser Representative stating that Landlord
agrees to be subordinated to the Company's lenders with respect to rights to
foreclose on any of the Company's (or any of its Subsidiaries') property and
equipment which are located on such Leased Real Property.
4.10 Financial Information. The Company shall furnish to the
---------------------
Purchasers: (a) audited consolidated financial statements for the Company for
the years ended December 31, 1997, 1996 and 1995 prepared in accordance with
GAAP and in a form meeting the requirements of Regulation S-X of the Securities
Act of 1933, as amended ("Regulation S-X"); (b) the reviewed unaudited
--------------
consolidated financial statements for the Company for the three-month periods
ending March 31, 1998 and 1997 prepared in accordance with GAAP and in a form
meeting the requirements of Rule 10-01 of Regulation S-X; (c) selected financial
data for the five years in the period ended December 31, 1997 in a form meeting
the requirements of Item 301 of Regulation S-K of the Securities Act of 1933, as
amended ("Regulation S-K"); and (d) assistance with preparing "Management's
--------------
Discussion and Analysis of Financial Condition and Results of Operations" in
accordance with Item 303 of Regulation S-K for the years 1997, 1996 and 1995 and
the interim periods ended March 31, 1998 and March 31, 1997 (and, in each case,
use reasonable best efforts to obtain the consent of the Company's independent
accountants to the use of their reports thereon and the issuance of a "comfort
letter" required by the underwriter of the notes issued pursuant to the Senior
Note Offering).
Section 5. Representations and Warranties with Respect to the
--------------------------------------------------
Company. As a material inducement to the Purchasers to enter into this
Agreement and purchase the Common Units hereunder, the Company hereby represents
and warrants that:
5.01 Organization. Each of the Company and its Subsidiaries is a
------------
limited partnership duly organized and validly existing under the laws of the
State of Pennsylvania and has full power and authority and all material
licenses, permits, and authorizations necessary to carry on the businesses in
which it is engaged and to own and use the properties owned and used by it. The
Organization Schedule attached hereto lists all of the jurisdictions in which
- ---------------------
the Company and its Subsidiaries are required to qualify to do business as a
foreign entity, except where the failure to be qualified would not have a
material adverse effect on the business, assets, liabilities, financial
condition, operating results, labor or customer or supplier relations of the
Company and its Subsidiaries (a "Material Adverse Effect"). Each of the Company
-----------------------
and its Subsidiaries is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction listed on the Organization
------------
Schedule.
5.02 Authorization. The Company has full power and authority to
-------------
execute and deliver this Agreement and the agreements contemplated hereby to
which it is a party and to perform its obligations hereunder and thereunder.
This Agreement has been duly authorized, executed and
-18-
<PAGE>
delivered by the Company, and constitutes the valid and legally binding
obligation of the Company enforceable in accordance with its terms.
5.03 Capitalization and Related Matters.
----------------------------------
(a) As of the date hereof, and without giving effect to the amendment
and restatement of the Company's Limited Partnership Agreement, the outstanding
partnership interests of the Company are held beneficially and of record by the
Current Owners as set forth on the Disclosures Schedules Capitalization Schedule
---------------------------------------------
attached hereto, free and clear of all Liens. As of the Closing and immediately
thereafter and after giving effect to the amendment and restatement of Holdings'
Limited Partnership Agreement, the outstanding partnership interests of Holdings
shall be held beneficially and of record by the Persons as set forth on the
Recapitalized Equity Schedule attached hereto, free and clear of all Liens
- -----------------------------
(other than Liens created by such Persons). Except as set forth in the
immediately preceding sentence, neither the Company nor Holdings has and will,
as of the Closing Date, have outstanding any partnership interests or Units
convertible or exchangeable for any partnership interests or Units or containing
any profit participation features, nor any rights or options to subscribe for or
to purchase its partnership interests or Units or any partnership interests or
Units or securities convertible into or exchangeable for its partnership
interests or Units or any partnership interest or Unit appreciation rights or
phantom partnership interest or Unit plans. Neither the Company nor Holdings is
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any partnership interests or Units or any warrants, options or
other rights to acquire its partnership interests or Units, other than as
expressly provided in this Agreement and, as of the Closing, pursuant to the
Amended and Restated Limited Partnership Agreement and the Securityholders
Agreement. As of the date hereof and as of the Closing and immediately
thereafter, all of Holdings' and the Company's outstanding Units are or shall be
validly issued, fully paid and nonassessable.
(b) There are no statutory or contractual preemptive rights or rights
of first refusal or other similar restrictions with respect to the issuance of
the Units hereunder or the restructuring of the Current Ownership Interests.
Based on the representations and warranties of the Purchasers contained herein,
Holdings has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its partnership interests
and the offer, sale and issuance of the Class L Common Units and Class A Common
Units does not require registration under the Securities Act or any applicable
state securities laws. Except for the Amended and Restated Limited Partnership
Agreement and the Securityholders Agreement to be executed and delivered at the
Closing, there are no agreements between Holdings' partners or among any other
Person with respect to the voting or transfer of Holdings' partnership interests
or with respect to any other aspect of Holdings' governance.
5.04 Noncontravention. Except as set forth on the Noncontravention
---------------- ----------------
Schedule, neither the execution and the delivery of this Agreement or the
- --------
agreements contemplated hereby nor the consummation of the transactions
contemplated hereby or thereby, will (a) violate in any material respect any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Company or any of its Subsidiaries is subject, (b) violate
any provision of the Company's or any of its Subsidiaries' limited partnership
agreement or (c) materially conflict with, result in a material breach
-19-
<PAGE>
of, constitute a material default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any material agreement, contract, lease, license, instrument,
or other arrangement to which the Company or any of its Subsidiaries is a party
or by which any of them is bound or to which any of their respective assets is
subject or (d) result in the imposition of any security interest upon any
material assets of the Company or its Subsidiaries. Except as set forth on
Noncontravention Schedule attached hereto, to the Company's knowledge, neither
- -------------------------
the Company nor any of its Subsidiaries is required to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for (i) the Parties to consummate the
transactions contemplated by this Agreement and (ii) the Company to carry on its
business after the Closing in substantially the same manner as presently
conducted.
5.05 Brokerage. Except for the fees and expenses of Clayton & Andrews
---------
(which will be paid prior to Closing or will be accrued as a liability on the
Closing Balance Sheet), neither the Company nor any of its Subsidiaries has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
the Purchasers or, after the Closing, the Company could become liable or
obligated.
5.06 Subsidiaries and Investments. The Company does not own, directly
----------------------------
or indirectly, any stock, partnership interest, joint venture interest or other
security or interest in any other Person, except for 97% of the partnership
interests of Holdings, 97% of the partnership interests of ACI and 99% of the
partnership interests of New ACSL. The remaining 3% of the partnership
interests of Holdings and ACI and 1% of the partnership interests of New ACSL is
owned by the General Partner.
5.07 Financial Statements. The Financial Statements Schedule
-------------------- -----------------------------
attached hereto contains the following financial statements (collectively the
"Financial Statements"): (a) audited consolidated balance sheets and statements
--------------------
of income and statements of cash flows as of and for the years ended December
31, 1995, December 31, 1996, and December 31, 1997 (the "Most Recent Fiscal Year
-----------------------
End") for the Company; and (b) an unaudited consolidated balance sheet (the
- ---
"Latest Balance Sheet") and statement of income and statement of cash flows as
--------------------
of and for the 4 months ended April 30, 1998 (together with the Latest Balance
Sheet, the "Latest Financial Statements"), for the Company. The Financial
---------------------------
Statements (including the notes thereto) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of the Company as of such dates and the
results of operations of the Company for such periods, are correct and complete
in all material respects, and are consistent with the books and records of the
Company, except that the Latest Financial Statements do not contain any
footnotes and are subject to normal year end audit adjustments.
5.08 Undisclosed Liabilities. Except as set forth on the Undisclosed
----------------------- -----------
Liability Schedule, the Company has no material liabilities (whether known or
- ------------------
unknown, whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), except for
liabilities (a) recorded in the Latest Balance Sheet or disclosed in the
footnotes thereto, (b) liabilities and obligations incurred after the date as of
which such balance sheet is dated in the ordinary course of business (none of
which relates to (i) breach of contract (other than
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<PAGE>
customer write-offs, discounts or adjustments in the ordinary course of business
and consistent with past custom and practice) (ii) breach of warranty, (iii)
tort, (iv) infringement, (v) violation of law, (vi) any action, suit or
proceeding (including, without limitation, any proceeding in eminent domain or
other similar proceeding affecting any portion of the Owned Real Property or the
Leased Real Property), (vii) any environmental matter, including, without
limitation, any matter arising under Environmental, Health and Safety
Requirements or (viii) any writ, injunction, decree, order, judgment, or
litigation affecting the ownership, lease, occupancy or operation of the Owned
Real Property or the Leased Real Property, in each case which could reasonably
be expected to have a Material Adverse Effect), (c) set forth on the Disclosure
Schedules attached hereto, and (d) under or in connection with contracts,
agreements and other arrangements disclosed on the Contracts Schedule or not
------------------
required to be disclosed on the Contracts Schedule attached hereto due solely to
------------------
the specific dollar thresholds and other requirements contained in Section 5.14
below.
5.09 Legal Compliance and Permits.
----------------------------
(a) Except as set forth on the Legal Compliance and Permits Schedule
-------------------------------------
attached hereto, the Company and its Subsidiaries have complied with and are in
compliance with all applicable laws, rules, regulations and orders of federal,
state, local, and foreign governments (and all agencies thereof) and with all
instruments of record, agreements, easements, covenants, conditions and
restrictions affecting the Owned Real Property and the Leased Real Property,
except for such noncompliance which would not reasonably be expected to have a
Material Adverse Effect, and no action, suit, proceeding or hearing is pending
against the Company or its Subsidiaries alleging any failure to so comply and no
notice (written or oral), charge or claim has been received by the Company or
its Subsidiaries alleging any failure to so comply in respect of the Company or
its Subsidiaries. Except as set forth on the Legal Compliance and Permits
----------------------------
Schedule attached hereto, the Owned Real Property and the Leased Real Property
- --------
is in compliance with all applicable building, zoning, subdivision, entitlement
and all other land use and similar laws affecting the Owned Real Property and
the Leased Real Property (collectively, the "Real Property Laws"), except for
------------------
such noncompliance which would not reasonably be expected to have a Material
Adverse Effect, and the Company has not received any notice of violation or
claimed violation of any Real Property Law.
(b) Except as set forth on the Legal Compliance and Permits Schedule
-------------------------------------
attached hereto, to the knowledge of the Company, each of the Company and its
Subsidiaries holds all material permits, licenses, certificates, accreditations
and other authorizations (including, but not limited to, OSHA ratings) (the
"Permits") of all foreign, federal, state and local governmental agencies for
-------
the conduct of its business and the ownership of its properties. Each of the
Company and its Subsidiaries is in compliance with the terms and conditions of
all such Permits which it holds and all such Permits will be available for use
by the Company and its Subsidiaries immediately after the Closing.
5.10 Tangible Assets. Except as set forth on the Assets Schedule, the
--------------- ---------------
assets owned or leased by the Company and its Subsidiaries include all
buildings, machinery, equipment, and other tangible assets sufficient for the
conduct of the business of the Company and its Subsidiaries as presently
conducted, and such assets are, subject to normal wear and tear, free from
material defects, are in good operating condition and repair, and are suitable
for the purposes for which they presently are used (except for equipment that is
being or is planned to be repaired consistent with
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<PAGE>
past custom or practice or immaterial amounts of assets which are used as spare
parts, which are intended to be reworked or which are scrap items consistent
with past custom and practice).
5.11 Title to Personal Property. Each of the Company and its
--------------------------
Subsidiaries has good title to, or a valid leasehold interest in, all personal
property used in connection with the operation of the business of the Company
and its Subsidiaries, free and clear of any material Liens, except (a) as set
forth in the Permitted Liens Schedule attached hereto, (b) Liens for Taxes not
------------------------
yet due and payable or being contested in good faith by appropriate proceedings
and in respect of which adequate reserves under GAAP have been established on
the books of the Company and (c) Permitted Liens.
5.12 Title to Real Property.
----------------------
(a) The Real Property Schedule attached hereto sets forth all of the
----------------------
real property owned by the Company or its Subsidiaries (the "Owned Real
----------
Property"). Except as disclosed on the Real Property Schedule, with respect to
----------------------
each parcel of Owned Real Property, (i) the Company has, or on the Closing Date
will have, good and marketable title, free and clear of any material Lien,
except for Permitted Liens, (ii) there are no leases, subleases, licenses,
concessions, or other agreements granting to any party or parties the right of
use or occupy any portion thereof; and (iii) there are no outstanding options or
rights of first refusal to purchase such parcels or any portions thereof or
interest therein.
(b) The Real Property Schedule attached hereto sets forth all of the
----------------------
real property leased or subleased by the Company or its Subsidiaries (the
"Leased Real Property"). The Company or its applicable Subsidiary has a good and
--------------------
valid leasehold interest in and to all of the Leased Real Property, free and
clear of any material Lien, except for Permitted Liens. The Leases under which
the Company leases and subleases the Leased Real Property are in full force and
effect and the Company has previously delivered to the Purchasers true, correct
and complete copies of each of the Leases, including, without limitation, all
amendments or modifications thereto, referred to on the Real Property Schedule.
----------------------
With respect to each Lease: (i) such Lease is legal, valid, binding and
enforceable in accordance with its terms and such Lease is in full force and
effect, and (ii) neither the Company nor, to the best of the Company's and the
Current Owners' knowledge, any third party, is in material breach or default
under such Lease, and, except as noted on the Real Property Schedule by an
----------------------
asterisk (*) opposite the applicable Lease, no event has occurred (including the
consummation of the transactions contemplated hereby) which, with the lapse of
time or the giving of notice, or otherwise would constitute such a material
breach or default or permit termination, modification, or acceleration under
such Lease. Except as disclosed on the Real Property Schedule, no consent,
waiver, approval or authorization is required from any Landlord under any Lease
as a result of the execution and delivery of this Agreement or the agreements
contemplated hereby or the consummation of the transactions contemplated hereby
or thereby.
(c) Except for the Excluded Assets, the Owned Real Property and the
Leased Real Property constitutes all of the real property owned, leased,
occupied or otherwise utilized in connection with the business of the Company or
its Subsidiaries.
-22-
<PAGE>
5.13 Litigation. The Litigation Schedule attached hereto sets forth
---------- -------------------
each instance in which the Company, any of its Subsidiaries or any of their
assets (a) is subject to any outstanding injunction, judgment, order, decree,
ruling, or charge or (b) is a party or subject to, or, to the knowledge of the
Company, its Subsidiaries and the Current Owners, is threatened to be made a
party or be made subject to any action, suit, proceeding (including, without
limitation, any proceeding in eminent domain or similar proceeding), hearing, or
investigation of, in, or before any court, arbitrator or other body or
administrative agency of any federal, state, local, or foreign jurisdiction.
5.14 Contracts.
---------
(a) The Contracts Schedule attached hereto lists the following
------------------
contracts, agreements and other arrangements to which the Company or any of its
Subsidiaries is a party and denotes with an asterisk (*) whether the consent of
any third party thereto is required as a result of the consummation of the
transactions contemplated by this Agreement:
(i) collective bargaining agreement or any other material
contract with any labor union, or severance agreements, programs, policies
or arrangements;
(ii) management agreement, contract for the employment of any
officer, individual employee or other Person on a full-time, part-time,
consulting or other basis providing annual cash or other compensation in
excess of $50,000 (other than at-will employment arrangements) or providing
for the payment of any cash or other compensation or benefits upon the
consummation of the transactions contemplated hereby;
(iii) material contract or agreement requiring the consent of
any party thereto upon a change in control of the Company or any of its
Subsidiaries, containing any provision which would result in a modification
of any rights or obligations of any party thereunder upon a change in
control of the Company or any of its Subsidiaries or which would provide
any party any remedy (including rescission or liquidated damages) in the
event of a change in control of the Company or any of its Subsidiaries;
(iv) contract under which it has advanced or loaned monies to
any other Person or otherwise agreed to advance, loan or invest any funds
(other than advances to the Company's or any of its Subsidiaries' employees
in the ordinary course of business consistent with past practice or amounts
less than $50,000 in the aggregate);
(v) agreement or indenture relating to borrowed money or other
Indebtedness or the mortgaging, pledging or otherwise placing a material
Lien on any asset or group of assets of the Company or any of its
Subsidiaries or any letter of credit arrangements;
(vi) guaranty of any material obligation for borrowed money or
otherwise (other than endorsements made for collection in the ordinary
course of business);
-23-
<PAGE>
(vii) lease or agreement under which the Company or any of its
Subsidiaries is lessee of or holds or operates any property, real or
personal, owned by any other Person, except for any lease of personal
property under which the aggregate annual rental payments do not exceed
$50,000;
(viii) material lease or agreement under which the Company or
any of its Subsidiaries is lessor of or permits any third party to hold or
operate any property, real or personal, owned or controlled by the Company
or any of its Subsidiaries;
(ix) material license or royalty agreements;
(x) nondisclosure or confidentiality agreements (other than
those entered into in the ordinary course of business with customers,
suppliers and employees);
(xi) contract or group of related contracts with the same
party or group of affiliated parties for the purchase of raw materials,
commodities, supplies, products, equipment or other personal property or
for the receipt of services under which the undelivered balance of such
products and services has a selling price in excess of $100,000;
(xii) open purchase orders for the purchase of equipment in
excess of $100,000;
(xiii) brokerage contracts involving equipment with a value in
excess of $100,000;
(xiv) pricing contracts for leasing services with the Company's
top 20 customers measured by rental revenue;
(xv) material contract relating to the marketing, sale,
advertising or promotion of its products;
(xvi) agreements relating to the ownership of or investments in
any business or enterprise, including investments in joint ventures and
minority equity investments;
(xvii) material assignment, license, indemnification or other
agreement with respect to any intangible property (including any
Intellectual Property);
(xviii) agreement under which it has granted any Person any
registration rights (including demand or piggyback registration rights);
(xix) material broker, agent, sales representative, sales or
distribution agreement or agreement relating to the export and/or import of
any goods or equipment;
(xx) power of attorney or other similar agreement or grant of
agency;
-24-
<PAGE>
(xxi) contract or agreement prohibiting it from freely engaging
in any business or competing anywhere in the world; or
(xxii) other agreement not in the ordinary course of business
which is material to its operations or business prospects or involves an
annual consideration in excess of $50,000,
(b) To the knowledge of the Company, all of the contracts, leases,
agreements and instruments set forth or required to be set forth on the
Contracts Schedule are valid, binding and enforceable in accordance with their
- ------------------
respective terms subject to the effects of (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws now or hereafter
in effect relating to creditors' rights generally or (ii) general principles of
equity. To the knowledge of the Company, the Company and each of its
Subsidiaries have performed all obligations required to be performed by them and
are not in material default under or in material breach of nor in receipt of any
claim of default or breach under any contract, lease, agreement or instrument to
which the Company or any of its Subsidiaries is subject; no event has occurred
which with the passage of time or the giving of notice or both would result in a
material default, material breach or event of noncompliance by the Company or
any of its Subsidiaries under any contract, lease, agreement or instrument to
which the Company or any of its Subsidiaries is subject; none of the Company or
any of its Subsidiaries have any present expectation or intention of not fully
performing all such obligations; none of the Company or any of its Subsidiaries
have knowledge of any breach or anticipated breach by the other parties to any
contract, lease, agreement, instrument or commitment to which it is a party; and
none of the Company or any of its Subsidiaries are parties to any contract or
commitment that could reasonably be expected to have a Material Adverse Effect;
provided that the existence of any customer write-off, discount or adjustment to
- --------
any of the Company's or any of its Subsidiaries' contracts will not constitute a
breach of the foregoing representations and warranties so long as such write-
off, discount or adjustment is reflected in, or if the associated revenue is not
reflected in, Consolidated Net Worth on the Closing Balance Sheet.
(c) The Purchasers' special counsel has been supplied with a true and
correct copy (or a copy has been made available to the Purchasers' special
counsel) of each of the written instruments, contracts and agreements and an
accurate description of each of the oral arrangements, contracts and agreements
which are referred to on the attached Contracts Schedule, together with all
------------------
amendments, waivers or other changes thereto or adjustment is reflected in the
Consolidated Net Worth.
5.15 Tax Matters. Except as set forth on the Taxes Schedule attached
----------- --------------
hereto:
(a) during the past five (5) years with respect to federal taxes and
the past two (2) years with respect to state and local Taxes, there has been no
material action, suit, proceeding or audit or any notice of inquiry of any of
the foregoing pending against or with respect to the Company or its Subsidiaries
regarding Taxes and, to the knowledge of the Company and its Subsidiaries, no
action, suit, proceeding or audit has been threatened against or with respect to
the Company or its Subsidiaries regarding Taxes;
-25-
<PAGE>
(b) neither the Company nor its Subsidiaries is a party to or bound
by any Tax allocation or Tax sharing agreement, neither has any current or
potential material contractual obligation to indemnify any other Person with
respect to Taxes, and neither has any material liability for the Taxes of any
Person (other than any of the Company or its Subsidiaries), as a transferee or
successor, by contract, or otherwise;
(c) to the knowledge of the Company, no claim has ever been made by a
taxing authority in a jurisdiction where the Company or its Subsidiaries does
not file Tax Returns that such Person is or may be subject to taxation by such
jurisdiction;
(d) each of the Company and its Subsidiaries has made available to
the Purchasers true, correct and complete copies of all income Tax Returns filed
by such Person for the past three (3) years along with all private rulings (to
the extent reasonably available or obtainable by the Company or its
Subsidiaries) and related material with respect to such period;
(e) neither the Company nor any of its Subsidiaries has consented to
extend the time, nor is the beneficiary of any extension of time, in which any
federal or state income Tax may be assessed or collected by any taxing
authority;
(f) neither the Company nor any of the Current Owners expects any
taxing authority to assess any material amount of additional Taxes (other than
Taxes not yet due and payable) against the Company or its Subsidiaries for any
Tax period ending on or before the Closing;
(g) there are no material Liens for Taxes (other than for Taxes not
yet due and payable) upon the assets of the Company or its Subsidiaries;
(h) neither the Company nor its Subsidiaries will be required (i) as
a result of a change in method of accounting for a Tax period ending prior to
December 31, 1997, to include any adjustment under Section 481(c) of the Code
(or any corresponding provision of state, local or foreign Tax law) in taxable
income for any such Tax period or (ii) as a result of any "closing agreement,"
as described in Section 7121 of the Code (or any corresponding provision of
state, local or foreign Tax law), to include any item of income or exclude any
item of deduction from any Tax period;
(i) none of the Current Owners is a "foreign person" for purposes of
the withholding requirements of Section 1445(a) of the Code (or any
corresponding provision of state, local or foreign Tax law), and neither the
Company nor any of its Subsidiaries has any permanent establishment in any
foreign country, as defined in the relevant tax treaty between the United States
of America and such foreign country;
(j) the Company and each of its Subsidiaries has been a partnership
for federal and all applicable state and local Tax purposes, in each case since
the date of its formation; and
(k) the Taxes Schedule lists all income Tax Returns relating to
--------------
federal, state, and foreign income filed with respect to any of the Company and
its Subsidiaries for taxable periods
-26-
<PAGE>
ended on or after December 31, 1993, indicates those Tax Returns that have been
audited, and indicates those Tax Returns that currently are the subject of
audit.
5.16 Intellectual Property.
---------------------
(a) The Intellectual Property Schedule attached hereto identifies (i)
------------------------------
each patent, trademark, servicemark, tradename, copyright or other registration
which has been issued to the Company or its Subsidiaries with respect to any
Intellectual Property used by the Company or its Subsidiaries, (ii) each pending
patent application or application for registration which the Company has made
with respect to any Intellectual Property used by the Company or its
Subsidiaries, (iii) each material item of unregistered Intellectual Property
owned or used by the Company or its Subsidiaries; (iv) each material license,
agreement, or other permission which the Company or any of its Subsidiaries has
granted to any third party with respect to any Intellectual Property used by the
Company or its Subsidiaries (together with any exceptions), and (v) each
material license, agreement or other permission under which the Company or any
of its Subsidiaries uses any Intellectual Property owned by a third party.
(b) Except as set forth on the Intellectual Property Schedule, to the
------------------------------
knowledge of the Company, the conduct of the Company's and its Subsidiaries'
businesses and the Intellectual Property owned or used by the Company or any
Subsidiary do not interfere with, infringe, misappropriate, or otherwise
conflict with any Intellectual Property or other rights of third parties.
Neither the Company nor any of its Subsidiaries has received notice of any
charge, complaint, claim or demand alleging any such interference, infringement,
misappropriation or conflict. Except as set forth on the Intellectual Property
---------------------
Schedule, neither the Company nor any of its Subsidiaries has knowledge that any
- --------
third party has interfered with, infringed, misappropriated, or otherwise come
into conflict with any Intellectual Property owned by the Company or its
Subsidiaries. Except as set forth on the Intellectual Property Schedule, the
------------------------------
Company and its Subsidiaries own or have valid and enforceable rights to use all
material Intellectual Property necessary for their businesses.
5.17 Insurance. The Insurance Schedule attached hereto sets forth the
--------- ------------------
following information with respect to each insurance policy insuring the
properties, business or assets of the Company and its Subsidiaries to which the
Company or its Subsidiaries is a party, a named insured, or otherwise the
beneficiary of coverage:
(a) the name of the insurer, the name of the policyholder, and the
name of each covered insured;
(b) the scope, period and amount of coverage; and
(c) a description of any retroactive premium adjustments or other
loss-sharing arrangements.
To the knowledge of the Company, with respect to each such insurance policy: (i)
the policy is legal, valid, binding, and enforceable in accordance with its
terms and is in full force and effect; (ii) neither the Company nor any of its
Subsidiaries is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which with notice
or lapse
-27-
<PAGE>
of time would constitute a breach or default by the Company or its Subsidiaries
or permit the insurer to terminate, modify, or accelerate, such policy; (iii)
neither the Company nor any of its Subsidiaries has repudiated any provision of
such policy; and (iv) the insurer is not in breach or default, and no event has
occurred which with notice or lapse of time would constitute a breach or default
by the insurer or permit the Company or its Subsidiaries to terminate, modify,
or accelerate, such policy. The Insurance Schedule describes any self-insurance
------------------
arrangements affecting the Company or its Subsidiaries.
5.18 Labor and Employment Matters. Except as set forth in the Labor
---------------------------- -----
Schedule, neither the Company nor any of its Subsidiaries is party to or bound
- --------
by any collective bargaining agreement or relationship with any labor
organization. Except as set forth in the Labor Schedule, to the knowledge of the
--------------
Company, with respect to the Company and its Subsidiaries: (a) no executive, key
employee or group of employees has any plans to terminate employment; (b) no
labor organization or group of employees has filed any representation petition
or made any written or oral demand for recognition; (c) no union organizing or
decertification efforts are underway or threatened and no other question
concerning representation exists; (d) within the past five years no labor
strike, work stoppage or slowdown, or other labor dispute has occurred, and none
is underway or threatened; (e) there is no employment-related charge, complaint,
grievance, investigation, inquiry or obligation of any kind, pending or
threatened in any forum, relating to an alleged violation or breach by the
Company or its Subsidiaries (or their officers or directors) of any law,
regulation or contract; and, (f) neither the Company nor its Subsidiaries has
committed any act or omission giving rise to liability for any violation
identified in subsection (e) above, or as a result of any adverse workman's
compensation experience. Any notice required under any law or collective
bargaining agreement has been given, and all bargaining obligations with any
employee representative have been or will be satisfied prior to Closing. Neither
the Company nor any of its Subsidiaries has implemented any plant closing or
mass layoff of employees of the Company or its Subsidiaries as those terms are
defined in the Worker Adjustment Retraining and Notification Act of 1988, as
amended, or any similar state or local law or regulation, and no layoffs that
could implicate such laws or regulations will be implemented before Closing
without advance notification to the Purchasers.
5.19 Employee Benefits.
-----------------
(a) Pension Plans. With respect to all employees and former
-------------
employees of the Company, its Subsidiaries and their predecessors, neither the
Company nor any of its Subsidiaries maintains or contributes to any Employee
Pension Benefit Plan (as defined in Section 3(2) of ERISA) other than the
Anthony Crane Rental 401(k) Profit Sharing Plan (the "Profit Sharing Plan").
-------------------
Except as set forth on the Employee Benefits Schedule, with respect to all
--------------------------
employees and former employees of the Company, its Subsidiaries and their
predecessors, neither the Company nor any of its Subsidiaries has any material
liability under (or with respect to) any Employee Pension Benefit Plan, whether
or not terminated.
(b) Welfare Plans. Except as set forth on the Employee Benefits
------------- -----------------
Schedule, with respect to all employees and former employees of the Company, its
- --------
Subsidiaries and their predecessors, neither the Company nor any of its
Subsidiaries maintains or has any obligation to contribute to any Employee
Welfare Benefit Plan (as defined in Section 3(1) of ERISA) and does
-28-
<PAGE>
not have any material liability with respect to any Employee Welfare Benefit
Plan, whether or not terminated, which provides medical, health, life insurance
or other welfare-type benefits for current or future retirees or current or
future former employees or their spouses or dependents (other than in accordance
with Section 4980B(f) of the Code or other applicable law).
(c) Multiemployer Plans. Except as set forth on the Employee Benefits
------------------- -----------------
Schedule, with respect to all employees and former employees of the Company, its
- --------
Subsidiaries and their predecessors, neither the Company nor any of its
Subsidiaries has any obligation to contribute to (or any other liability with
respect to) any (i) Multiemployer Plan (as defined in Section 3(37) of ERISA) or
(ii) any plan of the type described in Section 4063 and 4064 of ERISA or Section
413(c) of the Code. Except as set forth on the Employee Benefits Schedule,
--------------------------
neither the Company nor any of its Subsidiaries has incurred any current or
potential withdrawal liability as a result of a complete or partial withdrawal
(or potential partial withdrawal) from any Multiemployer Plan and no condition
exists that presents a risk to the Company or any of its Subsidiaries of
incurring such a liability.
(d) Other Benefit Plans. Except as set forth on the Employee
------------------- --------
Benefits Schedule, neither the Company nor any of its Subsidiaries maintains,
- --------
contributes to or has any material liability under (or with respect to) any
deferred compensation, severance or retirement plans or arrangements, employee
welfare, fringe benefit, vacation, incentive or bonus plan, program, policy or
other arrangement for employees or former employees of the Company, its
Subsidiaries and their predecessors, their spouses or dependents, whether or not
terminated, other than discretionary bonuses and increases in compensation in
the ordinary course of business, consistent with past practice.
(e) Administration and Compliance of the Plans. The plans, programs,
------------------------------------------
policies and other arrangements set forth on the Employee Benefits Schedule are
--------------------------
hereinafter referred to collectively as the "Plans." Except as set forth on the
-----
Employee Benefits Schedule, with respect to each of the Plans:
- --------------------------
(i) all required or discretionary (in accordance with
historical practices) payments, premiums, contributions, reimbursements or
accruals for all periods ending prior to or as of the Closing Date shall
have been or will be made or properly accrued on the Latest Balance Sheet
and the Closing Balance Sheet in accordance with GAAP;
(ii) there is no unfunded liability which is not reflected on
the Latest Balance Sheet or which will not be reflected on the Closing
Balance Sheet;
(iii) to the knowledge of the Company, (A) there have been no
violations of ERISA or the Code with respect thereto (including, without
limitation, any Prohibited Transactions (as defined in ERISA)); (B) the
Company or its Subsidiaries has materially performed all obligations
required to be performed by it under each such Plan; (C) no Fiduciary (as
defined in Section 3(21) of ERISA) has any liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets thereof; (D) no action, suit,
proceeding, hearing or investigation with respect to the administration or
the investment of the assets thereof (other than routine
-29-
<PAGE>
claims for benefits) is pending or, threatened; and (E) there is no basis
for any such action, suit, proceeding, hearing, or investigation; and
(iv) the Company has provided the Purchasers with a true and
complete copy of each Plan document and the most recent annual report (Form
5500 and attachments including any required financial statements) filed by
the Company and any Subsidiary with respect to each such Plan.
5.20 No Material Adverse Change. Since the Most Recent Fiscal Year
--------------------------
End, there has not been any material adverse change in the business, assets,
liabilities, financial condition, results of operations, labor, customer or
supplier relations of the Company and its Subsidiaries.
5.21 Events Subsequent to Most Recent Fiscal Year End.
------------------------------------------------
(a) Except as expressly contemplated by this Agreement or as set
forth on the attached Subsequent Events Schedule, since January 1, 1998, neither
--------------------------
the Company nor any of its Subsidiaries has:
(i) amended its organizational documents, issued (or agreed to
issue) any notes, bonds or other debt securities or any partnership
interests or other equity securities or any securities convertible,
exchangeable or exercisable into any partnership interests or other equity
securities;
(ii) borrowed any material amount or incurred or become subject
to any material liabilities, except current liabilities incurred in the
ordinary course of business, liabilities under contracts entered into in
the ordinary course of business or debt incurred under facilities existing
prior to January 1, 1998 in an aggregate amount not to exceed $215 million;
(iii) discharged or satisfied any material Lien or paid any
material obligation or liability, other than current liabilities paid in
the ordinary course of business;
(iv) declared or made any material payment or distribution of
cash or other property to its partners or other equity holders with respect
to its partnership interests or other equity securities or purchased or
redeemed any partnership interests or other equity securities (including,
without limitation, any warrants, options or other rights to acquire its
partnership interests or other equity securities);
(v) mortgaged or pledged any material amount of its properties
or assets or subjected them to any material Lien, except Liens for current
property taxes not yet due and payable;
(vi) sold, leased, assigned or transferred any material amount
of its tangible assets, except in the ordinary course of business, or
canceled any material debts or claims;
-30-
<PAGE>
(vii) sold, assigned, transferred or licensed any patents or
patent applications, trademarks, service marks, trade names, internet
domain names, corporate names, copyrights or copyright registrations, trade
secrets or other intangible assets, or disclosed any material proprietary
confidential information to any Person;
(viii) entered into, amended or terminated any material lease,
contract, agreement or commitment, or taken any other action or entered
into any other transaction other than in the ordinary course of business
and in accordance with past custom and practice;
(ix) entered into any material transaction with any Affiliate;
(x) changed any material business practice or manner of
dealing with any customer, supplier, subcontractor or sales representative;
(xi) entered into or modified any employment contract or
collective bargaining agreement, written or oral, or changed the employment
terms for any employee or agent or made or granted any bonus or any wage,
salary or compensation increase to any director, officer, employee or sales
representative, group of employees or consultants or made or granted any
increase in any employee benefit plan or arrangement, or amended or
terminated any existing employee benefit plan or arrangement or adopted any
new employee benefit plan or arrangement, except for normal compensation
increases or bonuses in the ordinary course of business consistent with
past practice or as required by applicable law;
(xii) suffered any extraordinary losses or waived any rights of
material value, whether or not in the ordinary course of business or
consistent with past practice;
(xiii) made capital expenditures or commitments that aggregate
in excess of $50,000;
(xiv) made any loans or advances to, guarantees for the benefit
of, or any investments in, any Persons in excess of $50,000 in the
aggregate;
(xv) made any charitable contributions or pledges in excess of
$50,000 in the aggregate;
(xvi) suffered any damage, destruction or casualty loss
exceeding in the aggregate $50,000 whether or not covered by insurance;
(xvii) taken steps to organize any Subsidiary; or
(xviii) entered into any other material transaction, whether or
not in the ordinary course of business.
(b) Neither the Company, any of its partners (or any such partner's
stockholders or partners) nor any of the Company's Subsidiaries have at any time
made any payments for political
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<PAGE>
contributions in excess of $25,000 in the aggregate in any calendar year or made
any bribes, kickback payments or other illegal payments.
5.22 Environment, Health and Safety Matters. Except as set forth on
--------------------------------------
the Environmental and Safety Permits Schedule attached hereto:
-----------------------------------------
(a) To the knowledge of the Company, each of the Company, its
Subsidiaries, and their respective Affiliates has complied in all material
respects and is in compliance in all material respects with all Environmental,
Health, and Safety Requirements.
(b) Without limiting the generality of the foregoing, to the knowledge
of the Company, each of the Company, its Subsidiaries and their respective
Affiliates has obtained and complied with, and is in compliance with, all
permits, licenses and other authorizations that are required pursuant to
Environmental, Health, and Safety Requirements for the occupation of its
facilities and the operation of its business; a list of all such permits,
licenses and other authorizations is set forth on the attached "Environmental
-------------
and Safety Permits Schedule."
- ---------------------------
(c) Neither the Company, its Subsidiaries, nor their respective
Affiliates has received any written or oral notice, report or other information
regarding any actual or alleged material violation of Environmental, Health, and
Safety Requirements, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to any of them or
its facilities arising under Environmental, Health, and Safety Requirements.
(d) To the knowledge of the Company, none of the following exists at
any property or facility owned or operated by the Company or its Subsidiaries:
(i) underground storage tanks, (ii) asbestos-containing material in any form or
condition, (iii) materials or equipment containing polychlorinated biphenyls, or
(iv) landfills, surface impoundments, or disposal areas.
(e) To the knowledge of the Company, none of the Company, its
Subsidiaries, or their respective predecessors or Affiliates has treated,
stored, disposed of, arranged for or permitted the disposal of, transported,
handled, or released any substance, including, without limitation, any hazardous
substance, or owned or operated any property or facility (and no such property
or facility is contaminated by any such substance) in a manner that has given or
would give rise to liabilities, including any liability for response costs,
corrective action costs, personal injury, property damage, natural resources
damages or attorney fees, pursuant to CERCLA), the Solid Waste Disposal Act, as
amended or any other Environmental, Health, and Safety Requirements.
(f) Neither the Company, its Subsidiaries, nor any of their respective
Affiliates has, either expressly or by operation of law, assumed, undertaken or
otherwise become subject to any material liability, including, without
limitation, any obligation for corrective or remedial action, of any other
Person relating to Environmental, Health, and Safety Requirements.
(g) To the knowledge of the Company, no facts, events or conditions
relating to the past or present facilities, properties or operations of the
Company, its Subsidiaries, or any of their respective predecessors or Affiliates
will prevent, hinder or limit continued compliance with
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<PAGE>
Environmental, Health, and Safety Requirements, give rise to any investigatory,
remedial or corrective obligations pursuant to Environmental, Health, and Safety
Requirements, or give rise to any other liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) pursuant to Environmental, Health, and
Safety Requirements, including, without limitation, any relating to onsite or
offsite releases or threatened releases of hazardous materials, substances or
wastes, personal injury, property damage or natural resources damage.
5.23 Affiliated Transactions. Except as set forth on the attached
-----------------------
Affiliated Transactions Schedule, no officer, director, employee, partner or
- --------------------------------
Affiliate of the Company or any of its Subsidiaries or any individual related by
blood, marriage or adoption to any such individual or any entity in which any
such Person or individual owns any beneficial interest, is a party to any
agreement, contract, commitment or transaction with the Company or any of its
Subsidiaries (other than at-will employment arrangements) or has any material
interest in any material property used by the Company or any of its
Subsidiaries.
5.24 Names and Locations. Except as set forth on the attached
-------------------
Names and Locations Schedule," during the five-year period prior to the
- ----------------------------
execution and delivery of this Agreement, neither the Company nor any of its
Subsidiaries has used any name or names under which it has invoiced account
debtors, maintained records concerning its assets or otherwise conducted
business.
5.25 Suppliers and Customers. The Suppliers and Customers Schedule
----------------------- ------------------------------------
attached hereto accurately sets forth a list of the top ten customers and
suppliers of the Company and its Subsidiaries by dollar volume of sales and
purchases, respectively, for each of the fiscal years ended December 31, 1997
and December 31, 1996. The Company has not received, to its knowledge any
written notice from any material supplier to the effect that, and the Company
has no reason to believe that, such supplier will stop, decrease the rate of, or
change the terms (whether related to payment, price or otherwise) with respect
to, supplying materials, products or services to the Company or any of its
Subsidiaries (whether as a result of the consummation of the transactions
contemplated hereby or otherwise). To the knowledge of the Company, the Company
has not received any written notice from any customer of the Company or any of
its Subsidiaries to the effect that, and the Company has no reason to believe
that, such customer will stop, or materially decrease the rate of, leasing
equipment or purchasing services of the Company or any of its Subsidiaries
(whether as a result of the consummation of the transactions contemplated hereby
or otherwise).
5.26 Company Transactions. Neither the Company nor any of its
--------------------
Subsidiaries is a party to or bound by any agreement with respect to a Company
Transaction other than this Agreement, and the Company has terminated all
discussions with third parties regarding a Company Transaction.
5.27 Disclosure. Neither this Agreement nor any of the exhibits,
----------
schedules, or certificates supplied to any Purchaser by or on behalf of the
Company with respect to the transactions contemplated hereby contain any untrue
statement of a material fact or omit a material fact necessary to make each
statement contained herein or therein not misleading. To the knowledge of the
Company, there is no fact which the Company has not disclosed to the Purchasers
in this
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<PAGE>
Agreement and the Schedules hereto and of which any of its officers,
directors or executive employees is aware and which has had or would reasonably
be expected to have a Material Adverse Effect.
5.28 Closing Date. The representations and warranties contained in
------------
this Section 5, will be true and correct on the Closing Date as though then
made, except for written disclosures made by the Current Owner Representative,
on behalf of the Current Owners, to the Purchasers after the date hereof.
5.29 Disclaimer of Other Representations and Warranties. Except as
--------------------------------------------------
expressly set forth in this Section 5 or elsewhere in this Agreement, the
Company makes no representation or warranty, express or implied, at law or in
equity, with respect to the Company, its Subsidiaries or any of their respective
assets, liabilities or operations, including, without limitation, with respect
to merchantability or fitness for a particular purpose, and any such other
representations or warranties are hereby expressly disclaimed. The Purchasers
hereby acknowledge and agree that, except to the extent specifically set forth
in Section 5, 6 or elsewhere in this Agreement the Purchasers are purchasing the
Common Units on an "as is, where is" basis.
Section 6. Representations and Warranties of the Current Owners. As
----------------------------------------------------
a material inducement to the Purchasers to enter into this Agreement and
purchase the Common Units hereunder, each Current Owner, hereby represents and
warrants that with respect to itself and not with respect to any other Current
Owner:
6.01 Power and Authority. Each Current Owner possesses all requisite
-------------------
power and authority necessary to carry out the transactions contemplated by this
Agreement.
6.02 Execution; No Breach. This Agreement has been executed and
--------------------
delivered by each Current Owner. This Agreement and all other agreements
contemplated hereby to which any Current Owner is a party each constitutes a
valid and binding obligation of such Current Owner, enforceable in accordance
with its terms. The execution and delivery by each Current Owner of this
Agreement and all other agreements contemplated hereby to which such Current
Owner is a party and the fulfillment of and compliance with the respective terms
hereof and thereof by any Current Owner (as the case may be) will not, upon
Closing, (a) conflict with or result in a breach of the terms, conditions or
provisions of, (b) constitute a default under, (c) result in the creation of any
Lien upon such Current Owner's partnership interest in the Company pursuant to,
(d) give any third party the right to modify, terminate or accelerate any
obligation under, (e) result in a violation of, or (f) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental body
or agency pursuant to any law, statute, rule or regulation to which such Current
Owner is subject, or any agreement, instrument, order, judgment or decree to
which such Current Owner is subject.
6.03 Title to Partnership Interest. Each Current Owner owns
-----------------------------
beneficially and of record and has good and marketable title to the partnership
interest of the Company as set forth opposite such Current Owner's name on the
Capitalization Schedule. After the Closing, AIM will own beneficially and have
- -----------------------
good and marketable title, free and clear of all Liens, to all of the Class
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<PAGE>
A Preferred Units, 17.82% of the Common Units of Holdings and 18% of the
membership interests of ACR Mgmt.
6.04 Brokerage. There are no claims for brokerage commissions,
---------
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon any Current Owner.
6.05 Company Transactions. No Current Owner is a party to or bound by
--------------------
any agreement with respect to a Company Transaction other than this Agreement,
and each Current Owner has terminated all discussions with third parties
regarding a Company Transaction.
6.06 Closing Date. The representations and warranties of the Current
------------
Owners contained in this Section 6 and elsewhere in this Agreement and all
information contained in any exhibit, schedule or attachment hereto or in any
certificate or other writing delivered by, or on behalf of, any Current Owner or
the Current Owners to the Purchasers, shall be true and correct in all respects
on the date of the Closing as though then made.
6.07 Disclaimer of Other Representations and Warranties. Except as
--------------------------------------------------
expressly set forth in this Section 6 or elsewhere in this Agreement, the
Current Owners make no representation or warranty, express or implied, at law or
in equity, with respect to the Company, its Subsidiaries or any of their
respective assets, liabilities or operations, including, without limitation,
with respect to merchantability or fitness for a particular purpose, and any
such other representations or warranties are hereby expressly disclaimed. The
Purchasers hereby acknowledge and agree that, except to the extent specifically
set forth in Section 5, 6 or elsewhere in this Agreement the Purchasers are
purchasing the Common Units on an "as is, where is" basis.
Section 7. Representations and Warranties of the Purchasers. As a
------------------------------------------------
material inducement to the Company and the Current Owners to enter into this
Agreement and take the actions set forth in Section 1, each Purchaser, severally
and not jointly, hereby represents and warrants that with respect to itself and
not with respect to any other Purchaser:
7.01 Organization, Power and Authority. Each of Bain/ACR, L.L.C. and
---------------------------------
ACR Mgmt. is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each Purchaser possesses
all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.
7.02 Authorization; No Breach. The execution, delivery and
------------------------
performance of this Agreement and all other agreements contemplated hereby to
which any Purchaser is a party, have been duly authorized by such Purchaser.
This Agreement and all other agreements contemplated hereby to which any
Purchaser is a party each constitutes a valid and binding obligation of such
Purchaser, enforceable in accordance with its terms. The execution and delivery
by each Purchaser of this Agreement and all other agreements contemplated hereby
to which such Purchaser is a party, the purchase of the Common Units hereunder
and compliance with the respective terms hereof and thereof by such Purchaser,
will not, upon Closing, (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) constitute a default under, (c) result in the
creation of any Lien, upon such Purchaser's assets pursuant to, (d) give any
third party the right to modify, terminate or
-35-
<PAGE>
accelerate any obligation under, (e) result in a violation of, or (f) require
any authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental body
or agency pursuant to, the organizational documents of such Purchaser, or any
law, statute, rule or regulation to which such Purchaser is subject, or any
agreement, instrument, order, judgment or decree to which such Purchaser is
subject.
7.03 Brokerage. There are no claims for brokerage commissions,
---------
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon any Purchaser, other than the fees to be paid to Jim Haas, Aloysius
McLaughlin and Dan Haas.
7.04 Closing Date. The representations and warranties of each
------------
Purchaser contained in this Section 7 and elsewhere in this Agreement shall be
true and correct on the date of the Closing as though then made.
7.05 Disclaimer of Other Representations and Warranties. Except as
--------------------------------------------------
expressly set forth in this Section 7 or elsewhere in this Agreement, the
Purchasers make no representations or warranties, expressed or implied, at law
or in equity, with respect to themselves or the transactions contemplated
hereby.
Section 8. Additional Agreements.
---------------------
8.01 Indemnification.
---------------
(a) Survival of Representations and Warranties. Subject to the
------------------------------------------
limitations contained in this Section 8, all representations, warranties
covenants and agreements contained herein or made in writing by any Party in
connection herewith shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby, regardless of any
investigation made by any Party or on its behalf, the knowledge of any such
Party's, officers, directors, partners, members, employees or agents, or the
acceptance of any certificate or opinion.
(b) Indemnification of the Purchasers by the Current Owners.
-------------------------------------------------------
(i) Obligation. The Current Owners agree to indemnify the
----------
Company and hold the Company harmless against any loss, liability,
deficiency, damage or expense (including reasonable legal expenses and
costs and including interest and penalties) (a "Loss") which the Company
----
may suffer, sustain or become subject to, as a result of, arising out of,
relating to or in connection with (1) the breach by the Company of any
representation, warranty, covenant or agreement made by the Company in this
Agreement or in any certificate delivered in connection with this Agreement
(disregarding any materiality, knowledge or Material Adverse Effect
qualifications with respect to any such representation, warranty, covenant
or agreement, except in instances when knowledge relates to "threatened"
matters), (2) any claims of any brokers or finders claiming by, through or
under the Company with respect to the transactions contemplated hereby,
(3) the matters set forth on the Indemnification Schedule attached hereto.
------------------------
Except as provided in the next sentence,
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<PAGE>
a Loss shall be satisfied by a contribution by the Current Owners to the
Company. The Current Owners agree to indemnify the Purchasers and their
respective members, officers or directors (a "Purchaser Indemnitee") and
--------------------
hold each Purchaser Indemnitee harmless against any Loss which such
Purchaser Indemnitee may suffer, sustain or become subject to, as a result
of, arising out of, relating to or in connection with the breach by the
Company of the representations and warranties in Section 5.02
(Authorization) and Section 5.03 (Capitalization and Related Matters). Any
such Loss suffered by a Purchaser Indemnitee pursuant to this paragraph
8.01(b)(i) shall be satisfied by a payment by the Current Owners to such
Purchaser Indemnitee in an amount equal to such Loss.
(ii) Survival Date. The Current Owners will not be liable with
-------------
respect to any claim for the breach or inaccuracy of any representation or
warranty contained in Section 5 (except for Sections 5.02 (Authorization),
5.03 (Capitalization and Related Matters), 5.05 (Brokerage), 5.06
(Subsidiaries and Investments) and 5.26 (Company Transactions)), or any
claim for the breach of any other Company representation, warranty, pre-
closing covenant or pre-closing agreement contained herein, unless written
notice of a possible claim for indemnification with respect to such breach
is given by the Company or a Purchaser Indemnitee to the Current Owners on
or before (1) the expiration of the applicable statute of limitations with
respect to claims arising under Sections 5.15 (Tax Matters), and 5.21(b)
(Events Subsequent to Most Recent Fiscal Year End), (2) the fifth
anniversary of the Closing Date with respect to claims under Sections 5.11
(Title to Personal Property) and 5.12 (Title to Real Property) (3) the
fourth anniversary of the Closing Date with respect to claims under Section
5.22 (Environmental, Health and Safety Matters), (4) the third anniversary
of the Closing Date with respect to claims under Section 5.09 (Legal
Compliance) or (5) the first anniversary of the Closing Date with respect
to all other claims arising under Section 5 or any claim for the breach of
any other Company representation, warranty, pre-closing covenant or pre-
closing agreement contained herein (each date under clauses (1), (2) and
(3), a "Survival Date"), it being understood that so long as such written
-------------
notice is given on or prior to the Survival Date with respect to such
claim, the representations and warranties with respect to such breach shall
continue to survive until such matter is resolved. Any breach of any post-
closing covenant or agreement of a Current Owner contained in this
Agreement, will not be subject to any time limitations.
(iii) Limitations. With respect to any claim for the breach of
-----------
any representation or warranty contained in Section 5 (other than Sections
5.02 (Authorization), 5.03 (Capitalization and Related Matters), 5.05
(Brokerage), 5.06 (Subsidiaries and Investments), Section 5.21(b) (Events
Subsequent to Most Recent Fiscal Year End) and 5.26 (Company Transactions))
or any claim for the breach of any other Company representation, warranty,
pre-closing covenant or pre-closing agreement contained herein, the Current
Owners shall not have any obligation to indemnify the Company or any
Purchaser Indemnitee from and against any Losses by reason of any such
breach (or alleged breach) until the Company and the Purchaser Indemnitees
collectively shall have suffered Losses by reason of all such breaches (or
alleged breaches) (1) in excess of $1,600,000 (and then such Losses shall
only include such excess) (the "Deductible") and (2) thereafter the Current
----------
Owners shall not have any obligation to indemnify the Company and the
Purchaser Indemnitees for an aggregate amount in excess of $16,000,000 (the
"Cap"). Any breach of
---
-37-
<PAGE>
any covenant or agreement contained herein, including, without limitation,
any breach of any covenant or agreement contained in this Section 8, will
not be subject to the Deductible or the Cap. Notwithstanding anything to
the contrary contained in this Section 8, with respect to any claim for
breaches of any representation or warranty contained in Section 5 the
Company shall not be entitled to make a claim for indemnification against
the Current Owners if the Losses the Company may suffer, sustain or become
subject to, or a result of a particular breach are less than $1,000 (the
"Mini-Basket"); provided that (1) if the Losses related to such claim
----------- --------
equals or exceeds the Mini-Basket, the Company shall be entitled to make a
claim for indemnification with respect to such particular breach for the
entire amount of the Losses related thereto, subject to the Deductible and
the Cap and (2) for purposes of this provision, any claim or series of
related claims arising out of or relating to the same or related facts,
circumstances, occurrences, transactions or conditions shall constitute one
claim with respect to any particular breach.
(c) Indemnification of the Company by the Current Owners. The Current
----------------------------------------------------
Owners agree to indemnify the Company and hold the Company harmless against any
Loss which the Company may suffer, sustain or become subject to, as a result of,
arising out of relating to or in connection with (a) the breach by any Current
Owner of any representation, warranty, covenant or agreement made by the Current
Owners in this Agreement or (b) any claims of any brokers or finders claiming
by, through or under the Current Owners.
(d) Indemnification of the Company by the Purchasers. Each Purchaser
------------------------------------------------
agrees to indemnify the Company and hold the Company harmless against any Loss
which the Company may suffer, sustain or become subject to, as the result of,
arising out of, relating to or in connection with (a) the breach by any
Purchaser of any representation, warranty, covenant or agreement made by such
Purchaser contained in this Agreement or (b) any claims of any brokers or
finders claiming by, through or under any Purchaser.
(e) Defense of Claims. If a party hereto seeks indemnification under
-----------------
this Section 8.01, such party (the "Indemnified Party") shall give written
-----------------
notice to the other party (the "Indemnifying Party") after receiving written
------------------
notice of any action, lawsuit, proceeding, investigation or other claim against
it (if by a third party) or discovering the liability, obligation or facts
giving rise to such claim for indemnification, describing the claim, the amount
thereof (if known and quantifiable), and the basis thereof; provided that the
--------
failure to so notify the Indemnifying Party shall not relieve the Indemnifying
Party of its or his obligations hereunder except to the extent such failure
shall have prejudiced the Indemnifying Party. In that regard, if any action,
lawsuit, proceeding, investigation or other claim shall be brought or asserted
by any third party which, if adversely determined, would entitle the Indemnified
Party to indemnity pursuant to this Section 8.01, the Indemnified Party shall
promptly notify the Indemnifying Party of the same in writing, specifying in
detail the basis of such claim and the facts pertaining thereto and the
Indemnifying Party shall be entitled to participate in the defense of such
action, lawsuit, proceeding, investigation or other claim giving rise to the
Indemnified Party's claim for indemnification at its expense, and at its option
(subject to the limitations set forth below) shall be entitled to appoint lead
counsel of such defense with reputable counsel reasonably acceptable to the
Indemnified Party; provided that, as a condition precedent to the Indemnifying
--------
Party's right to assume control of such defense, it must first:
-38-
<PAGE>
(i) enter into an agreement with the Indemnified Party (in form
and substance reasonably satisfactory to the Indemnified Party) pursuant to
which the Indemnifying Party agrees to be fully responsible for all Losses
relating to such claims and that it will provide full indemnification to
the Indemnified Party for all Losses relating to such claim; and
(ii) furnish the Indemnified Party with reasonable evidence that
the Indemnifying Party is and will be able to satisfy any such liability;
and provided further that the Indemnifying Party shall not have the right to
-------- -------
assume control of such defense and shall pay the fees and expenses of counsel
retained by the Indemnified Party, if the claim which the Indemnifying Party
seeks to assume control (A) seeks non-monetary relief, (B) involves criminal or
quasi-criminal allegations, (C) involves a claim to which the Indemnified Party
reasonably believes an adverse determination would be detrimental to or injure
the Indemnified Party's reputation or future business prospects, or (D) involves
a claim which, upon petition by the Indemnified Party, the appropriate court
rules that the Indemnifying Party failed or is failing to vigorously prosecute
or defend.
If the Indemnifying Party is permitted to assume and control the
defense and elects to do so, the Indemnified Party shall have the right to
employ counsel separate from counsel employed by the Indemnifying Party in any
such action and to participate in the defense thereof, but the fees and expenses
of such counsel employed by the Indemnified Party shall be at the expense of the
Indemnified Party unless (a) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, or (b) the Indemnified Party
has been advised through a written opinion of counsel (a copy of which must be
furnished to the Indemnifying Party) that a reasonable likelihood exists of a
conflict of interest between the Indemnifying Party and the Indemnified Party.
If the Indemnifying Party shall control the defense of any such claim,
the Indemnifying Party shall obtain the prior written consent of the Indemnified
Party (which shall not be unreasonably withheld) before entering into any
settlement of a claim or ceasing to defend such claim, if pursuant to or as a
result of such settlement or cessation, injunction or other equitable relief
will be imposed against the Indemnified Party or if such settlement does not
expressly unconditionally release the Indemnified Party from all liabilities and
obligations with respect to such claim, without prejudice.
(f) Payments. Any indemnification pursuant to this Section 8.01 shall
--------
be effected by wire transfer of immediately available funds from one or more of
the Current Owners or the Purchasers, as the case may be, to an account
designated by the Company or the Current Owner Representative, as the case may
be, within three (3) days after the determination thereof, whether pursuant to a
Final Determination (as defined in Section 8.02 below), settlement or agreement
among the parties. Any such indemnification payments shall include interest at
the lesser of (i) 8.00% and (ii) the maximum rate permitted by applicable usury
laws, from the date any such Loss is suffered or sustained to the date of
payment. Interest on such unpaid amount shall be compounded monthly, computed
on the basis of a 365-day year and shall be payable on demand. Any amounts
owing from the Current Owners pursuant to this Section 8.01 shall be made, at
the option of the Company, by set off against the Class A Preferred Units issued
to the Current Owners or any entity
-39-
<PAGE>
controlled by the Current Owners (based on the cost of such Units plus all
----
accrued and unpaid yield thereon) or against any amounts the Current Owners or
their partners or stockholders owe the Company and/or in cash directly by the
Current Owners in accordance with the terms of this Section 8.01(f). All
indemnification payments to or for the benefit of the Company under this Section
8 shall be deemed adjustments to the Distribution Amount and all indemnification
payments for the benefit of any Purchaser under this Section 8 shall be deemed
to be adjustments to the Purchase Price.
(g) Other Indemnification Provisions. Effective upon the Closing,
--------------------------------
each Current Owner and the owners of its equity securities hereby irrevocably
waives, releases and discharges the Company from any and all liabilities and
obligations to it or its stockholders, partners or other Owners of its equity
securities of any kind or nature whatsoever, whether in its capacity as a
Current Owner hereunder, as a partner, officer or director of the Company or
otherwise (including, without limitation, in respect of rights of contribution
or indemnification other than accrued salary and benefits as an employee of the
Company), in each case whether absolute or contingent, liquidated or
unliquidated, and whether arising hereunder or under any other agreement or
understanding or otherwise at law or equity, and neither such Current Owner nor
the owners of its equity securities shall seek to recover any amounts in
connection therewith or thereunder from the Company. In no event shall the
Company or its Subsidiaries have any liability whatsoever for any breaches of
the representations, warranties, agreements or covenants of the Company, and
neither any Current Owner nor the owners of its equity securities shall seek
contribution from the Company or any Subsidiary for any such breaches or in
respect of any other payments required to be made by the Current Owners pursuant
to this Agreement. Notwithstanding the foregoing in this Section 8.01(g), after
the Closing the Company shall indemnify the Current Owners against any Loss
which the Current Owners may suffer, sustain or become subject to, as a result
of, arising out of, relating to or in connection with, a liability of the
Company and as a result of such Current Owner being a general or limited partner
of the Company, but only to the extent such Loss or liability does not result
from a breach by the Company of any representation, warranty, covenant or
agreement contained in this Agreement, regardless of the survival period of such
representation, warranty, covenant or agreement.
(h) Taxes, Insurance and Reserves. Any Loss for which an Indemnified
-----------------------------
Party claims indemnification under this Section 8.01 shall take into account (i)
the proceeds of any insurance actually received by the Company with respect to
such Loss (the "Insurance Recovery Amount") and (ii) the amount of any reduction
-------------------------
in Tax that (A) is actually realized by a reduction in Taxes actually paid or by
a refund actually received by the Indemnified Party or any Affiliate and (B) is
attributable to any deduction, loss, credit or other tax benefit resulting from
or arising out of such Loss (or Tax paid by the Current Owner) (the "Tax
---
Reduction Amount"), and (iii) any specific reserves against such Losses, but
- ----------------
only to the extent of such specific reserves set forth on the Closing Balance
Sheet and reflected in Consolidated Net Worth. Any indemnification payment
under this Section 8.01(h) shall initially be made without regard to this
Section 8.01(h) (other than with respect to clause (iii) in the preceding
sentence which will be taken into account at the time the indemnification
payment is made) and the Indemnified Party shall remit to the Indemnifying Party
the Tax Reduction Amount or the Insurance Recovery Amount, as the case may be,
when the Indemnified Party actually realizes the Tax Reduction Amount or
actually receives the Insurance Recovery Amount. The Current Owners shall hold
the Company and the Subsidiaries harmless
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against any subsequent challenge to the Tax Reduction Amount or Insurance
Recovery Amount. The amount of a Loss for purposes of the Mini-Basket,
Deductible and Cap hereunder shall be finally determined after taking into
account the net effect of the provisions of this Section 8.01(h).
(i) Exclusive Remedy. The Purchasers and the Company acknowledge
----------------
and agree that the indemnification provisions contained in this Section 8.01
shall be the exclusive remedy of the Purchasers and the Company with respect to
money damages for any breach or noncompliance with the provisions of this
Agreement or any agreement, certificate, instrument or document delivered in
connection herewith.
(j) Certain Tax Matters. Other than sales and use Taxes
-------------------
(indemnification for which is addressed on the Indemnification Schedule), and
------------------------
subject to the Mini-Basket, Deductible and Cap, from and after the Closing Date,
the Current Owners agree to indemnify the Company against all Taxes imposed on
the Company or its Subsidiaries with respect to any Tax period or portion
thereof that ends on or before the Closing Date; provided that the Current
--------
Owners shall be liable only to the extent that such Taxes are in excess of the
amount reserved for as a current liability for Taxes on the Closing Balance
Sheet. For purposes of this Section 8.01(j), in the case of any Taxes that are
imposed on a periodic basis and are payable for a Tax period that includes (but
does not end on) the Closing Date, the portion of such Tax which relates to the
portion of such Tax period ending on the Closing Date shall (i) in the case of
any Taxes (other than Taxes based upon or related to income or receipts) be
deemed to be the amount of such Tax for the entire Tax period multiplied by a
fraction the numerator of which is the number of days in the Tax period ending
on the Closing Date and the denominator of which is the number of days in the
entire Tax period, and (y) in the case of any Tax based upon or related to
income or receipts be deemed equal to the amount which would be payable if the
relevant Tax period ended on the Closing Date. Any credits relating to a Tax
period that begins before and ends after the Closing Date shall be taken into
account as though the relevant Tax period ended on the Closing Date. All
determinations necessary to give effect to the foregoing allocations shall be
made in a manner consistent with prior practice of the Company and its
Subsidiaries.
(k) For purposes of this Section 8.01 hereof, the term "Current
-------
Owners" shall also include RA.
- ------
8.02 Dispute Settlement.
------------------
(a) Each Party agrees that the arbitration procedure set forth
below shall be the sole and exclusive method for resolving and remedying claims
for money damages arising out of the provisions of Section 8.01 (the
"Disputes"); provided that, nothing in this Section 8.02 shall prohibit a Party
-------- --------
from instituting litigation to enforce any Final Determination (as defined
below). The Parties hereby acknowledge and agree that, except as otherwise
provided in subparagraph (f) below or in the Commercial Arbitration Rules of the
- --------
American Arbitration Association as in effect from time to time, the arbitration
procedures and any Final Determination hereunder shall be governed by, and shall
be enforced pursuant to the Pennsylvania Arbitration Act.
(b) In the event that any Party asserts that there exists a
Dispute, such Party shall deliver a written notice to each other Party involved
therein specifying the nature of the asserted
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Dispute and requesting a meeting to attempt to resolve the same. If no such
resolution is reached within ten business days after such delivery of such
notice, the Party delivering such notice of Dispute (the "Disputing Party") may,
---------------
within 45 business days after delivery of such notice, commence arbitration
hereunder by delivering to each other Party involved therein a notice of
arbitration (a "Notice of Arbitration"). Such Notice of Arbitration shall
---------------------
specify the matters as to which arbitration is sought, the nature of any
Dispute, the claims of each Party to the arbitration and shall specify the
amount and nature of any damages, if any, sought to be recovered as a result of
any alleged claim, and any other matters required by the Commercial Arbitration
Rules of the American Arbitration Association as in effect from time to time to
be included therein, if any.
(c) The Disputing Party, on the one hand, and the other Parties
involved therein, on the other hand, each shall select one non-neutral
arbitrator expert in the subject matter of the Dispute (the arbitrators so
selected shall be referred to herein as the "Disputing Party's Arbitrator" and
----------------------------
the "Non-Disputing Party's Arbitrator," respectively). In the event that either
--------------------------------
Party fails to select an arbitrator as set forth herein within 20 days from the
delivery of a Notice of Arbitration, then the matter shall be resolved by the
arbitrator selected by the other party. The Disputing Party's Arbitrator and
the Non-Disputing Party's Arbitrator shall select a third independent, neutral
arbitrator expert in the subject matter of the dispute, and the three
arbitrators so selected shall resolve the matter according to the procedures set
forth in this Section 8.02. If the Disputing Party's Arbitrator and the Non-
Disputing Party's Arbitrator are unable to agree on a third arbitrator within 20
days after their selection, the Disputing Party's Arbitrator and the Non-
Disputing Party's Arbitrator shall each prepare a list of three independent
arbitrators. The Disputing Party's Arbitrator and the Non-Disputing Party's
Arbitrator shall each have the opportunity to designate as objectionable and
eliminate one arbitrator from the other arbitrator's list within seven days
after submission thereof, and the third arbitrator shall then be selected by lot
from the arbitrators remaining on the lists submitted by the Disputing Party's
Arbitrator and the Non-Disputing Party's Arbitrator.
(d) The arbitrators selected pursuant to subparagraph (c) above will
determine the allocation of the costs and expenses of arbitration based upon the
percentage which the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party. For example, if the
Disputing Party submits a claim for $1,000 and if the other Parties involved in
the Dispute contest only $500 of the amount claimed by the Disputing Party, and
if the arbitrators ultimately resolve the dispute by awarding the Disputing
Party $300 of the $500 contested, then the costs and expenses of arbitration
will be allocated 40% (i.e., 200 / 500) to the Disputing Party and 60% (i.e.,
300 / 500) to the other Parties involved in the Dispute.
(e) The arbitration shall be conducted in Pittsburgh, Pennsylvania
under the Commercial Arbitration Rules of the American Arbitration Association
as in effect from time to time, except as modified by the agreement of the
Parties. The arbitrators shall conduct the arbitration so that a final result,
determination, finding, judgment and/or award (the "Final Determination") is
-------------------
made or rendered as soon as practicable, but in no event later than the earlier
to occur of (i) the date which is 90 business days after the delivery of the
Notice of Arbitration and (ii) the date which is 10 days after the completion of
the arbitration. The Final Determination must be agreed upon and signed by the
sole arbitrator or by at least two of the three arbitrators (as the case may
be). The Final Determination shall be final and binding on all Parties and
there shall be no
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appeal from or reexamination of the Final Determination, except for fraud,
perjury, evident partiality or misconduct by an arbitrator prejudicing the
rights of any Party and to correct manifest clerical errors.
(f) A Party may enforce any Final Determination in any state or
federal court located in Pittsburgh, Pennsylvania. For the purpose of any action
or proceeding instituted with respect to any Final Determination, each Party
hereby irrevocably submits to the jurisdiction of such courts, irrevocably
consents to the service of process by registered mail or personal service and
hereby irrevocably waives, to the fullest extent permitted by law, any objection
which it may have or hereafter have as to personal jurisdiction, the laying of
the venue of any such action or proceeding brought in any such court and any
claim that any such action or proceeding brought in any court has been brought
in an inconvenient forum.
8.03 Noncompete and Nonsolicitation. As an inducement to the
------------------------------
Purchasers to enter into this Agreement and consummate the transactions
contemplated hereby, each of the Current Owners agrees as follows:
(a) the Current Owners acknowledge and agree that they will be the
direct and/or indirect beneficiaries of the Distribution Amount to be paid to
the Current Owners hereunder and that in the course of their several years of
management of and employment with the Company that they have become familiar
with the trade secrets and other confidential information of the Company and its
Subsidiaries and that their services have been special, unique and extraordinary
value to the Company and its Subsidiaries. Therefore, in further consideration
of the Distribution Amount, during the period from the Closing Date to and
including the fifth anniversary of the Closing Date (the "Noncompete Period"),
-----------------
the Current Owners shall not have any affiliation (as defined below) with any
Person, anywhere in the world which engages in the business of providing crane
and other lifting equipment rentals (a "Competitive Entity"); provided that
------------------ --------
nothing contained herein shall be construed to prohibit any Current Owner from
purchasing (i) securities of the Company or (ii) up to an aggregate of 2% of any
class of the outstanding voting securities of any Person whose securities are
listed on a national securities exchange or traded in the NASDAQ national market
system (a "Public Company") (including, for purposes of calculating the
--------------
percentage of such securities which may be purchased by any Current Owner, the
securities of such Public Company then owned by all Affiliates of such Current
Owner to the extent such Persons are acting in concert or otherwise constitute a
"group" for purposes of Section 13(d)(3) of the Securities Exchange Act of
1934), if the Current Owner does not have an active role in the management of
such Public Company, (it being understood that the exercise of voting rights
with respect to any such voting securities, in and of itself, shall not
constitute such a role). For purposes of this Section 8.03, the term
"affiliation" shall mean any direct or indirect interest in a Person, whether as
- ------------
an officer, director, employee, investor, partner, stockholder, sole proprietor,
trustee, consultant, agent, representative, broker, promoter or otherwise; and
(b) during the Noncompete Period, each Current Owner shall not, and
shall not permit any of its or his Affiliates to (i) induce or attempt to induce
any employee of the Company or its Subsidiaries to leave the employ of such
Company or its Subsidiaries, (ii) hire directly or through an Affiliate any
person who is or was an employee of the Company or its Subsidiaries within the
six-month period prior to the date of hire, other than persons who were
involuntarily
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<PAGE>
terminated by the Company, or (iii) call on, service or solicit any customer,
supplier, lessee or other business relation of the Company or its Subsidiaries
on behalf of a Competitive Entity or in any way interfere with the relationship
between any such customer, supplier, lessee or business relation of the Company
or its Subsidiaries.
Notwithstanding anything in this Section 8.03 to the contrary, if at any time,
in any judicial proceeding, any of the restrictions stated in this Section 8.03
are found by a final order of a court of competent jurisdiction to be
unreasonable or otherwise unenforceable under circumstances then existing, each
Current Owner agrees that the period, scope or geographical area, as the case
may be, shall be reduced to the extent necessary to enable the court to enforce
the restrictions to the extent such provisions are allowable under law, giving
effect to the agreement and intent of the parties that the restrictions
contained herein shall be effective to the fullest extent permissible. Each of
the Current Owners acknowledges and agrees that money damages may not be an
adequate remedy for any breach or threatened breach of the provisions of Section
8.03(a) or Section 8.03(b) and that, in such event, the Company or its
successors or assigns may, in addition to any other rights and remedies existing
in their favor, apply to any court of competent jurisdiction for specific
performance, injunctive and/or other relief in order to enforce or prevent any
violations of the provisions of this Section 8.03 (including the extension of
the Noncompete Period applicable to such Current Owner by a period equal to the
length of court proceedings necessary to stop such violation); provided that
--------
such Current Owner is found to have been in violation of the provisions of this
Section 8.03. Any injunction shall be available without the posting of any bond
or other security. In the event of an alleged breach or violation by any Current
Owner of any of the provisions of this Section 8.03, the Noncompete Period will
be tolled for it or him until such alleged breach or violation is resolved;
provided that if it or he is found to have not violated the provisions of this
- --------
Section 8.03, then the Noncompete Period will not be deemed to have been tolled.
Each of the Current Owners agrees that the restrictions contained in Section
8.03 are reasonable in all respects.
(c) For purposes of this Section 8.03, the term "Current Owners"
--------------
shall also include RA .
8.04 Powers of Attorney. Each of the Current Owners irrevocably
------------------
constitutes and appoints William B. Kania (the "Current Owner Representative")
----------------------------
as such Person's true and lawful attorney-in-fact and agent and authorizes him
acting for such Person and in such Person's name, place and stead, in any and
all capacities to do and perform every act and thing required or permitted to be
done in connection with the transactions contemplated by this Agreement, the
Escrow Agreement and all of the other documents and agreements (collectively,
the "Transaction Documents") contemplated hereby, as fully to all intents and
---------------------
purposes as such Person might or could do in person, including, without
limitation:
(a) execute and deliver any and all of this Agreement or the
agreements, documents or instruments contemplated hereby;
(b) execute and deliver such amendments, modifications, alterations
and waivers to this Agreement or the agreements, documents or instruments
contemplated hereby from time to time as the Current Owner Representative deems
necessary or advisable;
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<PAGE>
(c) designate accounts for payment of the Distribution Amount, and
any other amounts owed to the Current Owners pursuant to this Agreement or the
agreements, documents or instruments contemplated hereby;
(d) determine the Consolidated Net Worth and the Distribution
Amount;
(e) agree or disagree with the determination of Consolidated Net
Worth and the Distribution Amount;
(f) reach agreement with the Purchasers with respect to Consolidated
Net Worth and the Distribution Amount or select an Auditor to make a
determination thereof;
(g) deliver and receive opinions, certificates and other documents
required at or in connection with this Agreement or the agreements, documents or
instruments contemplated hereby or the transactions contemplated hereby or
thereby, and to agree to waivers or modifications of any such opinions,
certificates or other documents;
(h) determine the presence (or absence) of claims for
indemnification against the Purchasers pursuant to Section 8.01 above;
(i) deliver all notices required to be delivered by such Person
under this Agreement, including, without limitation, any notice of a claim, for
which indemnification is sought under Section 8.01 above, any notice of a third
party claim under Section 8.01 above, and any notice of a dispute under Section
8.02 above;
(j) receive all notices required to be delivered to such Person
under this Agreement, including, without limitation, any notice of a claim for
which indemnification is sought under Section 8.01 above, any notice of a third
party claim under Section 8.01 above, and any notice of a dispute under Section
8.02 above;
(k) take any and all action on behalf of such Person from time to
time as the Current Owner Representative may deem necessary or desirable to
resolve and/or settle claims under this Agreement, including, without
limitation, Section 8.01 above; and
(l) take all action as the Current Owner Representative may deem
necessary or advisable under the Escrow Agreement, including without limitation,
the settlement of all claims against the Escrow Account.
Each of the Current Owners grants unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing necessary or
desirable to be done in connection with the transactions contemplated by this
Agreement and the agreements contemplated hereby, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that the Current Owner Representative may lawfully do or cause to
be done by virtue hereof. Each of the Current Owners acknowledges and agrees
that upon execution and delivery by the Current Owner Representative of this
Agreement and the agreements, documents or instruments contemplated hereby or
any amendments, modifications, alterations or waivers hereof or thereof or
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<PAGE>
any other agreements, opinions, certificates and other documents executed and
delivered by the Current Owner Representative pursuant to this Section 8.04,
such Person shall be bound by such documents as fully as if such Person had
executed and delivered such documents.
8.05 Replacement of the Current Owner Representative. Upon the
-----------------------------------------------
death, disability or incapacity of the initial Current Owner Representative
appointed pursuant to Section 8.04 above, each of the Current Owners
acknowledges and agrees that the Current Owner Representative's executor,
guardian or legal representative, as the case may be, shall appoint a
replacement reasonably believed by such person as capable of carrying out the
duties and performing the obligations of the Current Owner Representative
hereunder within ten (10) days.
8.06 Actions of the Current Owner Representative; Liability of
---------------------------------------------------------
the Current Owner Representative. Each Current Owner agrees that the Purchasers
- --------------------------------
shall be entitled to rely on any action taken by the Current Owner
Representative, on behalf of the Current Owners, pursuant to Section 8.04 above
(each, an "Authorized Action"), and that each Authorized Action shall be binding
-----------------
on each Current Owner as fully as if such Current Owner had taken such
Authorized Action. The Purchasers agree that the Current Owner Representative
shall have no liability to the Purchaser Indemnitees for any Authorized Action,
except to the extent that such Authorized Action is found by a final order of a
court of competent jurisdiction to have constituted fraud or willful misconduct.
The Current Owners jointly and severally agree to pay, and to indemnify and hold
harmless the Purchaser Indemnitees from and against any Losses which they may
suffer, sustain, or become subject to, as the result of any claim by any Person
that an Authorized Action is not binding on, or enforceable against, the Current
Owners.
8.07 Transfer of Restricted Securities.
---------------------------------
(a) Restricted Securities are transferable only pursuant to (i)
public offerings registered under the Securities Act, (ii) Rule 144 or Rule 144A
of the Securities and Exchange Commission (or any similar rule or rules then in
force) if such rule is available and (iii) subject to the conditions specified
in paragraph (b) below, any other legally available means of transfer.
(b) In connection with the transfer of any Restricted Securities
(other than a transfer described in subparagraphs (a)(i) or (a)(ii) above), the
holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, together with an opinion of
Kirkland & Ellis or other counsel which (to the Company's reasonable
satisfaction) is knowledgeable in securities law matters to the effect that such
transfer of Restricted Securities may be effected without registration of such
Restricted Securities under the Securities Act. In addition, if the holder of
the Restricted Securities delivers to the Company an opinion of Kirkland & Ellis
or such other counsel that no subsequent transfer of such Restricted Securities
shall require registration under the Securities Act, the Company shall promptly
upon such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in subparagraph
(e). If the Company is not required to deliver new certificates for such
Restricted Securities not bearing such legend, the holder thereof shall not
transfer the same until the prospective transferee has confirmed to the Company
in writing its agreement to be bound by the conditions contained in this
subparagraph and subparagraph (e).
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<PAGE>
(c) Upon the request of any Purchaser or Current Owner, the Company
shall promptly supply to such Purchaser or Current Owner or its prospective
transferees all information regarding the Company required to be delivered in
connection with a transfer pursuant to Rule 144A of the Securities and Exchange
Commission.
(d) If any Restricted Securities become eligible for sale pursuant
to Rule 144(k), the Company shall, upon the request of the holder of such
Restricted Securities, remove the legend set forth in subparagraph (e) from the
certificates for such Restricted Securities.
(e) Each certificate or instrument representing Restricted
Securities shall be imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
JULY __, 1998 AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE AMENDED AND
RESTATED RECAPITALIZATION AGREEMENT, DATED AS OF JULY __, 1998, AS AMENDED
AND MODIFIED FROM TIME TO TIME, BY AND AMONG THE ISSUER (THE "COMPANY") AND
CERTAIN INVESTORS, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE
TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH
RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY
THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE."
8.08 Terminated Employees. Promptly after the Closing the Parties
--------------------
will work together and take all necessary action to cause the Company to
terminate certain employees, which employees will in the aggregate have
compensation of equal to or greater than $400,000 on an annual basis.
8.09 Collection of Employee Loans. After the Closing, as and
----------------------------
when the Company receives any payments on any of the employee loans excluded
from the determination of Consolidated Net Worth, the Company shall promptly
remit such payments to AIM.
Section 9. Definitions.
-----------
9.01 For the purposes of this Agreement, the following terms have the
meanings set forth below:
"Affiliate" means, in the case of a natural Person, one or more
---------
members of a group comprised of such Person and such Person's parents or
grandparents, his children or grandchildren, his siblings and any spouse of any
of the foregoing. In the case of a corporation or other Person which is not a
natural Person, the term "Affiliate" means a Subsidiary or other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes
hereof, "control" means the power to vote or direct the
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voting of sufficient securities or other interests to elect a majority of the
directors or to control the management of a Person.
"Bain" means Bain Capital, Inc., a Delaware corporation.
----
"Bain/ACR, L.L.C." means Bain/ACR, L.L.C., a Delaware limited
----------------
liability company.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
------
and Liability Act of 1980, as amended.
"Class A Common Units" means Holdings' Class A Common Units having the
--------------------
rights and preferences set forth in Exhibit B-1.
-----------
"Class A Preferred Units" means Holdings' Class A Preferred Units
-----------------------
having the rights and preferences set forth in Exhibit B-1.
-----------
"Class L Common Units" means Holdings' Class L Common Units having the
--------------------
rights and preferences set forth in Exhibit B-1.
-----------
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
"Commitment Letters" means the draft commitment letter issued by
------------------
Goldman Sachs Credit Partners LP, DLJ Capital Funding, Inc. and GE Capital
Corporation and the draft highly confident letter issued by Donaldson, Lufkin &
Jenrette Securities Corporation to partially fund the consummation of the
transactions contemplated hereby which have been previously delivered to the
Current Owner Representative.
"Common Units" means Class A Common Units and Class L Common Units.
------------
"Employee Benefit Plan" means any (i) qualified or nonqualified
---------------------
Employee Pension Benefit Plan as defined in Section 3(2) of ERISA (including any
Multiemployer Plan as defined in Section 3(37) of ERISA), (ii) Employee Welfare
Benefit Plan as defined in Section 3(1) of ERISA, or (iii) fringe benefit plan,
policy, program, and arrangement, whether or not subject to ERISA and whether or
not funded.
"Environmental, Health, and Safety Requirements" shall mean all
----------------------------------------------
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including, without limitation, all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
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<PAGE>
"Equity Commitment Letter" means the equity commitment letter dated as
------------------------
of the date hereof issued by Bain Capital Fund VI, L.P., BCIP Trust Associates
II, L.P., BCIP Trust Associates II-B, L.P., BCIP Associates II and BCIP
Associates II-B to partially fund the consummation of the transactions
contemplated hereby in the form of Exhibit K attached hereto.
---------
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"GAAP" means United States generally accepted accounting principles in
----
effect as of the Closing Date, consistently applied.
"Indebtedness" means at a particular time, without duplication, (i)
------------
any indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business which
are not more than six months past due), (iv) any commitment by which a Person
assures a creditor against loss (including, without limitation, contingent
reimbursement obligations with respect to letters of credit), (v) any
indebtedness guaranteed in any manner by a Person (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse),
(vi) any obligations under capitalized leases with respect to which a Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or with
respect to which obligations a Person assures a creditor against loss, (vii) any
indebtedness secured by a Lien on a Person's assets, (viii) any cash or book
overdrafts, (ix) any distributions payable or loans/advances payable to any
related parties or partners as of the Closing, (x) any recorded amounts owing
for unpaid sales/use tax, including interest and penalties, as of the Closing
and (xi) any other liabilities recorded in accordance with GAAP as of the
Closing that are related to operations other than within one year of the
Closing, including, without limitation, any environmental liabilities or
unfunded employee or retiree obligations.
"Intellectual Property" means all (i) patents, patent applications and
---------------------
patent disclosures, (ii) trademarks, service marks, trade dress, trade names,
logos, internet domain names and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, data, data bases and documentation thereof, (vi) trade
secrets and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and information),
(vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).
"knowledge" of the Company and its Subsidiaries and the Current Owners
---------
means the actual knowledge of the following persons: Ray Anthony, Sam Anthony,
David Mahokey, Art
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Innamorato, Al Bove, William Kania, Ray Graham, Joe Connelly, Dick Ferchack and
Dale Buckwalter.
"Liens" means any mortgage, pledge, security interest, covenant,
-----
easement, encumbrance, lien or charge of any kind (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof), any sale of receivables with recourse against the Company,
any of its Subsidiaries or any Affiliate, any filing or agreement to file a
financing statement as debtor under the applicable Uniform Commercial Code or
any similar statute other than to reflect ownership by a third party of property
leased to the Company or any of its Subsidiaries under a lease which is not in
the nature of a conditional sale or title retention agreement, or any
subordination arrangement in favor of another Person (other than any
subordination arising in the ordinary course of business).
"Permitted Liens" shall mean: (i) statutory liens for current taxes or
---------------
other governmental charges with respect to the Company's assets not yet due and
payable or the amount or validity of which is being contested in good faith by
appropriate proceedings by the Company and for which appropriate reserves have
been established on the Company's books and records in accordance with GAAP;
(ii) mechanic's, carrier's, worker's, repairer's and similar statutory liens
arising or incurred in the ordinary course of business for amounts which are not
delinquent and which are not, individually or in the aggregate, material to the
Company's or its Subsidiaries' business; (iii) zoning, entitlement, building and
other land use regulations imposed by governmental agencies having jurisdiction
over the Owned Real Property and Leased Real Property which are not violated by
the current use and operation of the Owned Real Property and Leased Real
Property; and (iv) covenants, conditions, restrictions, easements and other
similar matters of record affecting title to the Owned Real Property and Leased
Real Property which do not materially impair the occupancy or use of the Owned
Real Property and Leased Real Property for the purposes for which it is
currently used in the business of the Company and its Subsidiaries.
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Unit" means a Class A Preferred Unit of the Company and
--------------
having the rights and obligations set forth in Exhibit B-1.
-----------
"RA" means Ray G. Anthony.
--
"Restricted Securities" means (i) the Units issued hereunder and (ii)
---------------------
any securities issued with respect to the securities referred to in clause (i)
by way of a stock dividend or stock split or in connection with a combination of
shares, refinancing, merger, consolidation or other reorganization. As to any
particular Restricted Securities, such securities shall cease to be Restricted
Securities when they have (a) been effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering them,
(b) been distributed to the public through a broker, dealer or market maker
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act or become eligible for sale pursuant to Rule 144(k) (or any
similar provision then in force) under the Securities Act or (c) been otherwise
transferred and new certificates for them not bearing the Securities Act
legend set forth in Section 8.07 have been delivered
-50-
<PAGE>
by the Company in accordance with Section 8.07. Whenever any particular
securities cease to be Restricted Securities, the holder thereof shall be
entitled to receive from the Company, without expense, new securities of like
tenor not bearing a Securities Act legend of the character set forth in Section
8.07.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
-----------------------
as amended, or any similar federal law then in force.
"Subsidiary" means, with respect to any Person, any corporation,
----------
limited liability company, partnership, association or other business entity of
which (a) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, the stockholders or trustees thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof, or (b) if a
limited liability company, partnership, association or other business entity, a
majority of the partnership or other similar ownership interest thereof is at
the time owned or controlled, directly or indirectly, by any Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of the limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or member or general partner of such
limited liability company, partnership, association or other business entity.
"Tax" or "Taxes" means federal, state, county, local, foreign or other
--- -----
income, foreign withholding, gross receipts, ad valorem, franchise, profits,
sales or use, transfer, registration, excise, utility, environmental,
communications, real or personal property, capital stock, license, payroll, wage
or other withholding, employment, social security, severance, stamp, occupation,
alternative or add-on minimum, estimated and other taxes of any kind whatsoever
(including, without limitation, deficiencies, penalties, additions to tax, and
interest attributable thereto) whether disputed or not.
"Tax Return" means any return, information report or filing with
----------
respect to Taxes, including any schedules attached thereto and including any
amendment thereof.
"Unit" means a Common Unit or a Preferred Unit.
----
Section 10. Termination. This Agreement may be terminated as
-----------
provided below:
(a) The Purchaser Representative, on behalf of the Purchasers, and the
Current Owner Representative, on behalf of the Current Owners, may terminate
this Agreement by mutual written consent at any time prior to the Closing;
-51-
<PAGE>
(b) The Purchaser Representative, on behalf of the Purchasers, may
terminate this Agreement by giving written notice to the Current Owner
Representative, on behalf of the Current Owners, at any time prior to the
Closing, (i) in the event any of the Company and the Current Owners has breached
any representation, warranty, covenant or agreement contained in this Agreement
in any material respect or (ii) if the Closing shall not have occurred on or
before August 31, 1998 (the "Expiration Date"), by reason of the failure of any
---------------
condition precedent under Section 2 above; and
(c) The Purchaser Representative, on behalf of the Purchasers, may
terminate this Agreement by giving written notice to the Current Owner
Representative, on behalf of the Current Owners, any time within ten (10)
business days after the Current Owners deliver the Disclosure Schedules to the
Purchaser Representative pursuant to Section 8.08 if the Purchaser
Representative is not satisfied in its sole discretion with the contents of such
Schedules.
(d) the Current Owner Representative, on behalf of the Current
Owners, may terminate this Agreement by giving written notice to the Purchaser
Representative, on behalf of the Purchasers, at any time prior to the Closing
(i) in the event the Purchasers have breached any representation, warranty,
covenant or agreement contained in this Agreement in any material respect or
(ii) if the Closing shall not have occurred on or before the Expiration Date, by
reason of the failure of any condition precedent under Section 3 above.
Notwithstanding anything in this Section 10 to the contrary, no Party may
terminate this Agreement if the circumstance giving rise to such Party's right
to terminate results primarily from a breach by such Party itself or such
Party's Affiliates (or, in the case of termination by the Current Owner
Representative, on behalf of the Current Owners, breach by any of the Current
Owners, or, in the case of termination by the Purchaser Representative, on
behalf of the Purchasers, breach by any of the Purchasers) of any
representation, warranty, covenant or agreement contained in this Agreement. If
any Party terminates this Agreement pursuant to Section 10, all rights and
obligations of the Parties hereunder and any third party beneficiaries shall
terminate without any liability of any Party to any other Party or any third
party beneficiary, except for any liability of any Party then in breach to any
other Party or to any third party beneficiary.
Section 11. Miscellaneous.
-------------
11.01 Expenses. Except as otherwise provided herein, each of the
--------
Current Owners, on the one hand, and the Purchasers, on the other hand, will
bear their own costs and expenses (including, without limitation, all legal,
accounting, consulting, investment banking, brokerage and other fees and
expenses) (collectively, "Expenses") incurred in connection with this Agreement
--------
and the transactions contemplated hereby, except that upon consummation of the
transactions contemplated hereby the Company shall pay any Expenses incurred by
the Purchasers in connection with such consummation; provided that the foregoing
--------
will not prohibit Expenses of the Current Owners from being paid by the Company
so long as such payments are taken into account in determining Consolidated Net
Worth. The Current Owners shall be responsible for any Taxes which may be
payable in respect of the execution and delivery of this Agreement and the
transactions contemplated hereby, including, but not limited to, any transfer
Taxes. To the extent the Company is liable at or after the Closing for any
Expenses or Taxes of the Current Owners, the Distribution Amount will be reduced
dollar for dollar.
-52-
<PAGE>
11.02 Press Release and Announcements. No Party shall issue any
-------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement or any agreements contemplated hereby (including announcements to
customers, suppliers, etc.) prior to the Closing without the prior written
approval of the Purchaser Representative, on behalf of the Purchasers, and the
Current Owner Representative, on behalf of the Current Owners.
11.03 Further Assurances. The Current Owners and the Current
------------------
Owner Representative, on behalf of the Current Owners, will execute and deliver
such further instruments of conveyance and transfer and take such additional
action as the Purchaser Representative, on behalf of the Purchasers, may
reasonably request to effect, consummate, confirm or evidence the transactions
contemplated by this Agreement. The Purchasers and the Purchaser
Representative, on behalf of the Purchasers, will execute and deliver such
further instruments of conveyance and transfer and take such additional action
as the Current Owner Representative, on behalf of the Current Owners, may
reasonably request to effect, consummate, confirm or evidence the transactions
contemplated by this Agreement.
11.04 Confidentiality. Whether or not the transactions
---------------
contemplated hereby are consummated, the Company and the Current Owners will
keep confidential all information and materials regarding the Purchasers, their
investors and their lenders reasonably designated by any of such Persons as
confidential at the time of disclosure thereof, except that the Parties may
disclose any such information and materials to their respective lenders,
attorneys, accountants, advisors and Affiliates. If the transactions
contemplated hereby are consummated, the Current Owners will maintain
confidential and will not use or disclose, directly or indirectly (except as
required by law or as authorized in writing by the Company prior to such
disclosure), any confidential or proprietary information or materials regarding
the business or properties of the Company and/or its Subsidiaries (the
"Confidential Information"), unless and to the extent that (a) such disclosure
- -------------------------
or use is directly related to and required by the performance by any Current
Owner of his duties under his Employment Agreement, (b) such disclosure is
required by law or legal process or administrative proceedings or (c) the
aforementioned matters become generally known to and available for use by the
public other than as a result of the Current Owners' acts or omissions to act.
In the event that any Current Owner or anyone to whom Confidential information
is transmitted pursuant to this Agreement become legally compelled to disclose
any of the Confidential Information, such Person (and the Current Owner
Representative, on behalf of any Current Owner), shall use its or his reasonable
efforts to provide the Purchaser Representative with prompt notice before such
Confidential Information is disclosed so that the Purchaser Representative may
seek a protective order or other appropriate remedy or waive compliance with the
provisions of this Agreement. In the event that such protective order or other
remedy is not obtained, or the Purchaser Representative waives compliance with
the provisions of this Agreement, the Person legally compelled to disclose
Confidential Information will furnish only that portion of the Confidential
Information which such Person is advised by outside counsel is legally required
and, if requested by the Purchaser Representative, such Person will, at the
Purchasers' expense, exercise reasonable efforts to obtain a protective order or
other reliable assurance that confidential treatment will be accorded to the
Confidential Information.
-53-
<PAGE>
11.05 Entire Agreement. This Agreement (including the agreements and
----------------
documents referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior understandings, agreements, or representations
by or among the Parties, written or oral, that may have related in any way to
the subject matter hereof including the Letter of Intent, dated February 24,
1998, as amended between the Company, RA and Bain, which shall terminate upon
execution of this Agreement.
11.06 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
11.07 Headings. The section headings contained in this Agreement
--------
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.08 Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given when
personally delivered, sent by telecopy (with receipt confirmed) on a business
day during regular hours of the recipient (or, if not, on the next succeeding
business day) or one business day after being sent by reputable overnight
courier service (charges prepaid) to the intended recipient as set forth below:
If to the Company (prior to the Closing), the Current Owners or the Current
---------------------------------------------------------------------------
Owner Representative:
- --------------------
Anthony Crane Rental, L.P.
1125 Camp Hollow Road
West Mifflin, PA
Attention: Ray Anthony
Telephone: (412) 469-3700
Telecopy: (412) 469-0691
with a copy to:
--------------
(which copy shall not constitute notice to the Company)
Williams Coulson
Two Chatham Center, 15th Floor
Pittsburgh, PA 15219
Attention: Mark C. Coulson
Telephone: (412 ) 454-0200
Telecopy: (412 ) 281-6622
-54-
<PAGE>
If to the Company (after the Closing), the Purchasers or the Purchaser
----------------------------------------------------------------------
Representative:
- --------------
Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Bob Gay
Paul Edgerley
Andrew Balson
Telephone: (617) 572-3000
Telecopy: (617) 572-3274
with a copy to:
---------------
(which copy shall not constitute notice to the Company or the
Purchasers)
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: James L. Learner
E. Paul Quinn
Telephone: (312) 861-2000
Telecopy: (312) 861-2200
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means, but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is received
by the intended recipient. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
11.09 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the domestic laws of the Commonwealth of
Pennsylvania without giving effect to any choice or conflict of law provision or
rule (whether of the Commonwealth of Pennsylvania or any other jurisdiction)
that would cause the application to this Agreement of the laws of any
jurisdiction other than the Commonwealth of Pennsylvania.
11.10 Amendments and Waivers. No amendment of any provision of
----------------------
this Agreement shall be valid unless the same shall be in writing and signed by
the Purchaser Representative, on behalf of the Purchasers, and the Current Owner
Representative, on behalf of the Current Owners. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
11.11 Construction. Where specific language is used to clarify by
------------
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict
in any manner the construction of the general statement to which it relates.
Nothing in any Schedule
-55-
<PAGE>
attached hereto shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless such Schedule identifies the
exception with reasonable particularity.
11.12 Remedies. Except as provided in Section 8.02 above
--------
regarding the requirement of using the arbitration procedures set forth therein
for resolving and remedying claims for money damages arising out of the
provisions of Section 8 above, each of the Parties shall have and retain all
other rights and remedies existing in their favor at law or in equity,
including, without limitation, any actions for specific performance and/or
injunctive or other equitable relief (including, without limitation, the remedy
of rescission) to enforce or prevent any violations of the provisions of this
Agreement.
56
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Recapitalization Agreement on the date first written above.
COMPANY:
-------
ANTHONY CRANE RENTAL, L.P.
By: Anthony Crane Rental, Inc.
Its: General Partner
By: /s/ David W. Mahokey
-----------------------------------
Its: Chief Financial Officer
-----------------------------------
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: Anthony Crane Rental, Inc.
Its: General Partner
By: /s/ David W. Mahokey
-----------------------------------
Its: Chief Financial Officer
-----------------------------------
PURCHASERS:
----------
BAIN/ACR, L.L.C.
By: /s/ Robert C. Gay
-----------------------------------
Its: President
-----------------------------------
ACR MANAGEMENT, L.L.C.
By: /s/ Andrew B. Balson
-----------------------------------
Its: Secretary
-----------------------------------
ANTHONY IRON AND METAL COMPANY
By: /s/ David W. Mahokey
-----------------------------------
Its: General Partner
<PAGE>
CURRENT OWNERS:
--------------
ANTHONY CRANE RENTAL, INC.
By: /s/ David W. Mahokey
-----------------------------------
Its: Chief Financial Officer
-----------------------------------
ANTHONY CRANE RENTAL OF TEXAS, INC.
By: /s/ David W. Mahokey
-----------------------------------
Its: Chief Financial Officer
-----------------------------------
ANTHONY IRON AND METAL COMPANY
By: /s/ David W. Mahokey
-----------------------------------
Its: General Partner
ANTHONY CRANE RENTAL OF GEORGIA, INC.
By: /s/ David W. Mahokey
-----------------------------------
Its: Chief Financial Officer
-----------------------------------
<PAGE>
ACR ACQUISITIONS, INC.
By: /s/ David W. Mahokey
-----------------------------------
Its: Chief Financial Officer
-----------------------------------
/s/ Ray G. Anthony
----------------------------------------
Ray G. Anthony
/s/ William B. Kania
----------------------------------------
William B. Kania, in his capacity as the
Current Owner Representative
<PAGE>
SCHEDULE OF PURCHASERS
----------------------
Bain/ACR, LLC.
ACR Management, L.L.C.
Anthony Iron and Metal Company (on behalf of David Mahokey)
Al Bove
Arthur Innamorato
<PAGE>
SCHEDULE OF CURRENT OWNERS
--------------------------
Anthony Crane Rental, Inc.
Anthony Crane Rental of Texas, Inc.
Anthony Iron and Metal Company
Anthony Crane Rental of Georgia, Inc.
ACR Acquisition, Inc.
<PAGE>
EXHIBIT 3.1
<TABLE>
<S> <C>
Microfilm Number ____________________ Filed with the Department of State on ______________________________________
Entity Number _______________________ ____________________________________________________________________________
SECRETARY OF THE COMMONWEALTH
</TABLE>
CERTIFICATE OF LIMITED PARTNERSHIP
DSCB:15-8511 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. (S) 8511 (relating to
certificate of limited partnership), the undersigned, desiring to form a limited
partnership, hereby certifies that:
1. The name of the limited partnership is: Anthony Sales & Leasing, L.P.
--------------------------------
2. The (a) address of this limited partnership's initial registered office in
this Commonwealth or (b) name of its commercial registered office provider
and the county of venue is:
(a) 1165 Camp Hollow Road West Mifflin, Pennsylvania 15122 Allegheny
---------------------------------------------------------------------
Number and Street City State Zip County
(b) c/o:_________________________________________________________________
Name of Commercial Registered Office Provider County
For a limited partnership represented by a commercial registered office
provider, the county in (b) shall be deemed the county in which the limited
partnership is located for venue and official publication purposes.
The name and business address of each general partner of the partnership is:
<TABLE>
<CAPTION>
Name Address
<S> <C>
Anthony Crane Rental, Inc. 1165 Camp Hollow Road, West Mifflin, Pennsylvania 15122
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
(CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
X The formation of the limited partnership shall be effective upon filing
-----
this Certificate of Limited Partnership in the Department of State.
_____ The formation of the limited partnership shall be effective on:
_______________________________ at _____________________________________
Date Hour
- ------------------------------ ----------------------------------
Signature Signature
- ------------------------------ ----------------------------------
Signature Signature
<PAGE>
<TABLE>
<S> <C>
Microfilm Number ______________________ Filed with the Department of State on June 20, 1996
--------------
Entity Number _________________________ __________________________________________________
Secretary of the Commonwealth
</TABLE>
CERTIFICATE OF AMENDMENT-LIMITED PARTNERSHIP
DSCB:15-8512 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. (S) 8512 (relating to
certificate of amendment), the undersigned limited partnership, desiring to
amend its Certificate of Limited Partnership, hereby certifies that:
The name of the limited partnership is: Anthony Sales and Leasing, L.P.
---------------------------------
- -----------------------------------------------------------------------------
<TABLE>
<S> <C>
The date of filing of the original Certificate of Limited Partnership is: June 5, 1996
--------------------
<CAPTION>
(CHECK, AND IF APPROPRIATE, COMPLETE ONE OF THE FOLLOWING):
<S> <C>
X The amendment adopted by the limited partnership, set forth in full, is as follows:
-----
The name of the limited partnership is changed to:
Anthony Crane Sales & Leasing, L.P.
_____ The amendment adopted by the limited partnership is set forth in full in Exhibit A attached hereto and made a part
hereof.
(CHECK, AND IF APPROPRIATE, COMPLETE ONE OF THE FOLLOWING):
X The amendment shall be effective upon filing this Certificate of Amendment in the Department of State.
-----
_____ The amendment shall be effective upon filing this Certificate of Amendment in the Department of State.
_____ The amendment shall be effective on ___________________________ at _______________________________________.
Date Hour
(CHECK IF THE AMENDMENT RESTATES THE CERTIFICATE OF LIMITED PARTNERSHIP):
X The restated Certificate of Limited Partnership supersedes the original Certificate of Limited Partnership and all
-----
amendments thereto.
IN TESTIMONY WHEREOF, the undersigned limited partnership has caused this Certificate of Amendment to be
executed on the 18th day of June, 1996.
---- ---- --
</TABLE>
ANTHONY SALES AND LEASING, L.P.
-------------------------------
(Name of Partnership)
BY: ANTHONY CRANE RENTAL, INC., GENERAL PARTNER
BY: /s/ David W. Mahokey
------------------------------------------------
David W. Mahokey (Signature)
TITLE: Chief Financial Officer
-----------------------
<PAGE>
<TABLE>
<S> <C>
Microfilm Number ________________ Filed with the Department of State on _____________________________________
Entity Number ___________________ ___________________________________________________________________________
Secretary of the Commonwealth
</TABLE>
CERTIFICATE OF AMENDMENT-LIMITED PARTNERSHIP
DSCB:15-8512 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. (S) 8512 (relating to
certificate of amendment), the undersigned limited partnership, desiring to
amend its Certificate of Limited Partnership, hereby certifies that:
<TABLE>
<S> <C>
1. The name of the limited partnership is: Anthony Crane Sales & Leasing, L.P.
------------------------------------
2. The date of filing of the original Certificate of Limited Partnership is: June 5, 1996
-------------
3. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
X The amendments adopted by the limited partnership, set forth in full, is as follows:
-----
The new name of the limited partnership is "Anthony Crane Rental Holdings, L.P."
-------------------------------------------------------------------------------
_____ The amendment adopted by the limited partnership is set forth in full in Exhibit A attached hereto and made a part
hereof.
4. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
X The amendment shall be effective upon filing this Certificate of Amendment in the Department of State.
-----
_____ The amendment shall be effective on: ___________________________________ at _____________________________________
Date Hour
5. (CHECK IF THE AMENDMENT RESTATES THE CERTIFICATE OF LIMITED PARTNERSHIP):
X The restated Certificate of Limited Partnership supersedes the original Certificate of Limited Partnership and all
-----
amendments thereto.
IN TESTIMONY WHEREOF, the undersigned limited partnership has caused this Certificate of Amendment to be
executed this 17 of July, 1998.
</TABLE>
ANTHONY CRANE SALES & LEASING, L.P.
By: Anthony Crane Rental, Inc.
Its: General Partner
By: /s/ David W. Mahokey
------------------------------
David W. Mahokey, Chief Financial Officer
<PAGE>
EXHIBIT 3.2
[EXECUTION COPY]
________________________________________
ANTHONY CRANE RENTAL HOLDINGS, L.P.
________________________________________
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
Dated as of July 22, 1998
THE PARTNERSHIP INTERESTS REPRESENTED BY THIS AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED OR UNDER ANY OTHER APPLICABLE SECURITIES
LAWS. SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED
OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR
EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON
TRANSFERABILITY SET FORTH HEREIN.
THE PARTNERSHIP INTERESTS REPRESENTED BY THIS AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER
SPECIFIED IN THE SECURITYHOLDERS AGREEMENT, DATED AS OF JULY 22, 1998, AS
AMENDED OR MODIFIED FROM TIME TO TIME, AMONG THE ISSUER (THE "PARTNERSHIP"), AND
CERTAIN INVESTORS, AND THE PARTNERSHIP RESERVES THE RIGHT TO REFUSE THE TRANSFER
OF SUCH INTERESTS UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO ANY
TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE PARTNERSHIP TO
THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS..................................................................... 1
ARTICLE II
ORGANIZATIONAL MATTERS.......................................................... 9
2.1 Formation of Partnership................................................... 9
2.2 Limited Partnership Agreement.............................................. 9
2.3 Name....................................................................... 9
2.4 Purpose.................................................................... 9
2.5 Principal Office; Registered Office........................................ 9
2.6 Term....................................................................... 9
ARTICLE III
CAPITAL CONTRIBUTIONS........................................................... 10
3.1 General Partner............................................................ 10
3.2 Limited Partners........................................................... 10
3.3 Capital Accounts........................................................... 10
3.4 No Withdrawal.............................................................. 11
3.5 Loans From Unitholders..................................................... 11
3.6 Issuances of Units......................................................... 12
ARTICLE IV
DISTRIBUTIONS AND ALLOCATIONS................................................... 12
4.1 Distributions.............................................................. 12
4.2 Allocations................................................................ 14
4.3 Special Allocations........................................................ 15
4.4 Tax Allocations............................................................ 16
4.5 Curative Allocations....................................................... 17
4.6 Indemnification and Reimbursement for Payments on Behalf of a Unitholder... 17
ARTICLE V
MANAGEMENT...................................................................... 18
5.1 Authority of General Partner.............................................. 18
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
5.2 Actions Requiring Approval of Limited Partners........................... 18
5.3 Partnership Qualifications and Filings................................... 19
5.4 Reliance by Third Parties................................................ 19
5.5 Compensation and Reimbursement of General Partner........................ 19
5.6 Outside Activities....................................................... 20
5.7 Loans and Guarantees by the General Partner.............................. 20
5.8 Determinations by the General Partner.................................... 20
5.9 Purchase of Units........................................................ 21
5.10 Indemnification.......................................................... 21
5.11 Limitation of Liability.................................................. 22
ARTICLE VI
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS..................................... 22
6.1 Limitation of Liability................................................... 22
6.2 Management of Business.................................................... 22
6.3 No Right of Partition..................................................... 22
6.4 Outside Activities........................................................ 23
ARTICLE VII
BOOKS, RECORDS, ACCOUNTING AND REPORTS......................................... 23
7.1 Records and Accounting.................................................... 23
7.2 Fiscal Year............................................................... 23
7.3 Reports................................................................... 23
7.4 Transmission of Communications............................................ 24
ARTICLE VIII
TAX MATTERS.................................................................... 24
8.1 Preparation of Tax Returns................................................ 24
8.2 Tax Elections............................................................. 24
8.3 Tax Controversies......................................................... 25
ARTICLE IX
VOTING; AMENDMENTS............................................................. 25
9.1 Voting Rights............................................................. 25
9.2 Amendments................................................................ 26
ARTICLE X
TRANSFER OF PARTNERSHIP INTERESTS.............................................. 27
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
10.1 Transfer In General...................................................... 27
10.2 Assignee's Rights........................................................ 27
10.3 Assignor's Rights and Obligations........................................ 28
ARTICLE XI
ADMISSION OF PARTNERS.......................................................... 29
11.1 Substituted Limited Partners............................................. 29
11.2 Additional Limited Partners.............................................. 29
11.3 Admission of a Successor General Partner................................. 29
11.4 Representations of New Partners.......................................... 29
ARTICLE XII
WITHDRAWAL OR REMOVAL OF PARTNERS.............................................. 29
12.1 Withdrawal of General Partner............................................ 29
12.2 Removal of General Partner............................................... 30
12.3 Election of Successor General Partner.................................... 30
12.4 Purchase of General Partner's Partnership Interest....................... 30
12.5 Former General Partner's Liabilities..................................... 31
12.6 Withdrawal of Limited Partners........................................... 31
ARTICLE XIII
DISSOLUTION AND LIQUIDATION.................................................... 31
13.1 Dissolution.............................................................. 31
13.2 Continuation After Dissolution........................................... 32
13.3 Liquidation.............................................................. 32
13.4 Distribution in Kind..................................................... 34
13.5 Deficit Makeup........................................................... 34
13.6 Cancellation of Certificate of Limited Partnership....................... 34
13.7 Reasonable Time for Winding Up........................................... 34
13.8 Return of Capital........................................................ 34
13.9 Liquidity Event or IPO................................................... 34
ARTICLE XIV
VALUATION...................................................................... 36
14.1 Determination............................................................ 36
14.2 Determination of Fair Market............................................. 36
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
ARTICLE XV
GENERAL PROVISIONS............................................................. 37
15.1 Power of Attorney........................................................ 37
15.2 Title to Partnership Assets.............................................. 37
15.3 Addresses and Notices.................................................... 38
15.4 Binding Effect........................................................... 38
15.5 Creditors................................................................ 38
15.6 Waiver................................................................... 38
15.7 Counterparts............................................................. 38
15.8 Applicable Law........................................................... 38
15.9 Severability............................................................. 38
15.10 Further Action........................................................... 39
15.11 Expenses................................................................. 39
15.12 Offset................................................................... 39
15.13 Entire Agreement......................................................... 39
15.14 Remedies................................................................. 39
15.15 Descriptive Headings; Interpretation..................................... 40
</TABLE>
iv
<PAGE>
ANTHONY CRANE RENTAL HOLDINGS, L.P.
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of
July 22, 1998, is entered into by and among the Partners a party hereto.
Pursuant to Section 12.5 of that certain Amended and Restated Limited
Partnership Agreement of Anthony Crane Sales & Leasing, L.P., dated as of June
5, 1996, (the "Original Agreement"), the Original Agreement was amended and
------------------
restated pursuant to that certain Amended and Restated Agreement of Limited
Partnership of Anthony Crane Sales & Leasing, L.P. dated as of June 20, 1996
(the "First Amended and Restated Agreement"). The First Amended and Restated
------------------------------------
Agreement was amended and restated pursuant to that certain Amendment to the
Amended and Restated Agreement of Limited Partnership of Anthony Crane Sales &
Leasing, L.P., dated as of July 15, 1998 (the "Second Amended and Restated
---------------------------
Agreement"). The parties thereto desire to amend and restate the Second Amended
- ---------
and Restated Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby amend and restate the First Amended and Restated Agreement as
follows:
ARTICLE I
DEFINITIONS
The following definitions shall be applied to the terms used in this
Agreement for all purposes, unless otherwise clearly indicated to the contrary.
"Additional Partner" means a Person admitted to the Partnership as a
------------------
Partner pursuant to Section 11.2.
"Adjusted Capital Account Deficit" means with respect to any Capital
--------------------------------
Account as of the end of any Taxable Year, the amount by which the adjusted
balance in such Capital Account is less than zero. For this purpose, such
Person's Capital Account balance shall be
(a) reduced for any items described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6), and
(b) increased for any amount such Person is obligated to contribute
or is treated as being obligated to contribute to the Partnership
pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c)
(relating to partner liabilities to a partnership) or 1.704-
2(g)(1) and 1.704-2(i) (relating to minimum gain).
<PAGE>
"Admission Date" is defined in Section 10.3.
--------------
"Affiliate" of any Person means any Person that directly or indirectly
---------
controls, is controlled by, or is under common control with the Person in
question.
"Agreement" means this Amended and Restated Limited Partnership
---------
Agreement of Anthony Crane Rental, L.P. dated as of the date hereof.
"Assignee" means a Person to whom a Partnership Interest has been
--------
transferred in accordance with the terms of the Securityholders Agreement, but
who has not become a Partner pursuant to Article XI.
"Bain" means Bain/ACR, L.L.C., a Delaware limited liability company.
----
"Base Rate" means, on any date, a variable rate per annum equal to the
---------
rate of interest most recently published by The Wall Street Journal as the
-----------------------
"prime rate" at large U.S. money center banks.
"Book Value" means, with respect to any Partnership property, the
----------
Partnership's adjusted basis for federal income tax purposes, adjusted from time
to time to reflect the adjustments required or permitted by Treasury Regulation
Section 1.704-1(b)(2)(iv)(d)-(g).
"Capital Account" means the capital account maintained for a Partner
---------------
pursuant to Section 3.3.
"Capital Contribution" means any cash, cash equivalents, surrender of
--------------------
entitlement to deferred compensation (to the extent of the amount so
surrendered), promissory obligations or the Fair Market Value of other property
which a Partner contributes or is deemed to have contributed to the Partnership
pursuant to Section 3.1, 3.2 or 5.1. For purposes of this provision, each
Partner who received Units pursuant to the restructuring of pre-existing
partnership interests in the Partnership pursuant to the Recapitalization
Agreement shall be deemed to have contributed property to the Partnership with a
Fair Market Value equal to the amount set forth as such Partner's adjusted
Capital Account balance on Schedule III attached hereto as of the date of this
------------
Agreement.
"Certificate" means the Partnership's Certificate of Limited
-----------
Partnership as filed with the Secretary of State of Pennsylvania.
"Class A Common Unit" means a Unit representing a fractional part of
-------------------
the Partnership Interests of the Partners and having the rights and obligations
specified with respect to Class A Common Units in this Agreement.
"Class A Common Unitholder" means a holder of Class A Common Units.
-------------------------
2
<PAGE>
"Class A Preferred Unit" means a Unit representing a fractional part
----------------------
of the Partnership Interests of the Partners and having the rights and
obligations specified with respect to Class A Preferred Units in this Agreement.
"Class A Preferred Unitholder" means a holder of Class A Preferred
----------------------------
Units.
"Class A Preferred Yield" means, with respect to each Class A
-----------------------
Preferred Unit, the amount accruing on such Class A Preferred Unit on a daily
basis, at the rate of 11% per annum, compounded on the last day of each calendar
quarter, on (a) the Unreturned Capital of such Class A Preferred Unit plus (b)
Unpaid Class A Preferred Yield thereon, for all prior quarterly periods. In
calculating the amount of any Distribution to be made during a period, the
portion of a Class A Preferred Unit's Class A Preferred Yield for such portion
of such period elapsing before such Distribution is made shall be taken into
account with respect to determining the amount of such Distribution with respect
to Class A Preferred Yield.
"Class L Common Unit" means a Unit representing a fractional part of
-------------------
the Partnership Interests of the Partners and having the rights and obligations
specified with respect to the Class L Common Units in this Agreement.
"Class L Common Unitholder" means a holder of Class L Common Units.
-------------------------
"Class L Common Yield" means, with respect to each Class L Common
--------------------
Unit, the amount accruing on such Class L Common Unit on a daily basis, at the
rate of 12% per annum, compounded on the last day of each calendar quarter, on
(a) the Unreturned Capital of such Class L Common Unit plus (b) Unpaid Class L
Common Yield thereon, for all prior quarterly periods. In calculating the
amount of any Distribution to be made during a period, the portion of a Class L
Common Unit's Class L Common Yield for such portion of such period elapsing
before such Distribution is made shall be taken into account with respect to
determining the amount of such Distribution with respect to Class L Common
Yield.
"Code" means the United States Internal Revenue Code of 1986, as
----
amended. Such term shall be deemed to include any future amendments to the Code
and any corresponding provisions of succeeding Code provisions (whether or not
such amendments and corresponding provisions are mandatory or discretionary) to
the extent that the General Partner determines in good faith that any such
future amendments and corresponding provisions do not adversely affect the
economic interests of any of the Partners hereunder.
"Common Unit" means a Unit representing a fractional part of the
-----------
Partnership Interests of the Partners and having the rights and obligations
specified with respect to Class L Common Units or Class A Common Units in this
Agreement.
"Common Unitholder" means a holder of Common Units.
-----------------
3
<PAGE>
"Distribution" means each distribution made by the Partnership to a
------------
Partner, whether in cash, property or securities of the Partnership and whether
by liquidating distribution, redemption, repurchase or otherwise; provided that
--------
none of the following shall be a Distribution: (a) any redemption or repurchase
by the Partnership of any Equity Securities, and (b) any recapitalization or
exchange of securities of the Partnership, and any subdivision (by Unit split or
otherwise) or any combination (by reverse Unit split or otherwise) of any
outstanding Units.
"Equity Securities" means (a) Units or other equity interests in the
-----------------
Partnership (including other classes or groups thereof having such relative
rights, powers and duties as may from time to time be established by the General
Partner, including rights, powers and/or duties senior to existing classes and
groups of Units and other equity interests in the Partnership), (b) obligations,
evidences of indebtedness or other securities or interests convertible or
exchangeable into Units or other equity interests in the Partnership and (c)
warrants, options or other rights to purchase or otherwise acquire Units or
other equity interests in the Partnership.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Event of Withdrawal" means the death, retirement, resignation,
-------------------
expulsion, bankruptcy or dissolution of a Partner or the occurrence of any other
event that terminates the continued partnership of a Partner in the Partnership
under the Pennsylvania Act.
"Executive Agreements" means those certain Executive Agreements by and
--------------------
among the Partnership and certain employees of the Partnership as in effect from
time to time.
"Fair Market Value" means, with respect to any asset or equity
-----------------
interest, its fair market value determined according to Article XIV.
"Fiscal Period" means any interim accounting period within a Taxable
-------------
Year established by the General Partner and which is permitted or required by
Code Section 706.
"Fiscal Year" means the Partnership's annual accounting period
-----------
established pursuant to Section 7.2.
"General Partner" means ACR Management, L.L.C., a Delaware limited
---------------
liability Company, in its capacity as general partner of the Partnership, and
any successor general partner of the Partnership appointed pursuant to the terms
of this Agreement.
"Governmental Entity" means the United States of America or any other
-------------------
nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government.
"Indemnified Person" is defined in Section 5.10.
------------------
4
<PAGE>
"Independent Third Party" means any Person who, immediately prior to
-----------------------
the contemplated transaction, does not own in excess of 10% of the Partnership's
Units on a fully-diluted basis (a "10% Owner"), who is not controlling,
---------
controlled by or under common control with any such 10% Owner and who is not the
spouse or descendent (by birth or adoption) of any such 10% Owner or a trust for
the benefit of such 10% Owner and/or such other Persons.
"Investor Units" means, collectively, Class A Common Units and Class L
--------------
Common Units owned by the Investors.
"Investors" means Bain/ACR, L.L.C., a Delaware limited liability
---------
company and its respective Affiliates and successors.
"IPO" means the initial sale pursuant to a registration statement
---
filed under the Securities Act of any Equity Securities of the Partnership,
whether by the Partnership or any holder of Equity Securities of the
Partnership.
"Liens" means any mortgage, pledge, security interest, encumbrance,
-----
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the Partnership, any Subsidiary or any
Affiliate, any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code or any similar statute other than to reflect
ownership by a third party of property leased to the Partnership or any
Subsidiaries under a lease which is not in the nature of a conditional sale or
title retention agreement, or any subordination arrangement in favor of another
Person (other than any subordination arising in the ordinary course of
business).
"Limited Partner" means each of the limited partners named on Schedule
--------------- --------
I attached hereto and any Person admitted to the Partnership as a Substituted
- -
Partner or Additional Partner; but only so long as such Person is shown on the
Partnership's books and records as the owner of one or more Units.
"Liquidity Event" means (a) any sale to an Independent Third Party of
---------------
all or substantially all (as defined in the Model Business Corporation Act) of
the assets of the Partnership and its Subsidiaries on a consolidated basis in
one transaction or series of related transactions, (b) any sale to an
Independent Third Party of all or substantially all of the Common Units (or a
transaction having a similar effect as contemplated by Section 13.9) in one
transaction or series of related transactions, but excluding any sales of Common
Units in a Public Sale (as defined in the Securityholders Agreement) or (c) a
merger or consolidation or other transaction which accomplishes one of the
foregoing.
"Losses" means items of Partnership loss and deduction determined
------
according to Section 3.3.
"Minimum Gain" means the partnership minimum gain determined pursuant
------------
to Treasury Regulation Section 1.704-2(d).
5
<PAGE>
"Partner" means a General Partner or a Limited Partner.
-------
"Partnership" means Anthony Crane Rental Holdings, L.P., a
-----------
Pennsylvania limited partnership, established in accordance with this Agreement
as such limited partnership may be from time to time constituted, and including
its successors.
"Partnership Interest" means the interest of a Unitholder in Profits,
--------------------
Losses and Distributions.
"Pennsylvania Act" means the Pennsylvania Revised Uniform Limited
----------------
Partnership Act, as it may be amended from time to time, and any successor to
the Pennsylvania Act.
"Person" means an individual or a corporation, partnership, limited
------
liability company, trust, unincorporated organization, association or other
entity.
"Preferred Unit" means a Unit representing a fractional part of the
--------------
Partnership Interests of the Partners and having the preference rights and other
rights and obligations specified with respect to Class A Preferred Units in this
Agreement.
"Preferred Unitholder" means a holder of Preferred Units.
--------------------
"Profits" means items of Partnership income and gain determined
-------
according to Section 3.3.
"Recapitalization Agreement" means that certain Recapitalization
--------------------------
Agreement, dated as of June 1, 1998, by and among the Purchasers and Current
Owners named therein, as amended or modified from time to time.
"Registration Rights Agreement" means that certain Registration Rights
-----------------------------
Agreement, dated as of the date hereof, by and among the Partnership and certain
of its Partners, as amended or modified from time to time.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, and applicable rules and regulations thereunder, and any successor
to such statute, rules or regulations. Any reference herein to a specific
section, rule or regulation of the Securities Act shall be deemed to include any
corresponding provisions of future law.
"Securityholders Agreement" means that certain Securityholders
-------------------------
Agreement, dated as of the date hereof, by and among the Partnership and certain
of its Partners, as amended or modified from time to time.
"Subsidiary" means, with respect to any Person, any corporation,
----------
limited partnership, partnership, association or business entity of which (a) if
a corporation, a majority of the total value of all classes of stock or the
total voting power of shares of stock entitled (without regard to the
6
<PAGE>
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
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (b) if a limited partnership, partnership, association
or other business entity (other than a corporation), a majority of partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited partnership,
partnership, association or other business entity (other than a corporation) if
such Person or Persons shall be allocated a majority of the limited partnership,
partnership, association or other business entity gains or losses or shall be or
control any managing partner or general partner of such limited partnership,
partnership, association or other business entity. For purposes hereof,
references to a "Subsidiary" of the Partnership shall be given effect only at
such times that the Partnership has one or more Subsidiaries, and, unless
otherwise indicated, the term "Subsidiary" refers to a Subsidiary of the
Partnership.
"Substituted Partner" means a Person that is admitted as a Partner to
-------------------
the Partnership pursuant to Section 11.1.
"Successor General Partner" means a Person that is admitted as a
-------------------------
Partner to the Partnership pursuant to Section 11.3.
"Tax Matters Partner" has the meaning given to such term in Section
-------------------
6231 of the Code.
"Taxable Year" means the Partnership's accounting period for federal
------------
income tax purposes which shall be the same as the Partnerships' Fiscal Year
determined pursuant to Section 7.2.
"Treasury Regulations" means the income tax regulations promulgated
--------------------
under the Code and effective as of the date hereof. Such term shall be deemed
to include any future amendments to such regulations and any corresponding
provisions of succeeding regulations (whether or not such amendments and
corresponding provisions are mandatory or discretionary) to the extent that the
General Partner determines in good faith that any such future amendments and
corresponding provisions do not adversely affect the economic interests of any
of the Partners hereunder.
"Unit" means a Partnership Interest of a Partner or an Assignee in the
----
Partnership representing a fractional part of the Partnership Interests of all
Partners and Assignees and shall include Common Units and Preferred Units;
provided that any class or group of Units issued shall have relative rights,
- --------
powers and duties set forth in this Agreement and the Partnership Interest
represented by such class or group of Units shall be determined in accordance
with such relative rights, powers and duties.
7
<PAGE>
"Unitholder" means any Partner in his or its capacity as owner of one
----------
or more Units as reflected on the Partnership's books and records or an
Assignee.
"Unpaid Class A Preferred Yield" of any Class A Preferred Unit means,
------------------------------
as of any date, an amount equal to the excess, if any, of (a) the aggregate
Class A Preferred Yield accrued on such Class A Preferred Unit for all periods
prior to such date (including partial periods), over (b) the aggregate amount of
prior Distributions made by the Partnership that constitute payment of Class A
Preferred Yield on such Class A Preferred Unit.
"Unpaid Class L Common Yield" of any Class L Common Unit means, as of
---------------------------
any date, an amount equal to the excess, if any, of (a) the aggregate Class L
Common Yield accrued on such Class L Common Unit for all periods prior to such
date (including partial periods), over (b) the aggregate amount of prior
Distributions made by the Partnership that constitute payment of Class L Common
Yield on such Class L Common Unit.
"Unpaid Yield" means Unpaid Class A Preferred Yield or Unpaid Class L
------------
Common Yield.
"Unreturned Capital" means, with respect to a Preferred Unit or a
------------------
Class L Common Unit, the excess, if any, of the Capital Contribution made or
deemed made in exchange for or on account of such Unit over all Distributions
made by the Partnership that constitute a return of the Capital Contribution
therefor pursuant to Section 4.1(a)(ii) or 4.1(a)(iv).
ARTICLE II
ORGANIZATIONAL MATTERS
2.1 FORMATION OF PARTNERSHIP. The Partnership was formed on June 5,
1996, as amended and restated on June 20, 1996, June 30, 1998 and again on the
date of this Agreement pursuant to the provisions of the Pennsylvania Act and
the provisions of this Agreement.
2.2 LIMITED PARTNERSHIP AGREEMENT. The Partners hereby execute this
Agreement for the purpose of establishing the affairs of the Partnership and the
conduct of its business in accordance with the provisions of the Pennsylvania
Act. The Partners hereby agree that during the term of the Partnership set
forth in Section 2.6 the rights and obligations of the Unitholders with respect
to the Partnership will be determined in accordance with the terms and
conditions of (a) this Agreement, and (b) except where the Pennsylvania Act
provides that such rights and obligations specified in the Pennsylvania Act
shall apply "unless otherwise provided in a limited partnership agreement" or
words of similar effect, and such rights and obligations are set forth in this
Agreement, the Pennsylvania Act.
2.3 NAME. The name of the Partnership shall be "Anthony Crane Rental
Holdings, L.P." The General Partner in its sole discretion may change the name
of the Partnership
8
<PAGE>
at any time and from time to time. Notification of any such change shall be
given to all Unitholders. The Partnership's business may be conducted under its
name and/or any other name or names deemed advisable by the General Partner.
2.4 PURPOSE. The purpose and business of the Partnership shall be
any business which may lawfully be conducted by a limited partnership formed
pursuant to the Pennsylvania Act.
2.5 PRINCIPAL OFFICE; REGISTERED OFFICE. The principal office of the
Partnership shall be at 1165 Camp Hollow Road, West Mifflin, Pennsylvania 15122,
or such other place as the General Partner may from time to time designate. The
Partnership may maintain offices at such other place or places as the General
Partner deems advisable. Notification of any such change shall be given to all
Unitholders. The address of the registered office of the Partnership in the
Commonwealth of Pennsylvania shall be the address of its principal office.
2.6 TERM. The term of the Partnership commenced upon the filing of
the Certificate in accordance with the Pennsylvania Act and shall continue in
existence until termination and dissolution thereof in accordance with the
provisions of Article XIII.
ARTICLE III
CAPITAL CONTRIBUTIONS
3.1 GENERAL PARTNER. The General Partner has purchased the number of
Units from the Partnership pursuant to the Recapitalization Agreement as set
forth on Schedule I.
----------
3.2 LIMITED PARTNERS.
(a) Each Limited Partner has purchased or received in exchange for a
contribution of other property to the Partnership the number of Units pursuant
to the Recapitalization Agreement as set forth on Schedule I.
----------
(b) Each Limited Partner who is subsequently issued Units by the
Partnership pursuant to Section 3.6 shall make the Capital Contributions to the
Partnership determined under Section 3.6 in exchange for such Units.
3.3 CAPITAL ACCOUNTS.
(a) The Partnership shall maintain a separate Capital Account for
each Unitholder according to the rules of Treasury Regulation Section 1.704-
1(b)(2)(iv). For this purpose, the Partnership may (in the discretion of the
General Partner), upon the occurrence of the events specified in Treasury
Regulation Section 1.704-1(b)(2)(iv)(f), increase or decrease the Capital
Accounts in accordance with the rules of such regulation and Treasury Regulation
Section 1.704-1(b)(2)(iv)(g) to reflect a revaluation of Partnership property.
The Partners hereby
9
<PAGE>
agree (i) that the Partnership property has been revalued as of the date of this
Agreement as set forth on Schedule II attached hereto and (ii) that the
-----------
respective Capital Account balances for each Partner have been adjusted as of
the date of this Agreement as set forth on Schedule III.
------------
(b) For purposes of computing the amount of any item of Partnership
income, gain, loss or deduction to be allocated pursuant to Article IV and to be
reflected in the Capital Accounts, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes (including any
method of depreciation, cost recovery or amortization used for this purpose);
provided that:
- -------- ----
(i) The computation of all items of income, gain, loss and
deduction shall include those items described in Code Section
705(a)(l)(B) or Code Section 705(a)(2)(B) and Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), without regard to the
fact that such items are not includable in gross income or are
not deductible for federal income tax purposes.
(ii) If the Book Value of any Partnership property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or
(f), the amount of such adjustment shall be taken into account
as gain or loss from the disposition of such property.
(iii) Items of income, gain, loss or deduction attributable to the
disposition of Partnership property having a Book Value that
differs from its adjusted basis for tax purposes shall be
computed by reference to the Book Value of such property.
(iv) Items of depreciation, amortization and other cost recovery
deductions with respect to Partnership property having a Book
Value that differs from its adjusted basis for tax purposes
shall be computed by reference to the property's Book Value in
accordance with Treasury Regulation Section 1.704-
1(b)(2)(iv)(g).
(v) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Sections 732(d), 734(b) or
743(b) is required, pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment
decreases such basis).
(vi) Payments made to any Partner which are treated for Federal
income tax purposes as guaranteed payments pursuant to Code
Section 707(c) shall be treated as Partnership expenses and
shall not be reflected as distributions which reduce the
distributee Partner's respective Capital Account balance;
10
<PAGE>
provided that such payments shall be treated as capital
--------
expenditures of the Partnership to the extent such payments are
required to be capitalized under the Code and any applicable
Treasury Regulations thereunder.
3.4 NO WITHDRAWAL No Person shall be entitled to withdraw any part
of such Person's Capital Contribution or Capital Account or to receive any
Distribution from the Partnership, except as expressly provided herein or in the
Securityholders Agreement.
3.5 LOANS FROM UNITHOLDERS. Loans by Unitholders to the
Partnership shall not be considered Capital Contributions. If any Unitholder
shall transfer funds to the Partnership in excess of the amounts required
hereunder to be contributed by such Unitholder to the capital of the
Partnership, the transfer of such excess shall not result in any increase in the
amount of the Capital Account of such Unitholder. The amount of any such excess,
to the extent approved by the General Partner and the Unitholder, shall be a
debt of the Partnership to such Unitholder and shall be payable or collectible
in accordance with the terms and conditions upon which such loans are made.
3.6 ISSUANCES OF UNITS. The General Partner shall have sole and
complete discretion in determining whether to issue Units, the number of Units
to be issued at any particular time, the Capital Contribution for any Units
issued and all other terms and conditions of the issuance of Units.
ARTICLE IV
DISTRIBUTIONS AND ALLOCATIONS
4.1 DISTRIBUTIONS.
(a) Except as otherwise set forth in this Section 4.1, the General
Partner may in its sole discretion make Distributions at any time or from time
to time. Except as otherwise set forth in Sections 4.1(b) and (c), each
Distribution shall be made in the following order and priority:
(i) First, to the Class A Preferred Unitholders, an amount equal to
the aggregate Unpaid Class A Preferred Yield with respect to such Class A
Preferred Unitholders' outstanding Class A Preferred Units (in the proportion
that each Class A Preferred Unitholder's share of Unpaid Class A Preferred Yield
with respect to such Class A Preferred Units bears to the aggregate Unpaid Class
A Preferred Yield with respect to all Class A Preferred Units immediately prior
to such Distribution) until each such Unitholder has received Distributions
under this clause (i) in respect of such Unitholder's Class A Preferred Units in
an amount equal to the aggregate Unpaid Class A Preferred Yield with respect to
such Unitholder's outstanding Class A Preferred Units immediately prior to such
Distribution, and no Distribution or any portion thereof shall be made under any
of the other paragraphs below until the entire amount of the Unpaid Class A
Preferred Yield with respect
11
<PAGE>
to the outstanding Class A Preferred Units immediately prior to such
Distribution has been paid in full;
(ii) Second, to the Class A Preferred Unitholders, an amount equal
to the aggregate Unreturned Capital with respect to such Class A Preferred
Unitholders' outstanding Class A Preferred Units (in the proportion that each
Class A Preferred Unitholder's share of Unreturned Capital with respect to Class
A Preferred Units bears to the aggregate amount of Unreturned Capital with
respect to all such Class A Preferred Units outstanding immediately prior to
such Distribution) until each such Class A Preferred Unitholder has received
Distributions under this clause (ii) in respect of such Unitholder's Class A
Preferred Units in an amount equal to the aggregate Unreturned Capital with
respect to such Class A Unitholder's outstanding Class A Preferred Units
immediately prior to such Distribution, and no Distribution or any portion
thereof may be made under any of the other paragraphs below until the entire
amount of Unreturned Capital with respect to the outstanding Class A Preferred
Units immediately prior to such Distribution has been paid in full;
(iii) Third, to the Class L Unitholders, an amount equal to the
aggregate Unpaid Class L Common Yield with respect to such Class L Common
Unitholders' outstanding Class L Units (in the proportion that each Class L
Common Unitholder's share of Unpaid Class L Common Yield with respect to such
Class L Common Units bears to the aggregate Unpaid Class L Common Yield with
respect to all Class L Units immediately prior to such Distribution) until each
such Unitholder has received Distributions under this clause (iii) in respect of
such Unitholder's Class L Units in an amount equal to the aggregate Unpaid Class
L Common Yield with respect to such Unitholder's outstanding Class L Units
immediately prior to such Distribution, and no Distribution or any portion
thereof shall be made under any of the other paragraphs below until the entire
amount of the Unpaid Class L Common Yield with respect to the outstanding Class
L Units immediately prior to such Distribution has been paid in full;
(iv) Fourth, to the Class L Common Unitholders, an amount equal to
the aggregate Unreturned Capital with respect to such Class L Common
Unitholders' outstanding Class L Common Units (in the proportion that each Class
L Common Unitholder's share of Unreturned Capital with respect to such Class L
Common Units bears to the aggregate Unreturned Capital with respect to all Class
L Common Units immediately prior to such Distribution) until each such
Unitholder has received Distributions under this clause (iv) in respect of such
Unitholder's Class L Common Units in an amount equal to the aggregate Unreturned
Capital with respect to such Class L Common Unitholder's outstanding Class L
Common Units immediately prior to such Distribution, and no Distribution or any
portion thereof shall be made under any of the other paragraphs below until the
entire amount of the Unreturned Capital with respect to the outstanding Class L
Common Units immediately prior to such Distribution has been paid in full;
(v) Fifth, to the Common Unitholders, an amount equal to the amount
of such Distribution that has not been distributed pursuant to paragraphs (i)
through (iv) of this Section 4.1(a) above (ratably among such Unitholders based
upon the number of outstanding Common Units held by each such Unitholder
immediately prior to such Distribution).
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(b) Notwithstanding anything to the contrary herein, to the extent
that funds are available to the Partnership, the Partnership shall, subject to
any restrictions contained in the financing agreements to which the Partnership
or any of its Affiliates is a party, distribute to each Unitholder within 75
days after the close of each Taxable Year (or at such earlier times and in such
amounts as determined in good faith by the General Partner to be appropriate to
enable the Unitholder to pay estimated income tax liabilities) an amount equal
to 46% (or, at the General Partner's sole discretion such greater or lesser
percentage as the General Partner may determine in good faith from time to time,
to represent the sum of the maximum marginal federal, state and local income tax
rates applicable to all Unitholders or their partners or stockholders, if
applicable) of:
(i) the Profits for such Taxable Year allocated to such Unitholder
pursuant to Section 4.2 and 4.3, reduced, at the discretion of
the General Partner, by
(ii) the sum of (x) the Losses for such Taxable Year allocated to such
Unitholder pursuant to Sections 4.2 and 4.3 and (y) the excess of
the aggregate Losses over the aggregate Profits for all prior
Taxable Years allocated to such Unitholder pursuant to Sections
4.2 and 4.3, but only to the extent that such excess Losses have
not expired unused pursuant to applicable Code provisions.
Distributions made pursuant to Section 4.1(b) shall be treated as
Distributions made pursuant to Section 4.1(a); provided that any distribution to
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a Partner pursuant to Section 4.1(b) which exceeds the amount that would have
been distributed to such Partner had the amount distributed pursuant to Section
4.1(b) been distributed pursuant to Section 4.1(a) shall be treated as an
advance distribution under Section 4.1(a) and shall be offset against subsequent
distributions such Partner would otherwise be entitled to receive pursuant to
Section 4.1(a), or, to the extent that such subsequent distributions are not
available prior to the liquidation of the Partnership, the amount of any such
advance which was not so offset shall be repaid by such Partner to the
Partnership at such time.
(c) The ordering and priority rules set forth in Section 4.1(a) with
respect to Distributions from the Partnership shall become effective immediately
after the Partnership has been reorganized pursuant to the terms of the
Recapitalization Agreement.
4.2 ALLOCATIONS.
(a) Except as otherwise provided in Section 4.3 and paragraphs (d) and
(e) below, Profits and Losses for any Fiscal Year shall be allocated among the
Unitholders in such a manner that, as of the end of such Fiscal Year, the sum of
(i) the Capital Account of each Unitholder, (ii) such Unitholder's share of
Minimum Gain (as determined according to Treasury Regulation Section 1.704-2(g))
and (iii) such Unitholder's partner nonrecourse debt minimum gain (as defined in
Treasury Regulation Section 1.704-2(i)(3)) shall be equal to the respective net
amounts, positive or negative, which would be distributed to them or for which
they would be liable to the Partnership under the Pennsylvania Act, determined
as if the Partnership were to (i) liquidate the assets of the
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Partnership for an amount equal to their Book Value and (ii) distribute the
proceeds of liquidation pursuant to Section 13.3.
(b) For purposes of this Section 4.2, but subject to the provisions of
Sections 4.3 and 4.5, if Profits exceed Losses for a Fiscal Year, (i) Losses
shall first be allocated to Unitholders whose Capital Accounts are to be reduced
as a result of the allocations under Section 4.2(a), in an amount equal to the
amount by which such Capital Accounts need to be reduced and (ii) Profits and
any remaining Losses shall be allocated to Unitholders whose Capital Accounts
are to be increased as a result of the allocations under Section 4.2(a), in the
proportion that the amount of the increase in such Unitholder's Capital Accounts
as a result of the allocations under Section 4.2(a) bears to the aggregate
amount of the increase in all such Unitholders' Capital Accounts as a result of
the allocations under Section 4.2(a).
(c) For purposes of this Section 4.2, but subject to the provisions of
Sections 4.3 and 4.5, if Losses exceed Profits for a Fiscal Year, (i) Profits
shall first be allocated to Unitholders whose Capital Accounts are to be
increased as a result of the allocations under Section 4.2(a), in an amount
equal to the amount by which such Capital Accounts need to be increased and (ii)
Losses and any remaining Profits shall be allocated to Unitholders whose Capital
Accounts are to be reduced as a result of the allocations under Section 4.2(a),
in the proportion that the amount of the reduction in such Unitholders' Capital
Accounts as a result of the allocations under Section 4.2(a) bears to the
aggregate amount of the reduction in all such Unitholders' Capital Accounts as a
result of the allocations under Section 4.2(a).
(d) Distributions made pursuant to Section 4.1(a)(i) shall be treated
as guaranteed payments pursuant to Code Section 707(c) in the year in which such
Distributions are made and shall not be reflected in the respective Capital
Account balances of the Class A Preferred Unitholders.
(e) The General Partner is specifically authorized, in its discretion,
to allocate Losses to any Unitholder who is an employee of the Partnership (or
any Partnership Affiliate) or a member of the Board of Managers of the General
Partner to the extent such Unitholder recognizes taxable income in connection
with any investment by such Unitholder in the Partnership, in an amount equal to
such recognized taxable income.
4.3 SPECIAL ALLOCATIONS.
(a) Losses attributable to partner nonrecourse debt (as defined in
Treasury Regulation Section 1.704-2(b)(4)) shall be allocated in the manner
required by Treasury Regulation Section 1.704-2(i). If there is a net decrease
during a Taxable Year in partner nonrecourse debt minimum gain (as defined in
Treasury Regulation Section 1.704-2(i)(3)), Profits for such Taxable Year (and,
if necessary, for subsequent Taxable Years) shall be allocated to the
Unitholders in the amounts and of such character as determined according to
Treasury Regulation Section 1.704-2(i)(4).
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(b) Nonrecourse deductions (as determined according to Treasury
Regulation Section 1.704-2(b)(1)) for any Taxable Year shall be allocated to
each holder of Common Units ratably among such Unitholders based upon the number
of outstanding Common Units held by each such Unitholder immediately prior to
such allocation. Except as otherwise provided in Section 4.3(a), if there is a
net decrease in the Minimum Gain during any Taxable Year, each Unitholder shall
be allocated Profits for such Taxable Year (and, if necessary, for subsequent
Taxable Years) in the amounts and of such character as determined according to
Treasury Regulation Section 1.704-2(f). This Section 4.3(b) is intended to be a
minimum gain chargeback provision that complies with the requirements of
Treasury Regulation Section 1.704-2(f), and shall be interpreted in a manner
consistent therewith.
(c) If any Unitholder that unexpectedly receives an adjustment,
allocation or distribution described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as of the
end of any Taxable Year, computed after the application of Sections 4.3(a) and
4.3(b) but before the application of any other provision of this Article IV,
then Profits for such Taxable Year shall be allocated to such Unitholder in
proportion to, and to the extent of, such Adjusted Capital Account Deficit.
This Section 4.3(c) is intended to be a qualified income offset provision as
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted in a manner consistent therewith.
(d) Profits and Losses described in Section 3.3(b)(v) shall be
allocated in a manner consistent with the manner that the adjustments to the
Capital Accounts are required to be made pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(j), (k) and (m).
(e) If, and to the extent that, any Unitholder is deemed to recognize
any item of income, gain, loss, deduction or credit as a result of any
transaction between such Unitholder and the Partnership pursuant to Code
Sections 1272-1274, 7872, 483, 482 or any similar provision now or hereafter in
effect, and the General Partner determines that any corresponding Profit or Loss
of the Partnership should be allocated to the Unitholder who recognized such
item in order to reflect the Unitholder's economic interests in the Partnership,
then the General Partner may so allocate such Profit or Loss.
4.4 TAX ALLOCATIONS.
(a) The income, gains, losses, deductions and credits of the
Partnership will be allocated, for federal, state and local income tax purposes,
among the Unitholders in accordance with the allocation of such income, gains,
losses, deductions and credits among the Unitholders for computing their Capital
Accounts; except that if any such allocation is not permitted by the Code or
other applicable law, the Partnership's subsequent income, gains, losses,
deductions and credits will be allocated among the Unitholders so as to reflect
as nearly as possible the allocation set forth herein in computing their Capital
Accounts.
(b) Items of Partnership taxable income, gain, loss and deduction with
respect to any property contributed to the capital of the Partnership shall be
allocated among the Unitholders
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in accordance with Code Section 704(c) so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its Book Value.*
(c) If the Book Value of any Partnership asset is adjusted pursuant to
the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f)
subsequent allocations of items of taxable income, gain, loss and deduction with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Book Value in the
same manner as under Code Section 704(c).
(d) Allocations of tax credits, tax credit recapture, and any items
related thereto shall be allocated to the Unitholders according to their
interests in such items as determined by the General Partner taking into account
the principles of Treasury Regulation Section 1.704-1(b)(4)(ii).
(e) Any adjustment under Section 481(a) of the Code attributable to
the Partnership's adoption of the accrual method of accounting for the taxable
year ending December 31, 1998 shall be allocated solely to Anthony Iron & Metals
Co. (or its successor).
(f) Allocations pursuant to this Section 4.4 are solely for purposes
of federal, state and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or share of Profits,
Losses, Distributions or other Partnership items pursuant to any provision of
this Agreement.
4.5 CURATIVE ALLOCATIONS. The allocations set forth in Section 4.3
(the "Regulatory Allocations") are intended to comply with certain requirements
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of Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory
Allocations may not be consistent with the manner in which the Unitholders
intend to allocate Profit and Loss of the Partnership or make Partnership
distributions. Accordingly, notwithstanding the other provisions of this
Article IV, but subject to the Regulatory Allocations, income, gain, deduction,
and loss shall be reallocated among the Unitholders so as to eliminate the
effect of the Regulatory Allocations and thereby cause the respective Capital
Accounts of the Unitholders to be in the amounts (or as close thereto as
possible) they would have been if Profit and Loss (and such other items of
income, gain, deduction and loss) had been allocated without reference to the
Regulatory Allocations. In general, the Unitholders anticipate that this will
be accomplished by specially allocating other Profit and Loss (and such other
items of income, gain, deduction and loss) among the Unitholders so that the net
amount of the Regulatory Allocations and such special allocations to each such
Unitholder is zero. In addition, if in any Fiscal Year or Fiscal Period there
is a decrease in partnership minimum gain, or in partner nonrecourse debt
minimum gain, and application of the minimum gain chargeback requirements set
forth in Section 4.3(a) or Section 4.3(b) would cause a distortion in the
economic arrangement among the Unitholders, the Unitholders may, if they do not
expect that the Partnership will have sufficient other income to correct such
distortion, request the Internal Revenue Service to waive either or both of such
minimum gain chargeback requirements. If such request is granted, this
Agreement shall be applied in such instance as if it did not contain such
minimum gain chargeback requirement.
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4.6 INDEMNIFICATION AND REIMBURSEMENT FOR PAYMENTS ON BEHALF OF A
UNITHOLDER. Except as otherwise provided in Section 15.11, if the Partnership
is obligated to pay any amount to a Governmental Entity (or otherwise makes a
payment to a Governmental Entity) that is specifically attributable to a
Unitholder or a Unitholder's status as such (including federal withholding
taxes, state personal property taxes, and state unincorporated business taxes),
then such Person shall indemnify the Partnership in full for the entire amount
paid (including interest, penalties and related expenses). The General Partner
may offset Distributions to which a Person is otherwise entitled under this
Agreement against such Person's obligation to indemnify the Partnership under
this Section 4.6. A Unitholder's obligation to make contributions to the
Partnership under this Section 4.6 shall survive the termination, dissolution,
liquidation and winding up of the Partnership, and for purposes of this Section
4.6, the Partnership shall be treated as continuing in existence. The
Partnership may pursue and enforce all rights and remedies it may have against
each Unitholder under this Section 4.6, including instituting a lawsuit to
collect such contribution with interest calculated at a rate equal to the Base
Rate plus three percentage points per annum (but not in excess of the highest
rate per annum permitted by law).
ARTICLE V
MANAGEMENT
5.1 AUTHORITY OF GENERAL PARTNER. Except for situations in which the
approval of the Partners is specifically required by this Agreement, but subject
to any applicable provisions of the Securityholders Agreement and the rights of
the Limited Partners to remove the General Partner pursuant to Section 12.2 (a)
the General Partner shall conduct, direct and exercise full control over all
activities of the Partnership and (b) all management powers over the business
and affairs of the Partnership shall be exclusively vested in the General
Partner. Without limiting the generality of the foregoing, subject to the
Securityholders Agreement, (i) the General Partner shall have sole and complete
discretion in determining whether to issue Equity Securities, the number of
Equity Securities to be issued at any particular time, the Capital Contribution
or purchase price for any Equity Securities issued, and all other terms and
conditions governing the issuance of Equity Securities and (ii) subject to the
provisions of Section 13.9, the General Partner may in its sole and complete
discretion enter into, approve, and consummate any merger, consolidation, sale
of all or any part of its assets, Liquidity Event or other extraordinary
transaction, and execute and deliver on behalf of the Partnership or the
Unitholders any agreement, document and instrument in connection therewith
(including amendments, if any, to this Agreement or adoptions of new constituent
documents) without the approval or consent of any Unitholder. No Limited Partner
shall have the authority to bind the Partnership, unless such authority has been
granted to such Limited Partner by the General Partner.
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5.2 ACTIONS REQUIRING APPROVAL OF LIMITED PARTNERS. Nothing in
Section 5.1 shall give the General Partner the authority to take any action
requiring the approval of the Limited Partners pursuant to Sections 9.1 and 9.2
without obtaining such approval.
5.3 PARTNERSHIP QUALIFICATIONS AND FILINGS. The General Partner
shall cause to be filed such other certificates or documents as may be
determined by the General Partner in its sole discretion to be necessary or
appropriate for the continuation, qualification and operation of a limited
partnership in the State of Pennsylvania and any other jurisdiction in which the
Partnership may elect to do business. Subject to applicable law, the General
Partner may omit from any and all filings in, and reports to, any state, and
from all amendments thereto, the names and addresses of the Partners,
information relating to the Partners' Capital Contributions and shares of
Profits, Losses and information relating to compensation of the Partners, or may
state such information in the aggregate rather than with respect to each
individual Partner. The General Partner shall not be required to deliver or
mail a copy of the Certificate of Limited Partnership or any amendment thereto
to any Limited Partner. Notwithstanding any of the foregoing provisions, the
General Partner shall on a timely basis make all reports or filings which are
necessary to preserve the limited liability of the Limited Partners under
applicable law.
5.4 RELIANCE BY THIRD PARTIES. Any other provision of this Agreement
to the contrary notwithstanding, no lender or purchaser (including any purchaser
of property from the Partnership) or other Person dealing with the Partnership,
shall be required to verify any representation by the General Partner as to the
extent of the interest in the assets of the Partnership that the General Partner
is entitled to encumber, sell or otherwise use. Any such lender, purchaser or
other Person shall be entitled to rely exclusively on the representations of the
General Partner as to its authority to enter into such financing or sale
arrangements and shall be entitled to deal with the General Partner as if it
were the sole party in interest therein, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies that may be
available against such lender, purchaser or other Person to contest, negate or
disaffirm any action of the General Partner in connection with any sale or
financing. In no event shall any person dealing with the General Partner or the
General Partner's representative with respect to any business or property of the
Partnership be obligated to inquire into the necessity or expedience of any act
or action of the General Partner or the General Partner's representative. Every
contract, agreement, deed, mortgage, security agreement, promissory note or
other instrument or document executed by the General Partner or the General
Partner's representative with respect to any business or property of the
Partnership shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of the execution or
delivery thereof this Agreement was in full force and effect, (b) such
instrument or document was duly executed according to this Agreement and is
binding upon the Partnership and (c) the General Partner or the General
Partner's representative was duly authorized and empowered to execute and
deliver any and every such instrument or document for and on behalf of the
Partnership.
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5.5 COMPENSATION AND REIMBURSEMENT OF GENERAL PARTNER.
(a) Except as provided in this Section 5.5 or elsewhere in this
Agreement, the General Partner shall not be compensated for its services as
General Partner to the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis for (i)
all actual out-of-pocket expenses, disbursements and advances it pays or incurs
in connection with the formation and business of the Partnership, including all
expenses, disbursements and advances for legal, accounting, printing and banking
matters, consultants and other third parties, reasonable travel expenses, and
filing fees, and (ii) that portion of the General Partner's legal and accounting
expenses, telephone, secretarial, travel and entertainment expenses, office rent
and other office expenses, salaries and other compensation expenses of
employees, and other expenses necessary or appropriate to the conduct of the
Partnership's business which is properly allocable to the Partnership. The
General Partner shall determine the expenses which are allocable to the
Partnership in a reasonable manner.
5.6 OUTSIDE ACTIVITIES.
(a) The General Partner, its Affiliates and each of their respective
stockholders, directors, officers, controlling persons, partners and employees
may have business interests and engage in business activities in addition to
those relating to the Partnership, except as otherwise agreed by such parties.
Neither the Partnership nor any Partner shall have any rights by virtue of this
Agreement or the partnership relationship created hereby in any such business
interests or activities of any such Person. The General Partner shall devote to
the management of the Partnership only such time as it determines is necessary
or appropriate to cause the affairs of the Partnership to be conducted in an
efficient and businesslike manner.
(b) No Affiliate of the General Partner shall be obligated to present
any particular investment or business opportunity to the Partnership even if the
opportunity is of a character which, if presented to the Partnership, could be
undertaken by the Partnership. Each Affiliate of the General Partner shall have
the right to undertake any such opportunity for itself for its own account or on
behalf of another or to recommend any such opportunity to other Persons.
5.7 LOANS AND GUARANTEES BY THE GENERAL PARTNER. The General Partner
or any of its Affiliates may lend to the Partnership funds needed by the
Partnership for such periods of time as the General Partner may determine;
provided that the terms of any such loan shall not be less favorable to the
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Partnership than would be available to the Partnership (without reference to the
General Partner's financial condition or guaranties) from unrelated lenders. In
addition, the General Partner may guarantee the payment or collection of any
amounts owed by the Partnership.
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5.8 DETERMINATIONS BY THE GENERAL PARTNER.
(a) Whenever this Agreement or any other agreement contemplated
herein provides that the General Partner shall act in a manner which is, or
provide terms which are, fair and reasonable to the Partnership or any Limited
Partner, the General Partner shall determine such appropriate action or provide
such terms considering, in each case, the relative interests of each party to
such agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable United States generally accepted accounting practices or principles.
(b) So long as the General Partner acts in good faith, the
resolution, action or terms so made, taken or provided by the General Partner
shall not constitute a breach of this Agreement or any other agreement
contemplated herein.
5.9 PURCHASE OF UNITS. The General Partner may cause the Partnership
to purchase or otherwise acquire Units, or may purchase or otherwise acquire
Units on behalf of the Partnership. As long as such Units are owned by or on
behalf of the Partnership, such Units shall not be considered outstanding for
any purpose. The General Partner and its Affiliates may also purchase or
otherwise acquire, or sell or otherwise dispose of, Units for their own account
(or as agent) and shall be entitled to exercise all rights of a Limited Partner
with respect to such Units.
5.10 INDEMNIFICATION.
(a) The Partnership shall indemnify and hold harmless the General
Partner and each Affiliate, officer, director, controlling person, partner,
employee or shareholder of the General Partner ("Indemnified Person") from and
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against any and all losses, claims, damages, liabilities, expenses (including
reasonable legal fees and expenses), judgments, fines, settlements and other
amounts relating to any and all claims, demands, actions, suits or proceedings,
whether civil, criminal, administrative or investigative, which relate in any
way to the General Partner's status or activities of the General Partner or to
the Partnership's property, business or affairs ("Claims"). An Indemnified
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Person's expenses paid or incurred in defending itself against any Claim shall
be reimbursed as paid or incurred. A Person shall be considered an Indemnified
Person whether or not such Person has the status required to be an Indemnified
Person at the time any such Claim is made or maintained as long as such person
had the status of an Indemnified Person at the time the events which gave rise
to the Claim occurred. This Section 5.10 shall not apply with respect to any
Indemnified Person for that portion of any Claim determined by the final
decision (from which an appeal cannot be taken or is not taken on a timely
basis) of a court of competent jurisdiction to have been caused by his or its
gross negligence, willful misconduct or knowing violation of law. Any payments
made to or on behalf of a Person who is later determined not to be entitled to
such payments shall be refunded to the Partnership promptly following such
determination. Nothing contained in this Section 5.10 shall obligate any
Limited Partner to pay any amount to the Partnership or to any Indemnified
Person in excess of his Capital Contribution.
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(b) The right to indemnification and the advancement of expenses
conferred in this Section 5.10 shall not be exclusive of any other right which
any Person may have or hereafter acquire under any statute, agreement, vote of
Partners or otherwise.
(c) The Partnership may maintain insurance, at its expense, to
protect any Person against any expense, liability or loss, to the extent that
the Partnership would have the power to indemnify such Person against such
expense, liability or loss under the Pennsylvania Act.
5.11 LIMITATION OF LIABILITY. Except as provided in Section
5.10, an Indemnified Person shall not be liable to the Partnership or any
Partner for any act or omission performed or omitted by such Person pursuant to
authority granted to such Person by this Agreement; provided that such
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limitation of liability shall not apply to the extent the act or omission was
attributable to such Person's negligence, willful misconduct or knowing
violation of law. The General Partner may exercise any of the powers granted to
it by this Agreement and perform any of the duties imposed upon it hereunder
either directly or by or through its agents, and the General Partner shall not
be responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner (so long as such agent was selected in good
faith and with due care) to the extent that such agent's misconduct or
negligence is not caused by and does not arise out of the General Partner's
misconduct or negligence in supervising the activities of such agent.
ARTICLE VI
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
6.1 LIMITATION OF LIABILITY. Except as provided in this Agreement or
in the Pennsylvania Act, the Limited Partners shall have no liability to the
Partnership or any other Partner.
6.2 MANAGEMENT OF BUSINESS. Except for a Limited Partner's right to
vote in Section 9.1(a) and to vote for the removal of the General Partner
pursuant to Section 12.2, no Limited Partner shall take part in the operation,
management or control (within the meaning of the Pennsylvania Act) of the
Partnership's business or transact any business in the Partnership's name,
unless such Limited Partner is a Person employed or engaged to transact any such
business by or on behalf of the General Partner or the Partnership. The
transaction of any such business by a Limited Partner employed or engaged to do
so by or on behalf of the General Partner or the Partnership shall not be deemed
to constitute participation in control of the Partnership and shall not affect,
impair or eliminate the limitations on the liability of a Limited Partner under
this Agreement.
6.3 NO RIGHT OF PARTITION. No Limited Partner shall have the right
to seek or obtain partition by court decree or operation of law of any
Partnership property, or the right to own or use particular or individual assets
of the Partnership.
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6.4 OUTSIDE ACTIVITIES.
(a) A Limited Partner, its Affiliates and each of their respective
stockholders, directors, officers, controlling persons, partners and employees
may have business interests and engage in business activities in addition to
those relating to the Partnership, except as otherwise agreed by such parties.
Neither the Partnership nor any of the other Limited Partners shall have any
rights by virtue of this Agreement in any business ventures of any Limited
Partner.
(b) No Affiliate of a Limited Partner or any of its respective
stockholders, directors, officers, controlling persons, partners and employees
shall be obligated to present any particular investment or business opportunity
to the Partnership even if the opportunity is of a character which, if presented
to the Partnership, could be undertaken by the Partnership. The Affiliates of a
Limited Partner and its respective stockholders, directors, officers,
controlling persons, partners and employees shall have the right to undertake
any such opportunity for itself for its own account or on behalf of another or
to recommend any such opportunity to other Persons.
ARTICLE VII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
7.1 RECORDS AND ACCOUNTING. The Partnership shall keep, or cause to
be kept, appropriate books and records with respect to the Partnership's
business, including all books and records necessary to provide any information,
lists and copies of documents required to be provided pursuant to Section 7.3 or
pursuant to applicable laws. All matters concerning (a) the determination of
the relative amount of allocations and distributions among the Unitholders
pursuant to Articles III and IV and (b) accounting procedures and
determinations, and other determinations not specifically and expressly provided
for by the terms of this Agreement, shall be determined by the General Partner,
whose determination shall be final and conclusive as to all of the Unitholders
absent manifest clerical error.
7.2 FISCAL YEAR. The Fiscal Year of the Partnership shall end on
December 31 of each year or such other annual accounting period as may be
established by the General Partner.
7.3 REPORTS.
(a) The Partnership shall deliver or cause to be delivered to each
Partner, within 120 days after the end of each Fiscal Year, an annual report
containing the following:
(i) consolidated statements of income and cash flows of the
Partnership and its Subsidiaries for such Fiscal Year, and a
consolidated balance sheet of the Partnership and its
Subsidiaries as of the end of such Fiscal Year, all prepared in
accordance with generally accepted accounting principals,
consistently applied, and audited by an independent accounting
firm of
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recognized national standing and a copy of such firm's annual
management letter regarding internal controls and other matters
to the General Partner;
(ii) a statement of changes in the Partner's equity and the Partner's
Capital Account balance for such Fiscal Year; and
(iii) a general description of the Partnership's activities during
such Fiscal Year.
(b) The Partnership shall, to the extent required by the
Pennsylvania Act, deliver or cause to be delivered to each Unitholder with
reasonable promptness, such other information and financial data concerning the
Partnership and its Subsidiaries as any Unitholder shall from time to time
reasonably request; provided that furnishing such information shall not be
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financially burdensome on the Partnership, the General Partner or their
Subsidiaries or unreasonably time consuming for the employees of the
Partnership, the General Partner or their Subsidiaries.
(c) The Partnership shall use reasonable efforts to deliver or cause
to be delivered, within 75 days after the end of each Fiscal Year, to each
Person who was a Unitholder at any time during such Fiscal Year all information
necessary for the preparation of such Person's United States federal and state
income tax returns.
7.4 TRANSMISSION OF COMMUNICATIONS. Each Person that owns or
controls Units on behalf of, or for the benefit of, another Person or Persons
shall be responsible for conveying any report, notice or other communication
received from the General Partner to such other Person or Persons.
ARTICLE VIII
TAX MATTERS
8.1 PREPARATION OF TAX RETURNS. The Partnership shall arrange for
the preparation and timely filing of all returns required to be filed by the
Partnership.
8.2 TAX ELECTIONS. The Taxable Year shall be the Fiscal Year set
forth in Section 7.2. The General Partner shall, in its sole discretion,
determine whether to make or revoke any available election pursuant to the Code;
provided that upon the request of any Partner, the Partnership shall make a Code
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Section 754 election. Each Unitholder will upon request supply any information
necessary to give proper effect to such election. The General Partners shall
not make an election pursuant to Treasury Regulation 301.7701-1 to be taxed as
an association.
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8.3 TAX CONTROVERSIES.
(a) subject to Section 8.3(b) below, the General Partner is hereby
designated the Tax Matters Partner and is authorized and required to represent
the Partnership (at the Partnership's expense) in connection with all
examinations of the Partnership's affairs by tax authorities, including
resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and reasonably incurred in connection therewith.
Each Unitholder agrees to cooperate with the Partnership and to do or refrain
from doing any or all things reasonably requested by the Partnership with
respect to the conduct of such proceedings. The Tax Matters Partners shall keep
all Unitholders fully informed of the progress of any examinations, audits or
other proceedings, and all Unitholders shall have the right to participate in
any such examinations, audits or other proceedings. Notwithstanding the
foregoing, the Tax Matters Partners shall not settle or otherwise compromise any
issue in any such examination, audit or other proceeding without first obtaining
approval of the Partners holding a majority of the Common Units.
(b) With respect to all taxable periods ending on or before December
31, 1997 ("Pre-1998 Tax Periods"), Anthony Iron and Metal Company (or its
--------------------
successor) will assume all the responsibilities and obligations of the Tax
Matter Partner, and is authorized to represent the Partnership and/or any
Affiliates of the Partnership during any pre-1998 Tax Period (at the
Partnership's expense) in connection with all examinations of the Partnership's
affairs by tax authorities with respect to Pre-1998 Tax Periods, including
resulting administrative and judicial proceedings, provided that AIM shall not
settle or otherwise compromise any issue in any such examination without the
consent of the General Partner, which consent shall not be unreasonably
withheld.
ARTICLE IX
VOTING; AMENDMENTS
9.1 VOTING RIGHTS.
(a) This Agreement provides for voting rights in favor of the
Partners. With respect to any vote of the Partners, each Partner shall be
entitled to one vote for each Common Unit held by such Partner.
(b) Anything herein to the contrary notwithstanding, the Partners may
dissolve the Partnership upon the affirmative vote of the Partners owning of a
majority of the Common Units.
(c) At the General Partner's election, any action that may be taken
at a Partners' meeting may be taken without a meeting if the General Partner
solicits written consents to the action, and if within 90 days after delivery of
the request for written consents, such consents are received
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from Partners owning not less than the minimum number of Units that would be
necessary to authorize or take such action at a meeting. A written consent to
the taking of any action shall have no force and effect if it is received more
than 90 days after the date of the General Partner's delivery of the written
request soliciting consents to such action. The General Partner shall be solely
responsible for conducting the solicitation of consents and for determining the
validity and effect of responses to the solicitation.
(d) With respect to Units that are held for a Person's account by
another Person (such as a broker, dealer, bank, trust company or clearing
corporation, or an agent of any of the foregoing) in whose name ownership is
registered, the Partnership may assume without inquiry that such broker, dealer
or other agent, in exercising any right in respect of such Units on any matter,
is exercising such rights according to the direction of the Person on whose
behalf such broker, dealer or other agent is holding such Units.
9.2 AMENDMENTS.
(a) The General Partner (pursuant to its powers of attorney from the
Limited Partners as provided in Section 15.1), without the consent of any
Limited Partner, may amend any provision of this Agreement, and execute, swear
to, acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
(i) a change in the name of the Partnership or the location of
the principal place of business of the Partnership;
(ii) the admission, substitution, removal or withdrawal of
Partners in accordance with this Agreement;
(iii) a change that in the General Partner's reasonable judgment
does not adversely affect any Unitholder in any material respect in its capacity
as an owner of Units and is either (A) necessary or desirable to satisfy any
requirements, conditions or guidelines contained in any opinion, directive,
order, ruling or regulation of any United States federal or state agency or
judicial authority or contained in any United States federal or state statute or
(B) required by this Agreement; or
(iv) a change that in the General Partner's reasonable judgment
does not adversely affect any Unitholder in any material respect in its capacity
as an owner of Units and (i) cures any ambiguity or (ii) corrects or supplements
any provisions in this agreement.
(b) In all cases other than those provided in Section 9.2(a) above,
this Agreement may be amended upon the consent of the General Partner and the
affirmative vote of the Partners owning a majority of the Common Units; provided
--------
that no such amendment or modification pursuant to this Section 9.2(b) that
would adversely affect holders of one class of Units in a manner different than
holders of any other class of Units (other than amendments and modifications in
connection with the actions of the General Partner permitted by Section 5.1),
shall be effective against the
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holders of such class of Units without the prior written consent of holders of
at least a majority of the Units of such class adversely affected thereby, and
provided further that no amendments will be made to Article IV or to Section
- -------- -------
13.3 without the consent of any Unitholder who is adversely affected by such an
amendment relative to other Unitholders.
ARTICLE X
TRANSFER OF PARTNERSHIP INTERESTS
10.1 TRANSFER IN GENERAL. THE TRANSFER OF ANY INTEREST IN THE
PARTNERSHIP IS SUBJECT TO THE RESTRICTIONS ON TRANSFER CONTAINED IN THE
SECURITYHOLDERS AGREEMENT, AS AMENDED OR MODIFIED FROM TIME TO TIME, AND, WITH
RESPECT TO UNITHOLDERS A PARTY THERETO, THE EXECUTIVE AGREEMENTS, WHICH
RESTRICTIONS ARE INCORPORATED HEREIN BY REFERENCE. IN ADDITION, NO UNITHOLDER
MAY TRANSFER ALL OR ANY PORTION OF SUCH UNITHOLDER'S INTEREST IN THE PARTNERSHIP
WITHOUT THE PRIOR WRITTEN CONSENT OF THE GENERAL PARTNER IF SUCH TRANSFER WOULD
(A) CAUSE THE PARTNERSHIP TO HAVE MORE THAN 100 PARTNERS WITHIN THE MEANING OF
TREASURY REGULATION SECTION 1.7704-1(H) OR (B) CAUSE THE PARTNERSHIP TO HAVE TO
REGISTER AS AN INVESTMENT PARTNERSHIP FOR PURPOSES OF THE INVESTMENT PARTNERSHIP
ACT OF 1940, AS AMENDED.
10.2 ASSIGNEE'S RIGHTS.
(a) A permitted transfer of a Partnership Interest shall be effective
as of the date of assignment and compliance with the conditions to such transfer
and such transfer shall be shown on the books and records of the Partnership.
Profits, Losses and other Partnership items shall be allocated between the
transferor and the Assignee according to Code Section 706. Distributions made
before the effective date of such transfer shall be paid to the transferor, and
Distributions made after such date shall be paid to the Assignee.
(b) Unless and until an Assignee becomes a Partner pursuant to
Article XI, the Assignee shall not be entitled to any of the rights granted to a
Partner hereunder or under applicable law, other than the rights granted
specifically to Assignees pursuant to this Agreement and to have the other
rights granted to Assignees pursuant to the Pennsylvania Act; provided that,
--------
without relieving the transferring Unitholder from any such limitations or
obligations as more fully described in Section 10.3, such Assignee shall be
bound by any limitations and obligations of a Unitholder contained herein that a
Partner would be bound on account of the Assignee's Partnership Interest
(including the obligation (if any) to make Capital Contributions on account of
such Partnership Interest).
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10.3 ASSIGNOR'S RIGHTS AND OBLIGATIONS. Any Partner who shall
transfer any Units or other interest in the Partnership shall cease to be a
Partner with respect to such Units or other interest and shall no longer have
any rights or privileges of a Partner with respect to such Units or other
interest (it being understood, however, that the applicable provisions of
Section 6.1 shall continue to inure to such Person's benefit), except that
unless and until the Assignee is admitted as a substituted Partner in accordance
with the provisions of Article XI (the "Admission Date"), (a) such assigning
--------------
Partner shall retain all of the duties, liabilities and obligations of a Partner
with respect to such Units or other interest, including, without limitation, the
obligation (together with its Assignee pursuant to Section 10.2(b)) to make and
return Capital Contributions on account of such Units or other interest pursuant
to the terms of this Agreement and (ii) the General Partner may, in its sole
discretion, reinstate all or any portion of the rights and privileges of such
Partner with respect to such Units or other interest for any period of time
prior to the Admission Date. Nothing contained herein shall relieve any Partner
who transfers any Units or other interest in the Partnership from any liability
of such Partner to the Partnership with respect to such Units or other interest
that may exist on the Admission Date or that is otherwise specified in the
Pennsylvania Act and incorporated into this Agreement or for any liability to
the Partnership or any other Person for any materially false statement made by
such Partner (in its capacity as such) in the Securityholders Agreement or an
Executive Agreement or for any present or future breaches of any
representations, warranties or covenants by such Partner (in its capacity as
such) contained herein or in the other agreements with the Partnership.
10.4 PROHIBITED TRANSFERS. Notwithstanding anything contained herein
to the contrary, no Partnership interest shall be transferred or assigned if
such transfer would result in the Partnership (i) being treated as a "publicly
traded partnership" within the meaning of Section 7704 of the Code, (ii) having
more than 100 partners, as determined for purposes of Treasury Regulation
Section 1.7704-1(h), or (iii) having more than 100 beneficial owners for
purposes of the Investment Company Act of 1940, as amended. For purposes of the
preceding sentence, the General Partner shall be permitted to rely on
representations and other documentation furnished by the transferor partner and
the transferee in connection with the proposed transfer.
ARTICLE XI
ADMISSION OF PARTNERS
11.1 SUBSTITUTED LIMITED PARTNERS. In connection with the transfer of a
Partnership Interest of a Limited Partner, a Person may request admission as a
Substituted Partner in a manner prescribed by the General Partner. Such Person
shall become a Substituted Partner on the date on which the General Partner
consents thereto and such admission is shown on the books and records of the
Partnership.
11.2 ADDITIONAL LIMITED PARTNERS. A Person may be admitted to the
Partnership as an Additional Partner only upon furnishing to the General Partner
(a) a letter of acceptance, in form
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satisfactory to the General Partner, of all the terms and conditions of this
Agreement, including the power of attorney granted in Section 15.1, and (b) such
other documents or instruments as may be necessary or appropriate to effect his
admission as a Limited Partner. Such admission shall become effective on the
date on which the General Partner determines in its sole discretion that such
conditions have been satisfied and when any such admission is shown on the books
and records of the Partnership.
11.3 ADMISSION OF A SUCCESSOR GENERAL PARTNER. A Person shall be admitted
as a Successor General Partner if and only if (a) the Person is the transferee
of all of the General Partner's General Partnership Interest in a transfer
permitted under the Securityholders Agreement or (b) the Person is elected to be
a Successor General Partner in the manner described in Section 12.3 or 13.2.
11.4 REPRESENTATIONS OF NEW PARTNERS. Each Person admitted to the
Partnership as a Substituted or Additional Limited Partner or as a General
Partner shall become a party to, and agree to be bound by, this Agreement and
shall make the representations contained in the Recapitalization Agreement
relating to the purchase of Units and such additional representations relating
to the matters contemplated by the Securityholders Agreement as the General
Partner may request.
ARTICLE XII
WITHDRAWAL OR REMOVAL OF PARTNERS
12.1 WITHDRAWAL OF GENERAL PARTNER. The General Partner shall not
withdraw as the Partnership's general partner except as follows:
(a) The General Partner shall be deemed to have withdrawn as the
Partnership's general partner upon the effective date of the transfer of all of
its General Partnership Interest in a transfer permitted under the
Securityholders Agreement.
(b) The General Partner shall have no right to withdraw as the
Partnership's general partner without the consent of the Partners owning a
majority of the Common Units. If permitted to withdraw as the Partnership's
general partner, the General Partner may withdraw by delivering a notice of
withdrawal to the Partners. Such notice shall state the effective date of the
General Partner's withdrawal, which date shall be not less than 90 days
subsequent to the date such notice is mailed and shall set forth rules and
procedures for the nomination and election of a Successor General Partner
pursuant to Section 12.3. Unless such notice is earlier revoked, the General
Partner shall be deemed to have withdrawn as the Partnership's general partner
upon the earlier of (i) the effective date stated in such notice or (ii) the
date a Successor General Partner is admitted to the Partnership pursuant to
Section 11.3.
(c) If the General Partner withdraws as the Partnership's general
partner in violation of this Section 12.1, the damages for which it may be held
liable under the Pennsylvania
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Act (or otherwise as a result of such withdrawal) shall be limited to the
forfeiture of its General Partnership Interest.
12.2 REMOVAL OF GENERAL PARTNER. The General Partner may be removed
at any time by the affirmative vote of Limited Partners which own a majority of
the Common Units then outstanding.
12.3 ELECTION OF SUCCESSOR GENERAL PARTNER. If the General Partner
withdraws from the Partnership pursuant to Section 12.1(b) or is removed
pursuant to Section 12.2, the Partners may elect a Successor General Partner as
the General Partner, by the affirmative vote of Limited Partners which own a
majority (or such greater percentage as required by applicable law) of the
Common Units which are owned by all Limited Partners. Any Person elected by the
Partners to be Successor General Partner shall be admitted to the Partnership as
Successor General Partner only upon the Partnership's receipt of a written
assumption by such Person of all of the General Partner's rights and obligations
hereunder (including the obligation to purchase the former General Partner's
Partnership Interest pursuant to Section 12.4). If a Successor General Partner
is admitted to the Partnership pursuant to this Section 12.3 on or before the
effective date specified in the General Partner's notice of withdrawal pursuant
to Section 12.1(b), such Successor General Partner shall continue the
Partnership's business according to this Agreement.
12.4 PURCHASE OF GENERAL PARTNER'S PARTNERSHIP INTEREST. Within 30
days following the admission of a Successor General Partner to the Partnership
pursuant to Section 12.3 or 13.2, the former General Partner may, at its option,
elect to sell its Partnership Interest to the Successor General Partner. Such
election shall be made by delivering to the Successor General Partner a written
notice reasonably indicating that the former General Partner is electing to sell
its Partnership Interest pursuant to this Section 12.4. If the former General
Partner properly makes such election, the Successor General Partner shall
purchase such interest from the former General Partner for a purchase price,
payable in cash, within 120 days after the effective date of the admission of
the Successor General Partner as General Partner, equal to the Fair Market Value
of the former General Partner's Interest as of the time of such General
Partner's withdrawal or removal. For purposes of determining the Fair Market
Value of the former General Partner's Interest, the Fair Market Value of the
Partnership's assets shall be determined according to Article XIV.
12.5 FORMER GENERAL PARTNER'S LIABILITIES. The General Partner shall
not be liable for Partnership debts and other liabilities and obligations of the
Partnership incurred after the effective date of the General Partner's removal
or withdrawal as General Partner, but shall continue to be liable for
Partnership debts and other liabilities and obligations of the Partnership
incurred before such effective date.
12.6 WITHDRAWAL OF LIMITED PARTNERS. No Limited Partner shall have
any right to withdraw from the Partnership without the prior written consent of
the General Partner. Upon a transfer of all of a Limited Partner's Units in a
transfer permitted by the Securityholders Agreement or Executive Agreements,
such Limited Partner shall cease to be a Limited Partner; provided that
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the transferor shall not be released from liability to the Partnership for (a)
any materially false statement made, or caused to be made, by such transferor in
the Certificate of Limited Partnership or (b) any obligation of such transferor
to contribute cash or other property to the Partnership.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
13.1 DISSOLUTION. The Partnership shall not be dissolved by the
admission of Additional Partners or Substituted Partners, by the admission of a
Successor General Partner, or by the withdrawal or removal of the General
Partner (if there is a Successor General Partner), or by the death, incapacity,
dissolution, bankruptcy, insolvency or termination of a Limited Partner. The
Partnership shall dissolve, and its affairs shall be wound up, upon:
(a) the affirmative vote of the Partners owning a majority of
the Common Units as provided in Section 9.1(a);
(b) the withdrawal or removal of the General Partner pursuant to
Section 12.1(b) or Section 12.2, respectively, if the Limited Partners have not
elected a Successor General Partner to continue the Partnership's business as
provided by Section 12.3;
(c) the insolvency or bankruptcy of the General Partner; or
(d) the occurrence of any event not specified in Section 13.1(b)
or (c) above that results in the General Partner ceasing to be the General
Partner under the Pennsylvania Act.
13.2 CONTINUATION AFTER DISSOLUTION. Within 90 days following a
dissolution of the Partnership pursuant to Section 13.1(c) or (d), pursuant to
rules and procedures established by the Liquidator pursuant to Section 13.3(b),
the Limited Partners may elect to reconstitute the Partnership and continue its
business according to this Agreement upon the admission to the Partnership of a
Successor General Partner elected by the affirmative vote of Limited Partners
which own a majority (or such greater percentage as required by applicable law)
of the Common Units. Any Person elected by the Limited Partners to be a
Successor General Partner shall be admitted to the Partnership as Successor
General Partner only upon the Partnership's receipt of a written assumption by
such Person of all of the former General Partner's rights and obligations
hereunder (including the obligation to purchase the General Partner's
Partnership Interest pursuant to Section 12.4). Unless a Successor General
Partner is admitted to the Partnership within 90 days after dissolution, the
Partnership shall be liquidated pursuant to Section 13.3. If a Successor General
Partner is admitted to the Partnership pursuant to this Section 13.2 within 90
days after dissolution, then:
(a) the reconstituted partnership shall continue until dissolved
according to this Article XIII; and
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(b) all necessary steps shall be taken to cancel this Agreement and
the Certificate of Limited Partnership and to enter into a new partnership
agreement and certificate of limited partnership, and the Successor General
Partner may for this purpose exercise the powers of attorney granted the General
Partner pursuant to Section 15.1; provided that the right of the Limited
--------
Partners set forth above to elect a Successor General Partner and to
reconstitute and to continue the business of the Partnership shall not exist and
may not be exercised unless the Partnership has received an opinion of counsel
that (i) the exercise of the right would not result in the loss of limited
liability of any Person who is a Limited Partner and (ii) neither the
Partnership nor the reconstituted partnership would be classified as other than
a partnership for United States federal income tax purposes upon the exercise of
such right to continue.
13.3 LIQUIDATION.
(a) Upon dissolution of the Partnership, the General Partner shall be
the liquidator (the "Liquidator"), unless and until a successor Liquidator is
----------
appointed as provided herein. The Liquidator shall agree not to resign at any
time without 30 days' prior written notice. The Liquidator, if other than the
General Partner, may be removed at any time, with or without cause, by notice of
removal and appointment of a successor Liquidator approved by the holders of a
majority of the Common Units. Within 30 days following the occurrence of any
Event of Withdrawal with respect to the Liquidator, a successor Liquidator may
be elected by the holders of a majority of the Class A Common Units. The
successor Liquidator shall succeed to all rights, powers and duties of the
former Liquidator. The right to appoint a successor or substitute Liquidator in
the manner provided herein shall be recurring and continuing for so long as the
functions and services of the Liquidator are authorized to continue under the
provisions hereof, and every reference herein to the Liquidator shall be deemed
to refer also to any such successor or substitute Liquidator appointed in the
manner herein provided. Except as expressly provided in this Article XIII, the
Liquidator appointed in the manner provided herein shall have and may exercise,
without further authorization or consent of any of the parties hereto, all of
the powers conferred upon the General Partner under the terms of this Agreement
(but subject to all of the applicable limitations, contractual and otherwise,
upon the exercise of such powers to the extent necessary or desirable in the
good faith judgment of the Liquidator to carry out the duties and functions of
the Liquidator hereunder for and during such period of time as shall be
reasonably required in the good faith judgment of the Liquidator to complete the
winding up and liquidation of the Partnership as provided for herein). The
Liquidator shall receive as compensation for its services (i) if the Liquidator
is the General Partner, the compensation and reimbursements specified in Section
5.5, or (ii) if the Liquidator is not the General Partner, a reasonable fee plus
out-of-pocket costs or such other compensation as the holders of a majority of
the Class A Common Units may approve.
(b) If the Partnership is dissolved pursuant to Section 13.1(c), the
Liquidator shall establish reasonable rules and procedures for the nomination
and election of a Successor General Partner pursuant to Section 13.2. Pending
such election, the Liquidator shall continue to operate the Partnership's
business in the ordinary course with a view to conserving the Partnership's
assets. If no Successor General Partner is admitted to the Partnership pursuant
to Section 13.2 within the time
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period specified therein, the Liquidator shall proceed with the liquidation of
the Partnership's assets as provided in Section 13.3(c).
(c) The Liquidator shall liquidate the assets of the Partnership
and apply and distribute the proceeds of such liquidation in the following order
of priority, unless otherwise required by mandatory provisions of applicable
law:
(i) First, to the payment of the Partnership's debts and
obligations to its creditors, including sales commissions and
other expenses incident to any sale of the assets of the
Partnership.
(ii) Second, to the establishment of and additions to such
reserves as the Liquidator may deem necessary or appropriate.
(iii) Third, to the Partners, in accordance with Section 4.1 and
the balances set forth in the Capital Accounts of the
Partners at such time.
The reserves established pursuant to subparagraph (ii) shall be paid over by the
Liquidator to a bank or other financial institution to be held in escrow for the
purpose of paying any such contingent or unforeseen liabilities or obligations
and, at the expiration of such period as the Liquidator deems advisable, such
reserves shall be distributed in the priorities set forth in this Section
13.3(c). The parties intend that the Distributions under this Section 13.3(c) be
in compliance with the provisions of Treasury Regulation Section 1.704-
1(b)(2)(ii)(b)(2), and this Section 13.3(c) shall always be interpreted in a
manner consistent with such provisions.
13.4 DISTRIBUTION IN KIND. Notwithstanding the provisions of Section 13.3
which require the liquidation of the assets of the Partnership, but subject to
the order of priorities set forth therein, if upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole discretion, defer for a reasonable
time the liquidation of any assets except those necessary to satisfy Partnership
liabilities (other than loans to the Partnership by Partners) and reserves, and
may, in its sole discretion, distribute to the Partners, in lieu of cash, as
tenants in common and in accordance with the provisions of Section 13.3(c),
undivided interests in such Partnership assets as the Liquidator deems not
suitable for liquidation. Any such Distributions in kind shall be subject to
such conditions relating to the disposition and management of such properties as
the Liquidator deems reasonable and equitable and to any agreements governing
the operating of such properties at such time. Any Partnership assets
distributed in kind shall first be written up or down to their Fair Market
Value, thus creating Profit or Loss (if any), which shall be allocated in
accordance with Section 4.2. The Liquidator shall determine the Fair Market
Value of any property distributed in accordance with the valuation procedures
set forth in Article XIV.
13.5 DEFICIT MAKEUP. No Partner shall have any obligation to make up any
deficit balance in its respective Capital Account, except as otherwise required
under the Pennsylvania Act.
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13.6 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP. Upon the
completion of the distribution of Partnership property as provided in Sections
13.3 and 13.4, the Partnership shall be terminated, and the Liquidator (or the
Limited Partners, if necessary) shall cause the cancellation of the Certificate
of Limited Partnership and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the Commonwealth of Pennsylvania
and shall take such other actions as may be necessary to terminate the
Partnership. The Partnership shall be deemed to continue in existence for all
purposes of this Agreement until it is terminated pursuant to this Section 13.6.
13.7 REASONABLE TIME FOR WINDING UP. A reasonable time shall be allowed
for the orderly winding up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 13.3 in order to minimize any
losses otherwise attendant upon such winding up.
13.8 RETURN OF CAPITAL. The Liquidator, as such, shall not be personally
liable for the return of Capital Contributions or any portion thereof (it being
understood that any such return shall be made solely from Partnership assets).
13.9 LIQUIDITY EVENT OR IPO.
(a) In the event that a Partner holding a majority of the Common
Units, or in the case of any such event which requires the approval of the
General Partner, the General Partner approves a Liquidity Event or IPO, the
Partnership and each of its Unitholders will work with Bain to structure such
Liquidity Event or IPO to maximize Bain's after-tax return to Bain's direct or
indirect partners in connection therewith, but only to the extent that such
structure is not materially detrimental to the Partnership or any other
Unitholder.
(b) Subject to the Securityholders Agreement, it is understood and
agreed that the following structures of a Liquidity Event or IPO are not
materially detrimental to the Partnership or any Partner and shall be utilized
by the Partnership and approved by the General Partner and each Unitholder if so
requested by Bain:
(i) Private Transaction. A Liquidity Event in which the person
-------------------
or persons purchasing the Partnership (the "Buyer") acquires
-----
separately each of the following:
(A) all Units other than Units held by Bain;
(B) all debt instruments issued by Bain;
(C) all options to acquire equity interests in Bain (which
options the Buyer will then exercise); and
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(D) all other equity interests in Bain (i.e., all interests not
acquired in clause (C) above).
(ii) Public Offering. An IPO under the following terms and in
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the following order:
(A) The Partnership will be incorporated in a manner described
in Code Section 351 (or successor provision), and in which
all Partners are eligible to be treated as direct or
indirect transferors under Code Section 351 (or successor
provision); and
(B) Bain will distribute its interests (i.e., shares) in the
Partnership to its securityholders. Any options to acquire
such interests (i.e., shares) will be exercised.
ARTICLE XIV
VALUATION
14.1 DETERMINATION. The Fair Market Value of the assets of the
Partnership or of a Partnership Interest in the Partnership will be determined
by the General Partner (or, if pursuant to Section 13.3, the Liquidator) in its
good faith judgement in such manner as its deems reasonable and using all
factors, information and data deemed to be pertinent.
14.2 DETERMINATION OF FAIR MARKET VALUE. "Fair Market Value" of (i) a
-----------------
specific Partnership asset will mean the amount which the Partnership would
receive in an all-cash sale of such asset in an arms-length transaction with an
unaffiliated third party consummated on the day immediately preceding the date
on which the event occurred which necessitated the determination of the Fair
Market Value (and after giving effect to any transfer taxes payable in
connection with such sale); and (ii) of the Partnership will mean the amount
which the Partnership would receive in an all-cash sale of all of its assets and
businesses as a going concern in an arms-length transaction with an unaffiliated
third party consummated on the day immediately preceding the date on which the
event occurred which necessitated the determination of the Fair Market Value
(assuming that such sale were accomplished pursuant to a Liquidity Event of the
type referred to in Section 13.9(b)(i) above and all of the proceeds from such
sale were paid directly to the Partnership other than an amount of such proceeds
necessary to pay transfer taxes payable in connection with such sale, which
amount will not be received or deemed received by the Partnership). After a
determination of the Fair Market Value of the Partnership is made as provided
above, the Fair Market Value of a Partnership Interest will be determined by
making a calculation reflecting the cash distributions which would be made to
the Unitholders in accordance with this Agreement if the Partnership were deemed
to have received such Fair Market Value in cash and then distributed the same to
the Unitholders in accordance with the terms of this Agreement incident to the
liquidation
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of the Partnership after payment to all of the Partnership's creditors from such
cash receipts and assuming that all of the convertible debt and other
convertible securities were repaid or converted (whichever yields more cash to
the holders of such convertible securities). Except as otherwise provided herein
or in any agreement, document or instrument contemplated hereby, any amount to
be paid under this Agreement by reference to the Fair Market Value shall be paid
in full in cash, and any Partnership Interest being transferred in exchange
therefor will be transferred free and clear of all Liens.
ARTICLE XV
GENERAL PROVISIONS
15.1 POWER OF ATTORNEY.
(a) Each Unitholder hereby constitutes and appoints the General
Partner and the liquidators, with full power of substitution, as his or its true
and lawful agent and attorney-in-fact, with full power and authority in his or
its name, place and stead, to: (i) execute, swear to, acknowledge, deliver, file
and record in the appropriate public offices (A) this Agreement, all
certificates and other instruments and all amendments thereof which the General
Partner deems appropriate or necessary to form, qualify, or continue the
qualification of, the Partnership as a limited partnership in the Commonwealth
of Pennsylvania and in all other jurisdictions in which the Partnership may
conduct business or own property; (B) all instruments which the General Partner
deems appropriate or necessary to reflect any amendment, change, modification or
restatement of this Agreement in accordance with its terms; (C) all conveyances
and other instruments or documents which the General Partner deems appropriate
or necessary to reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement, including a certificate of
cancellation; and (D) all instruments relating to the admission, withdrawal or
substitution of any Unitholder pursuant to Article X or XI; and (ii) sign,
execute, swear to and acknowledge all ballots, consents, approvals, waivers,
certificates and other instruments appropriate or necessary, in the reasonable
judgment of the General Partner, to evidence, confirm or ratify any vote,
consent, approval, agreement or other action which is made or given by the
Partners hereunder or is consistent with the terms of this Agreement and/or
appropriate or necessary (and not inconsistent with the terms of this
Agreement), in the reasonable judgment of the General Partner, to effectuate the
terms of this Agreement.
(b) The foregoing power of attorney is irrevocable and coupled with
an interest, and shall survive the death, disability, incapacity, dissolution,
bankruptcy, insolvency or termination of any Unitholder and the transfer of all
or any portion of his or its Partnership Interest and shall extend to such
Unitholder's heirs, successors, assigns and personal representatives.
15.2 TITLE TO PARTNERSHIP ASSETS. Partnership assets shall be deemed
to be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership
35
<PAGE>
interest in such Partnership assets or any portion thereof. Legal title to any
or all Partnership assets may be held in the name of the Partnership, the
General Partner or one or more nominees, as the General Partner may determine.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in its name or the name of any nominee shall be held
in trust by the General Partner or such nominee for the use and benefit of the
Partnership in accordance with the provisions of this Agreement. All Partnership
assets shall be recorded as the property of the Partnership on its books and
records, irrespective of the name in which legal title to such Partnership
assets is held.
15.3 ADDRESSES AND NOTICES. Any notice, demand, request or report
required or permitted to be given or made to any Person under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class mail or by other commercially reasonable means of
written communication to the Person at his address as shown on the Partnership's
books and records. An affidavit or certificate of mailing executed by the
General Partner shall be conclusive (but not exclusive) evidence of the date and
fact of mailing of any such notice, demand, request or report. Any notice to
the General Partner or the Partnership shall be deemed given if received by the
General Partner at the principal office of the Partnership designated pursuant
to Section 2.5.
15.4 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.
15.5 CREDITORS. None of the provisions of this Agreement shall be
for the benefit of or enforceable by any creditors of the Partnership or any of
its Affiliates, and no creditor who makes a loan to the Partnership or any of
its Affiliates may have or acquire (except pursuant to the terms of a separate
agreement executed by the Partnership in favor of such creditor) at any time as
a result of making the loan any direct or indirect interest in Partnership
Profits, Losses, Distributions, capital or property other than as a creditor.
15.6 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition.
15.7 COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which together shall
constitute one and the same agreement binding on all the parties hereto.
15.8 APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the Commonwealth of Pennsylvania
36
<PAGE>
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the Commonwealth of Pennsylvania.
15.9 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
15.10 FURTHER ACTION. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking such actions
as may be necessary or appropriate to achieve the purposes of this Agreement.
15.11 EXPENSES. The Partnership shall pay, and hold the Investors
and their respective Affiliates harmless against liability for the payment of
(i) their out-of-pocket fees and expenses incurred in connection with this
Agreement and the transactions related hereto and contemplated hereby (including
legal expenses relating to this Agreement and the documents related hereto);
(ii) the reasonable fees and expenses incurred in connection with an investment
or acquisition by the Partnership or any of its Subsidiaries; (iii) the fees and
expenses incurred with respect to any amendments or waivers (whether or not the
same become effective) under or in respect of any of this Agreement or the
agreements referred to herein or contemplated hereby or thereby (including,
without limitation, in connection with any proposed merger, sale or
recapitalization of the Partnership or any of its Subsidiaries); (iv) stamp and
other taxes which may be payable in respect of the execution and delivery of
this Agreement or the issuance, delivery or acquisition of any Units; (v) the
fees and expenses incurred with respect to the enforcement of the rights granted
under any of this Agreement, the Units, and the other agreements referred to
herein or contemplated hereby or thereby; and (vi) the reasonable fees and
expenses incurred by each such Person in any filing with any Governmental Entity
with respect to its investment in the Partnership which mentions such Person.
So long as Bain/ACR, L.L.C., a Delaware limited liability company, holds any
Units, the Partnership shall pay and hold Bain/ACR, L.L.C., a Delaware limited
liability company, and their respective Affiliates harmless against liability
for the payment of the fees and expenses incurred with respect to the successful
enforcement of the rights granted under any of this Agreement, the Units, the
Securityholders Agreement and the Registration Rights Agreement.
15.12 OFFSET. Whenever the Partnership is to pay any sum to any
Unitholder or any Affiliate or related person thereof, any amounts that such
Unitholder or such Affiliate or related person owes to the Partnership may be
deducted from that sum before payment.
15.13 ENTIRE AGREEMENT. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements
37
<PAGE>
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
15.14 REMEDIES. Each Unitholder shall have all rights and remedies
set forth in this Agreement and all rights and remedies which such Person has
been granted at any time under any other agreement or contract and all of the
rights which such Person has under any law. Any Person having any rights under
any provision of this Agreement or any other agreements contemplated hereby
shall be entitled to enforce such rights specifically (without posting a bond or
other security), to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law.
15.15 DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the context, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa. The use of the word "including" in
this Agreement shall be by way of example rather than by limitation. Reference
to any agreement, document or instrument means such agreement, document or
instrument as amended or otherwise modified from time to time in accordance with
the terms thereof, and if applicable hereof. Without limiting the generality of
the immediately preceding sentence, no amendment or other modification to any
agreement, document or instrument that requires the consent of any Person
pursuant to the terms of this Agreement or any other agreement will be given
effect hereunder unless such Person has consented in writing to such amendment
or modification. Wherever required by the context, references to a Fiscal Year
shall refer to a portion thereof. The use of the words "or," "either" and "any"
shall not be exclusive. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement. Wherever a conflict exists between
this Agreement and any other agreement, this Agreement shall control but solely
to the extent of such conflict.
* * * * *
38
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed or caused to be executed
on their behalf this Amended and Restated Limited Partnership Agreement as of
the date first written above.
GENERAL PARTNER
---------------
ACR MANAGEMENT, L.L.C.
By: /s/ Andrew B. Balson
--------------------------------------
Its: Secretary
--------------------------------------
LIMITED PARTNERS
----------------
BAIN/ACR, L.L.C.
By: /s/ Robert C. Gay
--------------------------------------
Its: President
--------------------------------------
ANTHONY IRON AND METAL COMPANY
By: /s/ David W. Mahokey
--------------------------------------
Its: General Partner
--------------------------------------
/s/ David W. Mahokey
-----------------------------------------
David W. Mahokey
/s/ Arthur J. Innamorato
-----------------------------------------
Arthur J. Innamorato
/s/ Albert C. Bove
-----------------------------------------
Albert C. Bove
<PAGE>
Continuation of signature page of
Amended and Restated Limited
Partnership Agreement
/s/ William B. Kania
-----------------------------------------
William B. Kania
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION> Number
Number of Number of of Class
Class A Class L A
Capital Preferred Common Common Percentage
Name and Address Contributions Units Units Units Interest /1/
- ---------------- ------------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C>
GENERAL PARTNER:
ACR Management, 1.00%
L.L.C.
Two Copley Place
Boston, MA 02116
LIMITED PARTNERS:
Bain/ACR, L.L.C. 75.24%
Two Copley Place
Boston, MA 02116
Anthony Iron and Metal 17.82%
Company
David W. Mahokey 3.96%
Arthur J. Innamorato 0.99%
Albert C. Bove 0.99%
William B. Kania
--------- -------- ------- -------- ----------
========= ======== ======= ======== ==========
</TABLE>
_______________________
/1/ The number of partnership units to be issued will be completed at the
closing.
<PAGE>
SCHEDULE II
-----------
Adjusted Balance Sheet
<PAGE>
SCHEDULE III
------------
Adjusted Capital Account Balances
<PAGE>
EXHIBIT 3.3
CERTIFICATE OF INCORPORATION
OF
ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
-----
"Corporation") is: Anthony Crane Holdings Capital Corporation.
SECOND: The address, including street, number, city, and county, of
------
the registered office of the Corporation in the State of Delaware is 1013 Centre
Road, Wilmington, Delaware 19805, County of New Castle; and the name of the
registered agent of the Corporation in the State of Delaware at such address is
Corporation Service Company.
THIRD: The nature of the business and the purposes to be conducted
-----
and promoted by the Corporation, shall be to conduct any lawful business, to
promote any lawful purpose, and to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of stock which the Corporation
------
shall have authority to issue is One Thousand (1,000). The par value of all of
the shares of the Corporation shall be One Dollar ($1.00) per share. All such
shares are of one (1) class and are shares of Common Stock.
FIFTH: The name and the mailing address of the incorporator are as
-----
follows:
NAME MAILING ADDRESS
---- ---------------
Douglas C. Loviscky, Esq. Williams Coulson
Two Chatham Center, Suite 1500
Pittsburgh, PA 15219
SIXTH: The Corporation is to have perpetual existence.
-----
SEVENTH: The personal liability of the directors of the Corporation
-------
is hereby eliminated to the fullest extent permitted by the provisions of
paragraph (7) of subsection (b) of (S) 102 of the General Corporation Law of the
State of Delaware, as the same may be amended and supplemented.
<PAGE>
EIGHTH: The Corporation shall, to the fullest extent permitted by
------
the provisions of (S) 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities, or other matters referred to
in or covered by said section, and the indemnification provided for herein shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any Bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person.
NINTH: From time to time any of the provisions of this Certificate
-----
of Incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
Certificate of Incorporation are granted subject to the provisions of this
Article Ninth.
IN WITNESS WHEREOF, this Certificate of Incorporation has been duly
executed on July __, 1998.
/s/ Douglas C. Loviscky
---------------------------------------
Douglas C. Loviscky, Esq., Incorporator
2
<PAGE>
EXHIBIT 3.4
BY LAWS
OF
ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
(A DELAWARE CORPORATION)
-----------------------------
ARTICLE I
STOCKHOLDERS
------------
1. ISSUANCE OF STOCK. Issuance of stock after the initial capitalization
-----------------
will require the unanimous vote of all of the members of the Board of Directors.
Any vacancy of the Board of Directors must be filled prior to the issuance of
stock.
2. CERTIFICATES REPRESENTING STOCK. Certificates representing stock in
-------------------------------
the Corporation shall be signed by, or in the name of, the Corporation by the
Chairman or Vice-Chairman, if any, or by the President or a Vice-President and
by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation. Any or all the signatures on any such certificate
may be a facsimile. In case any officer, transfer agent, or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent, or registrar at the date of issue.
Whenever the Corporation shall be authorized to issue more than one class
of stock or more than one series of any class of stock, and whenever the
Corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
The Corporation may issue a new certificate of stock or uncertificated
shares in place of any certificate theretofore issued by it, alleged to have
been lost, stolen, or destroyed, and the Board of Directors may require the
owner of the lost, stolen, or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss, theft, or destruction of any such certificate or the issuance of
any such new certificate or uncertificated shares.
3. UNCERTIFICATED SHARES. Subject to any conditions imposed by the
---------------------
General Corporation Law, the Board of Directors of the Corporation may provide
by resolution or resolutions that some or all of any or all classes or series of
the stock of the Corporation shall
<PAGE>
be uncertificated shares. Within a reasonable time after the issuance or
transfer of any uncertificated shares, the Corporation shall send to the
registered owner thereof any written notice prescribed by the General
Corporation Law.
4. FRACTIONAL SHARE INTERESTS. The Corporation may, but shall not be
--------------------------
required to, issue fractions of a share. If the Corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered form (either
represented by a certificate or uncertificated) or bearer form (represented by a
certificate) which shall entitle the holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share or an uncertificated fractional share shall, but scrip or
warrants shall not unless otherwise provided therein, entitle the holder to
exercise voting rights, to receive dividends thereon, and to participate in any
of the assets of the Corporation in the event of liquidation. The Board of
Directors may cause scrip or warrants to be issued subject to the conditions
that they shall become void if not exchanged for certificates representing the
full shares or uncertificated full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the Corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions which the Board of
Directors may impose.
5. STOCK TRANSFERS. Upon compliance with provisions restricting the
---------------
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the Corporation shall be made
only on the stock ledger of the Corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the Corporation or with a transfer agent or a
registrar, if any, and, in the case of shares represented by certificates, on
surrender of the certificate or certificates for such shares of stock properly
endorsed and the payment of all taxes due thereon.
6. RECORD DATE FOR STOCKHOLDERS. In order that the Corporation may
----------------------------
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than sixty nor less than ten days before the date of such
meeting. If no records date is fixed by the Board of Directors, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, of, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
In order that the Corporation may determine the stockholders entitled to consent
to corporate action in writing without a meeting, the Board of Directors may fix
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining the stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is required by
the General Corporation Law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the Corporation by delivery to its registered office in the State of Delaware,
its principal place of business, or an officer or agent of the Corporation
having custody of the book in
2
<PAGE>
which proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by the General
Corporation Law, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the close
of business on the day on which the Board of Directors adopts the resolution
taking such prior action. In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion, or exchange of stock, or for the purpose
of any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty days
prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
7. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
------------------------
notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share of
shares of stock and to a holder or holders of record of outstanding shares of
stock when the Corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class upon which or upon whom the Certificate of Incorporation
confers such rights where there are two or more classes or series of shares of
stock or upon which or upon whom the General Corporation Law confers such rights
notwithstanding that the Certificate of Incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class or series which is otherwise denied voting rights under the
provisions of the Certificate of Incorporation, except as any provision of law
may otherwise require.
8. STOCKHOLDER MEETINGS.
--------------------
- TIME. The annual meeting shall be held on the date and at the time
----
fixed, from time to time, by the directors, provided, that the first annual
meeting shall be held on a date within thirteen months after the organization of
the Corporation, and each successive annual meeting shall be held on a date
within thirteen months after the date of the preceding annual meeting. A
special meeting shall be held on the date and at the time fixed by the
directors.
- PLACE. Annual meetings and special meetings shall be held at such
-----
place, within or without the State of Delaware, as the directors may, from time
to time, fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the registered office of the Corporation in the State of
Delaware.
- CALL. Annual meetings and special meetings may be called by the
----
directors or by any officer instructed by the directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be
--------------------------
given, stating the place, date, and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
stockholders of the Corporation may be examined.
3
<PAGE>
The notice of an annual meeting shall state that the meeting is called for the
election of directors and for the transaction of other business which may
properly come before the meeting, and shall (if any other action which could be
taken at a special meeting is to be taken at such annual meeting) state the
purpose or purposes. The notice of a special meeting shall in all instances
state the purpose or purposes for which the meeting is called. The notice of any
meeting shall also include, or be accompanied by, any additional statements,
information, or documents prescribed by the General Corporation Law. Except as
otherwise provided by the General Corporation Law, a copy of the notice of any
meeting shall be given, personally or by mail, not less than ten days nor more
than sixty days before the date of the meeting, unless the lapse of the
prescribed period of time shall have been waived, and directed to each
stockholder at his record address or at such other address which he may have
furnished by request in writing to the Secretary of the Corporation. Notice by
mail shall be deemed to be given when deposited, with postage thereon prepaid,
in the United States Mail. If a meeting is adjourned to another time, not more
than thirty days hence, and/or to another place, and if an announcement of the
adjourned time and/or place is made at the meeting, it shall not be necessary to
give notice of the adjourned meeting unless the directors, after adjournment,
fix a new record date for the adjourned meeting. Notice need not be given to any
stockholder who submits a written waiver of notice signed by him before or after
the time stated therein. Attendance of a stockholder at a meeting of
stockholders shall constitute a waiver of notice of such meeting, except when
the stockholder attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger of
----------------
the Corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city or other municipality or community where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger the list required by this
section or the books of the Corporation, or to vote at any meeting of
stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be presided
------------------
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the stockholders.
The Secretary of the Corporation, or in his absence, an Assistant Secretary,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present the Chairman of the meeting shall appoint a
secretary of the meeting.
- PROXY REPRESENTATION. Every stockholder may authorize another person
--------------------
or persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date unless such
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is
4
<PAGE>
irrevocable and, if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the Corporation generally.
- INSPECTORS. The directors, in advance of any meeting, may, but need
----------
not, appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspectors at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots, or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots, or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting, the inspector or inspectors, if any, shall
make a report in writing of any challenge, question, or matter determined by him
or them and execute a certificate of any fact found by him or them.
- QUORUM. The holders of a majority of the outstanding shares of stock
------
shall constitute a quorum at a meeting of stockholders for the transaction of
any business. The stockholders present may adjourn the meeting despite the
absence of a quorum.
- VOTING. Each share of stock shall entitle the holders thereof to one
------
vote. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the election of directors. Any other action shall be authorized by a majority
of the votes cast except where the General Corporation Law prescribes a
different percentage of votes and/or a different exercise of voting power, and
except as may be otherwise prescribed by the provisions of the Certificate of
Incorporation and these Bylaws. In the election of directors, and for any other
action, voting need not be by ballot.
9. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the
-----------------------------------
General Corporation Law to be taken at any annual or special meeting of
stockholders, or any action which may be taken at any annual or special meeting
of stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. Action taken pursuant to this paragraph shall be
subject to the provisions of Section 228 of the General Corporation Law.
ARTICLE II
DIRECTORS
---------
1. FUNCTIONS AND DEFINITIONS. The business and affairs of the
-------------------------
Corporation
5
<PAGE>
shall be managed by or under the direction of the Board of Directors of the
Corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors which the Corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a
-------------------------
citizen of the United States, or a resident of the State of Delaware. The
initial Board of Directors shall consist of two (2) person. Thereafter the
number of directors constituting the whole board shall be at least two (2).
Subject to the foregoing limitation and except for the first Board of Directors,
such number may be fixed from time to time by action of the stockholders or of
the directors. The number of directors may be increased or decreased by action
of the stockholders or of the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the members
-----------------
thereof shall have been named in the Certificate of Incorporation, shall be
elected by the incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Any director may resign
at any time upon written notice to the Corporation. Thereafter, directors who
are elected at an annual meeting of stockholders, and directors who are elected
in the interim to fill vacancies and newly created directorships, shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or removal. Except
as the General Corporation Law may otherwise require, in the interim between
annual meetings of stockholders or of special meetings of stockholders called
for the election of directors and/or for the removal of one or more directors
and for the filling of any vacancy in that connection, newly created
directorships and any vacancies in the Board of Directors, including unfilled
vacancies resulting from the removal of directors for cause or without cause,
may be filled by the vote of a majority of the remaining directors then in
office, although less than a quorum, or by the sole remaining director.
4. MEETINGS.
--------
- TIME. Meetings shall be held at such time as the Board shall fix,
----
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the
-----
State of Delaware as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the
----
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required
---------------------------------------
for regular meetings for which the time and place have been fixed. Written,
oral, or any other mode of notice of the time and place shall be given for
special meetings in sufficient time for the convenient assembly of directors
thereat. Notice need not be given to any director or to any member of a
committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular
6
<PAGE>
or special meeting of the directors need by specified in any written waiver of
notice.
- QUORUM AND ACTION. A majority of the whole Board shall constitute a
-----------------
quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum, provided, that
such majority shall constitute at least one-third of the whole Board. A
majority of the directors present, whether or not a quorum is present, may
adjourn a meeting to another time and place. Except as herein otherwise
provided, and except as otherwise provided by the General Corporation Law, the
vote of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board. The quorum and voting provisions herein
stated shall not be construed as conflicting with any provisions of the General
Corporation Law and these Bylaws which govern a meeting of directors held to
fill vacancies and newly created directorships in the Board or action of
disinterested directors.
Any member or members of the Board of Directors or of any committee
designated by the Board, may participate in a meeting of the Board, or any such
committee, as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.
- CHAIRMAN OF THE MEETING. The Chairman, if any if present and acting,
-----------------------
shall preside at all meetings. Otherwise, the Vice-Chairman of the Board, if
any and if present and acting, or the President, if present and acting, or any
other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the
--------------------
General Corporation Law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election or directors.
6. COMMITTEES. The Board of Directors may, by resolution passed by a
----------
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of any member of any such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board, shall have and
may exercise the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation with the exception of
any authority the delegation of which is prohibited by Section 141 of the
General Corporation Law, and may authorize the seal of the Corporation to be
affixed to all papers which may require it.
7. WRITTEN ACTION. Any action required or permitted to be taken at any
--------------
meeting of the Board of Directors or any committee thereof may be taken without
a meeting if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
ARTICLE III
OFFICERS
--------
7
<PAGE>
The officers of the Corporation shall consist of a Chairman, a Secretary, a
Treasurer, and, if deemed necessary, expedient, or desirable by the Board of
Directors, a Chairman of the Board, a Vice-Chairman of the Board, an Executive
Vice-President, one or more other Vice-Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers with such
titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board
of Directors choosing him, no officer other than the Chairman or Vice-Chairman
of the Board, if any, need by a director. Any number of officer may be held by
the same person, as the directors may determine.
Unless otherwise provided in the resolution choosing him, each officer
shall be chosen for a term which shall continue until the meeting of the Board
of Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified.
All officers of the Corporation shall have such authority and perform such
duties in the management and operation of the Corporation as shall be prescribed
in the resolutions of the Board of Directors designating and choosing such
officers and prescribing their authority and duties, and shall have such
additional authority and duties as are incident to their office except to the
extent that such resolutions may be inconsistent therewith. The Secretary or an
Assistant Secretary of the Corporation shall record all of the proceedings of
all meetings and actions in writing of stockholders, directors, and committees
of directors, and shall exercise such additional authority and perform such
additional duties as the Board shall assign to him. Any officer may be removed,
with or without cause, by the Board of Directors. Any vacancy in any office may
be filled by the Board of Directors.
ARTICLE IV
CORPORATE SEAL
--------------
The Corporation seal shall be in such form as the Board of Directors shall
prescribe.
ARTICLE V
FISCAL YEAR
-----------
The fiscal year of the Corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
ARTICLE VI
Indemnification of Directors, Officers and Employees
----------------------------------------------------
1. RIGHT TO INDEMNIFICATION. Every director and officer of the
------------------------
Corporation shall be entitled as of right to be indemnified by the Corporation
against all expenses, liability and loss (including without limitation,
attorney's fees, judgments, fines, taxes, penalties and amounts paid in
settlement) paid or incurred by such person in connection with any actual or
threatened claim, action, suit or proceeding, civil, criminal, administrative,
investigative or other, whether brought by or in the right of the Corporation or
otherwise, in which he may be involved, as a party or otherwise, by reason of
such person being or having been a director or officer of the Corporation or by
reason
8
<PAGE>
of the fact such person is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or other representative of another
domestic or foreign corporation for profit or not-for-profit, partnership, joint
venture, trust, employee benefit plan or other entity or enterprise (such claim,
action, suit or proceeding hereinafter being referred to as an "Action") to the
fullest extent authorized by the General Corporation Law as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted prior to such amendment);
provided, that no such right of indemnification shall exist with respect to an
Action brought by an Indemnitee (as hereinafter defined) against the Corporation
except as provided in the last sentence of this Section 1. Persons who are not
directors or officers of the Corporation may be similarly indemnified in respect
of service to the Corporation or to another such entity at the request of the
Corporation to the extent the Board of Directors at any time denominates any of
such persons as entitled to the benefits of this Article VI. As used in this
Article VI, "Indemnitee" shall include each director and officer of the
Corporation and each other person denominated by the Board of Directors as
entitled to the benefits of this Article VI. An Indemnitee shall be entitled to
be indemnified pursuant to this Section 1 for expenses incurred in connection
with any Action brought by such Indemnitee against the Corporation only if the
Action is a claim for indemnity or expenses under Section 3 of this Article VI
or otherwise and either (i) the Indemnitee is successful in whole or in part in
the Action for which expenses are claimed or (ii) the indemnification for
expenses is included in a settlement of the Action or is awarded by a court.
2. RIGHT TO ADVANCEMENT OF EXPENSES. Every Indemnitee shall be entitled
--------------------------------
as of right to have his expenses in any Action (other than an Action brought by
such Indemnitee against the Corporation) paid in advance by the Corporation
prior to final disposition of such Action, subject to any obligation which may
be imposed by law or by provision of the Corporation's Certificate of
Incorporation, these By-laws, an agreement or otherwise to reimburse the
Corporation in certain events.
3. RIGHT OF INDEMNITEE TO INITIATE ACTION. If a written claim under
--------------------------------------
Section 1 or Section 2 of this Article VI is not paid in full by the Corporation
within thirty days after such claim has been received by the Corporation, the
Indemnitee may at any time thereafter initiate an Action against the Corporation
to recover the unpaid amount of the claim and, if successful in whole or in
part, the Indemnitee shall also be entitled to be paid the expenses of
prosecuting such Action. It shall be a defense to any Action to recover a claim
under Section 1 of this Article VI that the Indemnitee's conduct was such that
under Delaware law the Corporation is prohibited from indemnifying the
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel and its shareholders) to have made
a determination prior to the commencement of such Action that indemnification of
the Indemnitee is proper in the circumstances, nor an actual determination by
the Corporation (including its Board of Directors, independent legal counsel or
its shareholders) that the Indemnitee's conduct was such that indemnification is
prohibited by law, shall be a defense to such Action or create a presumption
that the Indemnitee's conduct was such that indemnification is prohibited by
law. The only defense to any such Action to receive payment of expenses in
advance under Section 2 of this Article VI shall be failure to make an
undertaking to reimburse if such an undertaking is required by law or by
provision of the Corporation's Certificate of Incorporation, these By-laws, an
agreement or otherwise.
4. INSURANCE AND FUNDING. The Corporation may purchase and maintain
---------------------
insurance to protect itself and any person eligible to be indemnified hereunder
against any expense, liability or loss asserted or incurred by such person in
connection with any Action, whether or not
9
<PAGE>
the Corporation would have the power to indemnify such person against such
expense, liability or loss by law or under the provisions of this Article VI.
The Corporation may create a trust fund, grant a security interest, cause a
letter of credit to be issued or use other means (whether or not similar to the
foregoing) to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
5. NONEXCLUSIVITY; NATURE AND EXTENT OF RIGHTS. The rights of
-------------------------------------------
indemnification and advancement of expenses provided for in this Article VI (i)
shall not be deemed exclusive of any other rights, whether now existing or
hereafter created, to which any Indemnitee may be entitled under the
Corporation's Certificate of Incorporation or these By-laws, any agreement, any
vote of shareholders or directors or otherwise, (ii) shall be deemed to create
contractual rights in favor of each Indemnitee, (iii) shall continue as to each
person who has ceased to have the status pursuant to which he was entitled or
was denominated as entitled to indemnification hereunder and shall inure to the
benefit of the heirs and legal representatives of each Indemnitee and (iv) shall
be applicable to Actions commenced after the adoption hereof, whether arising
from acts or omissions occurring before or after the adoption hereof. The
rights of indemnification provided in this Article VI may not be amended or
repealed so as to limit in any way the indemnification or the right to
advancement of expenses provided for herein with respect to any acts or
omissions occurring prior to the adoption of any such amendment or repeal.
ARTICLE VII
CONTROL OVER BY LAWS
--------------------
Subject to the provisions of the Certificate of Incorporation and the
provisions of the General Corporation Law, the power to amend, alter, or repeal
these By Laws and to adopt new Bylaws and to adopt new Bylaws may be exercised
by the Board of Directors or by the stockholders.
10
<PAGE>
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy
of the By Laws of Anthony Crane Holdings Capital Corporation, a Delaware
corporation, as in effect as of the date hereof.
Dated as of July __, 1998
/s/ William B. Kania
----------------------
By: William B. Kania
Its: Secretary
11
<PAGE>
EXHIBIT 4.1
<PAGE>
________________________________________________________________________________
Anthony Crane Rental holdings, L.P.
Anthony Crane Holdings Capital Corporation
SERIES A AND SERIES B
13 3/8% SENIOR DISCOUNT DEBENTURES DUE 2009
INDENTURE
______________________________
Dated as of July 22, 1998
______________________________
State Street Bank and Trust Company
Trustee
_______________
________________________________________________________________________________
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
310 (a)(1).................................................................... 7.10
(a)(2).................................................................... 7.10
(a)(3).................................................................... N.A.
(a)(4).................................................................... N.A.
(a)(5).................................................................... 7.10
(b)....................................................................... 7.10
(c)....................................................................... N.A.
311 (a)....................................................................... 7.11
(b)....................................................................... 7.11
(c)....................................................................... N.A.
312 (a)....................................................................... 2.05
(b)....................................................................... 11.03
(c)....................................................................... 11.03
313 (a)....................................................................... 7.06
(b)(1).................................................................... 10.03
(b)(2).................................................................... 7.07
(c)....................................................................... 7.06;11.02
(d)....................................................................... 7.06
314 (a)....................................................................... 4.03;11.02
(b)....................................................................... 10.02
(c)(1).................................................................... 11.04
(c)(2).................................................................... 11.04
(c)(3).................................................................... N.A.
(e)....................................................................... 11.05
(f)....................................................................... N.A.
315 (a)....................................................................... 7.01
(b)....................................................................... 7.05,11.02
(c)....................................................................... 7.01
(d)....................................................................... 7.01
(e)....................................................................... 6.11
316 (a) (last sentence)....................................................... 2.09
(a)(1)(A)................................................................. 6.05
(a)(1)(B)................................................................. 6.04
(a)(2).................................................................... N.A.
(b)....................................................................... 6.07
(c)....................................................................... 2.12
317 (a)(1).................................................................... 6.08
(a)(2).................................................................... 6.09
(b)....................................................................... 2.04
318 (a)....................................................................... 11.01
(b)....................................................................... N.A.
(c)....................................................................... 11.01
N.A. means not applicable
</TABLE>
*This Cross Reference Table is not part of this Indenture
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.................................................... 1
Section 1.01. Definitions................................................................................... 1
Section 1.02. Other Definitions............................................................................. 19
Section 1.03. .............................................................................................. 19
Section 1.04 Rules of Construction......................................................................... 20
ARTICLE 2. THE DEBENTURES................................................................................ 20
Section 2.01. Form and Dating............................................................................... 20
Section 2.02. Execution and Authentication.................................................................. 21
Section 2.03. Registrar and Paying Agent.................................................................... 22
Section 2.04. Paying Agent to Hold Money in Trust........................................................... 22
Section 2.05. Holder Lists.................................................................................. 23
Section 2.06. Transfer and Exchange......................................................................... 23
Section 2.07. Replacement Debentures........................................................................ 35
Section 2.08. Outstanding Debentures........................................................................ 35
Section 2.09. Treasury Debentures........................................................................... 36
Section 2.10. Temporary Debentures.......................................................................... 36
Section 2.11. Cancellation.................................................................................. 36
Section 2.12. Defaulted Interest............................................................................ 36
ARTICLE 3. REDEMPTION AND PREPAYMENT..................................................................... 37
Section 3.01. Notices to Trustee............................................................................ 37
Section 3.02. Selection of Debentures to Be Redeemed........................................................ 37
Section 3.03. Notice of Redemption.......................................................................... 37
Section 3.04. Effect of Notice of Redemption................................................................ 38
Section 3.05. Deposit of Redemption Price................................................................... 38
Section 3.06. Debentures Redeemed in Part................................................................... 38
Section 3.07. Optional Redemption........................................................................... 39
Section 3.08. Mandatory Redemption.......................................................................... 39
Section 3.09. Offer to Purchase by Application of Net Proceeds Offer Amount................................. 39
ARTICLE 4. COVENANTS..................................................................................... 41
Section 4.01. payment of debentures......................................................................... 41
Section 4.02. Maintenance of Office or Agency............................................................... 41
Section 4.03. Reports....................................................................................... 42
Section 4.04. compliance certificate........................................................................ 42
Section 4.05. Taxes......................................................................................... 43
Section 4.06. Stay, Extension and Usury Laws................................................................ 43
Section 4.07. Restricted Payments........................................................................... 43
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries..................... 46
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.................................... 46
Section 4.10. Asset Sales................................................................................... 49
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 4.11. Transactions with Affiliates.................................................................. 51
Section 4.12. Liens......................................................................................... 52
Section 4.13. Conduct of Business........................................................................... 52
Section 4.14. Corporate Existence........................................................................... 52
Section 4.15. REPURCHASE AT THE OPTION OF HOLDERS........................................................... 52
Section 4.16. Sale Leaseback Transactions................................................................... 53
ARTICLE 5. SUCCESSORS.................................................................................... 54
Section 5.01. Merger, Consolidation, or Sale of Assets...................................................... 54
Section 5.02. Successor Corporation Substituted............................................................. 54
ARTICLE 6. DEFAULTS AND REMEDIES......................................................................... 55
Section 6.01. Events of Default............................................................................. 55
Section 6.02. Acceleration.................................................................................. 56
Section 6.03. Other Remedies................................................................................ 57
Section 6.04. Waiver of Past Defaults....................................................................... 57
Section 6.05. Control by Majority........................................................................... 57
Section 6.06. Limitation on Suits........................................................................... 58
Section 6.07. Rights of Holders of Debentures to Receive Payment............................................ 58
Section 6.08. Collection Suit by Trustee.................................................................... 58
Section 6.09. Trustee May File Proofs of Claim.............................................................. 58
Section 6.10. Priorities.................................................................................... 59
Section 6.11. Undertaking for Costs......................................................................... 59
ARTICLE 7. TRUSTEE....................................................................................... 60
Section 7.01. Duties of Trustee............................................................................. 60
Section 7.02. Rights of Trustee............................................................................. 61
Section 7.03. Individual Rights of Trustee.................................................................. 61
Section 7.04. Trustee's Disclaimer.......................................................................... 62
Section 7.05. Notice of Defaults............................................................................ 62
Section 7.06. Reports by Trustee to Holders of the Debentures............................................... 62
Section 7.07. Compensation and Indemnity.................................................................... 62
Section 7.08. Replacement of Trustee........................................................................ 63
Section 7.09. Successor Trustee by Merger, etc.............................................................. 64
Section 7.10. Eligibility; Disqualification................................................................. 64
Section 7.11. Preferential Collection of Claims Against Issuers............................................. 64
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE...................................................... 64
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...................................... 64
Section 8.02. Legal Defeasance and Discharge................................................................ 65
Section 8.03. Covenant Defeasance........................................................................... 65
Section 8.04. Conditions to Legal or Covenant Defeasance.................................................... 65
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions................................................................ 67
Section 8.06. Repayment to Issuers.......................................................................... 67
Section 8.07. Reinstatement................................................................................. 67
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.............................................................. 68
Section 9.01. Without Consent of Holders of Debentures...................................................... 68
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Section 9.02. With Consent of Holders of Debentures......................................................... 68
Section 9.03. Compliance with Trust Indenture Act........................................................... 70
Section 9.04. Revocation and Effect of Consents............................................................. 70
Section 9.05. Notation on or Exchange of Debentures......................................................... 70
Section 9.06. Trustee to Sign Amendments, etc............................................................... 70
ARTICLE 10. MISCELLANEOUS................................................................................. 70
Section 10.01. Trust Indenture Act Controls.................................................................. 70
Section 10.02. Notices....................................................................................... 70
Section 10.03. Communication by Holders of Debentures with Other Holders of Debentures....................... 72
Section 10.04. Certificate and Opinion as to Conditions Precedent............................................ 72
Section 10.05. Statements Required in Certificate or Opinion................................................. 72
Section 10.06. Rules by Trustee and Agents................................................................... 72
Section 10.07. No Personal Liability of Partners, Directors, Officers, Employees and Stockholders............ 72
Section 10.08. Governing Law................................................................................. 73
Section 10.09. No Adverse Interpretation of Other Agreements................................................. 73
Section 10.10. Successors.................................................................................... 73
Section 10.11. Severability.................................................................................. 73
Section 10.12. Counterpart Originals......................................................................... 73
Section 10.13. Table of Contents, Headings, etc.............................................................. 73
</TABLE>
EXHIBITS
Exhibit A FORM OF DEBENTURES
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
iii
<PAGE>
INDENTURE dated as of July 22, 1998 among Anthony Crane Rental
Holdings, L.P., a Pennsylvania limited partnership (the "Company"), Anthony
Crane Holdings Capital Corporation, a Delaware corporation ("AC Holdings Corp."
and, together with Holdings, the "Issuers"), and State Street Bank and Trust
Company, as trustee (the "Trustee").
The Issuers and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 13 3/8% Series
A Senior Discount Debentures due 2009 (the "Series A Notes") and the 13 3/8%
Series B Discount Debentures due 2009 (the "Series B Notes" and, together with
the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Accreted Value" means for each $1,000 of Debentures, as of any date
of determination prior to August 1, 2003, the sum of (i) the initial offering
price of each Debenture and (ii) that portion of the excess of the principal
amount of each Debenture over such initial offering price which shall have been
accreted thereon through such date, such amount to be so accreted on a daily
basis and compounded semi-annually on each February 1 and August 1 at the rate
of 13 3/8% per annum from the date of issuance of the Debentures through the
date of determination.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
Holdings or that is assumed by Holdings or any of its Restricted Subsidiaries in
connection with the acquisition of assets from such Person, in each case
excluding any Indebtedness incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
of Holdings or such acquisition.
"Affiliate" means a Person who directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, Holdings. The term "control" means the possession directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, no Person (other than Holdings or any
Subsidiary of Holdings) in whom a Securitization Entity makes an Investment in
connection with a Qualified Securitization Transaction shall be deemed to be an
Affiliate of Holdings or any of its Subsidiaries solely by reason of such
Investment.
"Agent" means any Registrar, Paying Agent or co-registrar.
"all or substantially all" shall have the meaning given such phrase in
the Revised Model Business Corporation Act.
"Asset Acquisition" means (a) an Investment by Holdings or any
Restricted Subsidiary of Holdings in any other Person if, as a result of such
Investment, such Person shall become a Restricted Subsidiary of Holdings, or
shall be merged with or into Holdings or any Restricted Subsidiary of Holdings,
or (b) the acquisition by Holdings or any Restricted Subsidiary of Holdings of
all or substantially all of the assets of any other Person or any division or
line of business of any other Person.
<PAGE>
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease, assignment or other transfer for value (other than operating
leases entered into in the ordinary course of business (other than Sale and
Leaseback Transactions)) by Holdings or any of its Restricted Subsidiaries to
any Person other than Holdings or a Restricted Subsidiary of Holdings of (a) any
Capital Stock of any Restricted Subsidiary of Holdings or (b) any other property
or assets of Holdings or any Restricted Subsidiary of Holdings other than in the
ordinary course of business; provided, however, that Asset Sales shall not
include (i) a transaction or series of related transactions for which Holdings
or its Restricted Subsidiaries receive aggregate consideration of less than $1.0
million, (ii) the sale, lease, conveyance, disposition or other transfer of all
substantially all of the assets of Holdings as permitted under Section 5.01 or
any disposition that constitutes a Change of Control, (iii) the sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof, (iv) the factoring of accounts receivable arising in the
ordinary course of business pursuant to arrangements customary in the industry,
(v) the licensing of intellectual property, (vi) disposals or replacements of
used or obsolete cranes and equipment in the ordinary course of business, (vii)
the sale, lease conveyance, disposition or other transfer by Holdings or any
Restricted Subsidiary of assets or property to one or more Restricted
Subsidiaries in connection with Investments permitted by Section 4.07 and (viii)
sales of accounts receivable, equipment and related assets (including contract
rights) of the type specified in the definition of "Qualified Securitization
Transaction" to a Securitization Entity for the fair market value thereof,
including cash in an amount at least equal to 75% of the fair market value
thereof. For the purposes of clause (viii), Purchase Money Notes shall be deemed
to be cash.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Debenture, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"Attributable Debt" means, in respect of a sale and leaseback
transaction, at the time of determination, the present value (discounted at the
rate of interest implicit in such transaction, determined in accordance with
GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Borrowing Base" means, as of any date, an amount equal to the sum of
(i) 100% of the orderly liquidation value of cranes and lifting equipment; (ii)
75% of the orderly liquidation value of trucks and trailers; (iii) 85% of the
face amount of all accounts receivable owned by Holdings and its Restricted
Subsidiaries as of such date that are not more than 90 days past due, as
calculated on a consolidated basis and in accordance with GAAP and (iv) 75% of
the book value of spare parts inventory. To the extent that information is not
available as to the amount of accounts receivable as of a specific date,
Holdings may utilize the most recent available information for purposes of
calculating the Borrowing Base.
"Business Day" means any day other than a Legal Holiday.
"Cedel" means Cedel Bank, SA.
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"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) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's; (iii) commercial paper maturity no more
than one year from the date of creation thereof and at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances (or, with respect to foreign
banks, similar instruments) maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, having at
the date of acquisition thereof combined capital and surplus of not less than
$500.0 million; (v) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (iv)
above; and (vi) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (i) through (v)
above.
"Certificated Debenture" means a certificated Debenture 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 Debenture shall not
bear the Global Debenture Legend and shall not have the "Schedule of Exchanges
of Interests in the Global Debenture" attached thereto.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of Holdings and its Subsidiaries (determined on a consolidated basis)
to any Person or group of related Persons, as defined in Section 13(d) of the
Exchange Act (a "Group"), together with any Affiliates thereof (whether or not
otherwise in compliance with the provisions of this Indenture) other than a
Principal or a Related Party of a Principal; (ii) the approval by the holders of
Capital Stock of one or more of the Issuers or the General Partner of any plan
or proposal for the liquidation or dissolution of the Issuers or the General
Partner (whether or not otherwise in compliance with the provisions of this
Indenture); (iii) any Person or Group (other than one of the Principals or their
respective Related Parties) shall become the owner, directly or indirectly,
beneficially or of record, of more than 50% of either the aggregate Voting Stock
or Capital Stock of one of the Issuers, the General Partner or any successor to
all or substantially all of their respective assets; (iv) the occurrence of any
transaction, the result of which is that the General Partner is no longer the
sole general partner of Holdings; (v) the first day on which Holdings fails to
own 100% of the issued and outstanding Equity Interests of AC Holdings Corp.;
and (vi) (A) for so long as Holdings is a partnership (or other pass-through
entity for federal income tax purposes) with a limited liability company serving
as the
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General Partner, the first day on which a majority of the members of the
Management Committee of the General Partner are not Continuing Members and (B)
at all such other times, the first day on which a majority of the members of
Holdings Management Committee are not Continuing Members. Notwithstanding the
foregoing, any reorganization of Holdings and Anthony Crane Holdings Capital
Corporation pursuant to the last sentence of Section 5.01 shall not constitute a
Change of Control under this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Anthony Crane Rental, L.P., a Pennsylvania limited
partnership, and its successors.
"Consolidated EBITDA" means, with respect to any Person for any
period, the sum (without duplication) of such Person's (i) Consolidated Net
Income (less any gains on Used Crane Sales) and (ii) to the extent Consolidated
Net Income has been reduced thereby, (A) all income taxes and foreign
withholding taxes of such Person and its Restricted Subsidiaries paid or accrued
in accordance with GAAP for such period and any provision for taxes paid or
accrued based on income or profits or the Tax Amount of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes or Tax
Amount was included in computing such Consolidated Net Income, (B) Consolidated
Interest Expense, (C) Consolidated Noncash Charges, (D) all one-time cash
compensation payments made in connection with the Transactions, and (E) any
payments related to addressing Holdings' or any of its Restricted Subsidiaries
"Year 2000" information systems issues or to re-engineering efforts that must be
expensed in accordance with EITF 97-13.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the most recent
four full fiscal quarters for which internal financial statements are available
(the "Four-Quarter Period") ending on or prior to the date of the transaction
giving rise to the need to calculate the Consolidated Fixed Charge Coverage
Ratio (the "Transaction Date") to Consolidated Fixed Charges of such Person for
the Four-Quarter Period. In addition to and without limitation of the foregoing,
for purposes of this definition, Consolidated EBITDA and Consolidated Fixed
Charges shall be calculated after giving effect on a pro forma basis for the
period of such calculation to (i) the incurrence of any Indebtedness or the
issuance of any preferred stock of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) and any repayment of
other Indebtedness or redemption of other preferred stock occurring during the
Four-Quarter Period or at any time subsequent to the last day of the Four-
Quarter Period and on or prior to the Transaction Date, as if such incurrence,
repayment, issuance or redemption, as the case may be (and the application of
the proceeds thereof), occurred on the first day of the Four-Quarter Period and
(ii) any Asset Sales or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of such Person or one of its Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring,
assuming or otherwise being liable for Acquired Indebtedness and also including
any Consolidated EBITDA (including any Pro Forma Cost Savings) associated with
such Asset Acquisition) occurring during the Four-Quarter Period or at any time
subsequent to the last day of the Four-Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any such Indebtedness or Acquired
Indebtedness) occurred on the first day of the Four-Quarter Period. If such
Person or any of its Restricted Subsidiaries directly or indirectly Guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Restricted
Subsidiary of such Person had directly incurred or otherwise assumed such
guaranteed Indebtedness. Furthermore, in calculating
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Consolidated Fixed Charges for purposes of determining the denominator (but not
the numerator) of this Consolidated Fixed Charge Coverage Ratio, (1) interest on
outstanding Indebtedness determined on a fluctuating basis as of the Transaction
Date and which will continue to be so determined thereafter shall be deemed to
have accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four-Quarter Period; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating rate, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense
(excluding amortization or write off of debt issuance costs incurred on or prior
to the date of this Indenture) plus (ii) the product of (a) all cash dividend
payments or other distributions (and non-cash dividend payments in the case of a
Person that is a Subsidiary) on any series of preferred equity of such Person,
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 (or, in the case of a Person that is a partnership or a
limited liability company, the combined federal, state and local income tax rate
that was or would have been utilized to calculate the Tax Amount of such
Person), expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP, provided that with respect to any series of preferred
stock that was not paid cash dividends during such period but that is eligible
to be paid cash dividends during any period prior to the maturity date of the
Debentures, cash dividends shall be deemed to have been paid with respect to
such series of preferred stock during such period for purposes of clause (ii) of
this definition.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of, without duplication, (i) the aggregate of all cash and
non-cash interest expense with respect to all outstanding Indebtedness
(including amortization or write-off of debt issuance costs) of such Person and
its Restricted Subsidiaries, including the net costs associated with Interest
Swap Obligations, for such period determined on a consolidated basis in
conformity with GAAP, (ii) the consolidated interest expense incurred by such
Person and its Restricted Subsidiaries that was capitalized during such period,
and (iii) the interest component of Capitalized Lease Obligations and imputed
interest with respect to Attributable Debt paid, accrued and/or scheduled to be
paid or accrued by such Person and its Restricted Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, (i) the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, provided that there shall be excluded therefrom (a) gains (or losses)
from Asset Sales (without regard to the $1.0 million limitation set forth in the
definition thereof) or abandonments or reserves relating thereto and the related
tax effects according to GAAP, (b) gains (or losses) due solely to fluctuations
in currency values and the related tax effects according to GAAP, (c) items
classified as extraordinary, unusual or nonrecurring gains (or losses)
(including, without limitation, severance, relocation, other restructuring costs
and multiemployer pension plan insured liability payments), and the related tax
effects according to GAAP and any related Tax Amounts with respect thereto, (d)
the net income (or loss) of any Person acquired in a pooling of interests
transaction accrued prior to the date it becomes a Restricted Subsidiary of
Holdings or is merged or consolidated with Holdings or any Restricted Subsidiary
of Holdings, (e) the net income of any
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Restricted Subsidiary of Holdings to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of Holdings of
that income is restricted by operation of its charter (or the equivalent
thereof), operation of law or any judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (f) the net income of any Person, other than a Restricted
Subsidiary of Holdings, except to the extent of cash dividends or distributions
paid to Holdings or a Restricted Subsidiary of Holdings by such Person, (g) only
for purposes of clause (c)(i) of the first paragraph of Section 4.07, any
amounts included pursuant to clause (c)(iii) of the first paragraph of such
Section, (h) the net income (or loss) from the operations of any business that
has been divested by distribution, sale, spin-off or abandonment, and (i) one
time non-cash compensation charges, including any arising from existing stock
options resulting from any merger or recapitalization transaction, less (ii) any
cash distribution paid or accrued related to payment of the Tax Amount for such
period.
"Consolidated Noncash Charges" means, with respect to any Person for
any period, the aggregate depreciation, amortization and any other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person for such period, determined on a consolidate basis in
accordance with GAAP excluding any such non-cash charge constituting an
extraordinary item or loss or any such non-cash charge which requires an accrual
of or a reserve for cash charges for any future period.
"Continuing Members" means, as of any date of determination, any
member of the Management Committee of Holdings who (i) was a member of such
Management Committee on the date of this Indenture or (ii) was nominated for
election or elected to such Management Committee by any of the Principals or
with the approval of a majority of the Continuing Members who were members of
such Board 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 11.02 hereof or such other address as to which the
Trustee may give notice to Holdings.
"Credit Facilities" means one or more debt facilities (including,
without limitation, the Senior Credit Facilities) or commercial paper facilities
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) and/or letters of credit.
"Currency Agreements" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
Holdings or any Restricted Subsidiary of Holdings against fluctuations in
currency values.
"Custodian" means the Trustee, as custodian with respect to the
Debentures 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.
"Depositary" means, with respect to the Debentures 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 Debentures, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
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"Designated Noncash Consideration" means any non-cash consideration
(other than non-cash consideration that would constitute a Restricted
Investment) received by Holdings or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers' Certificate executed by the principal
executive officer and the principal financial officer of Holdings or such
Restricted Subsidiary. Such Officers' Certificate shall state the basis of such
valuation, which shall be a report of a nationally recognized investment banking
firm with respect to the receipt in one or a series of related transactions of
Designated Noncash Consideration with a fair market value in excess of $10.0
million.
"Designated Preferred Stock" means preferred stock that is so
designated as Designated Preferred Stock, pursuant to an Officers' Certificate
executed by the principal executive officer and the principal financial officer
of Holdings, on the issuance date thereof, the cash proceeds of which are
excluded from the calculation set forth in clause (iv) of the first paragraph of
Section 4.07.
"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 Debentures mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require Holdings to repurchase such Capital Stock upon the occurrence
of a Change of Control or an Asset Sale shall not constitute Disqualified Stock
if the terms of such Capital Stock provide that Holdings may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07.
"Distribution Compliance Period" means the 40-day distribution
compliance period as defined in Regulation S.
"dividends" means, for so long as Holdings or any applicable
Subsidiary is a partnership (or other pass-through entity for federal income tax
purposes), dividends or distributions.
"EITF" means the Emerging Issues Task Force of the Financial
Accounting Standards Board.
"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).
"Equity Offering" means any offering of Qualified Capital Stock of
Holdings.
"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 Debentures" means the Debentures issued in the Exchange
Offer pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
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"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of Holdings and its
Restricted Subsidiaries (other than Indebtedness under the Senior Credit
Facilities) in existence on the date of this Indenture, until such amounts are
permanently repaid.
"Four-Quarter Period" has the meaning specified in the definition of
Consolidated Fixed Charge Coverage Ratio.
"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 on December 31, 1997.
"General Partner" means ACR Management L.L.C.
"Global Debentures" means, individually and collectively, each of the
Restricted Global Debentures and the Unrestricted Global Debentures, in the form
of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Debenture Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Debentures 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.
"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 (including Interest Swap
Obligations) and (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.
"Holder" means a Person in whose name a Debenture is registered.
"IAI Global Debenture" means the global Debenture in the form of
Exhibit A-1 hereto bearing the Global Debenture 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 Debentures sold to Institutional Accredited
Investors.
"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, Debentures, 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
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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. For purposes of calculating the amount of Indebtedness of a
Securitization Entity outstanding as of any date, the face or notional amount of
any interest in receivables or equipment that is outstanding as of such date
shall be deemed to be Indebtedness but any such interests held by Affiliates of
such Securitization Entity shall be excluded for purposes of such calculation.
"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 Debenture through a Participant.
"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.
"Interest Swap Obligations" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Persons calculated by applying a fixed or a floating rate of interest on the
same notional amount.
"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 Holdings or any Subsidiary of Holdings sells or otherwise disposes of any
Equity Interests of any direct or indirect Subsidiary of Holdings such that,
after giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of Holdings, Holdings 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 Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal corporate
trust office of the Trustee is located 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 Issuers and sent to all Holders of the Debentures for use by such Holders
in connection with the Exchange Offer.
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"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.
"Management Committee" means (i) for so long as Holdings is a
partnership (or other pass through entity for federal income tax purposes), the
management committee (or the equivalent thereof for any other pass through
entity for federal income tax purposes) of the General Partner and (ii)
otherwise, the Board of Directors of Holdings.
"Marketable Securities" means publicly traded debt or equity
securities that are listed for trading on a national securities exchange and
that were issued by a corporation whose debt securities are rated at least "AAA-
" from S&P or "Aaa3" from Moody's.
"Moody's" means Moody's Investors Service, Inc.
"Net Proceeds" means the aggregate cash proceeds received by Holdings
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 or Tax Distributions 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.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
Holdings 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 of Holdings
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; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of Holdings
or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Obligations" means any principal, interest (including interest that,
but for the filing of a petition in bankruptcy with respect to the Issuers,
would accrue on such obligations), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"Offering" means the offering of the Debentures by the Issuers.
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"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
Issuers by two Officers of the Issuers, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Issuers, that meets the requirements of
Sections 11.04 and 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Sections
11.04 and 11.05 hereof. The counsel may be an employee of or counsel to the
Issuers, any Subsidiary of Holdings 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).
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Business" means any business that derives a majority of its
revenues from the sale, rental or lease of cranes or other lifting equipment or
activities that are reasonably similar, ancillary or related to, or a reasonable
extension, development or expansion of, the businesses in which Holdings and its
Restricted Subsidiaries are engaged on the date of this Indenture.
"Permitted Investments" means (i) Investments by Holdings or any
Restricted Subsidiary of Holdings in any Restricted Subsidiary of Holdings
(whether existing on the date of this Indenture or created thereafter) or in any
other Person (including by means of any transfer of cash or other property) if
as a result of such Investment such Person shall become a Restricted Subsidiary
of Holdings and Investments in Holdings by any Restricted Subsidiary of
Holdings, (ii) cash and Cash Equivalents, (iii) Investments existing on the date
of this Indenture, (iv) loans and advances to employees and officers of Holdings
and its Restricted Subsidiaries in the ordinary course of business, (v) accounts
receivable created or acquired in the ordinary course of business, (vi) Interest
Swap Obligations entered into in the ordinary course of Holdings businesses and
otherwise in compliance with this Indenture, (vii) Investments in Unrestricted
Subsidiaries an amount at any one time outstanding not to exceed $10.0 million,
(viii) Investments in securities of trade creditors or customers received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers, (ix) guarantees
by Holdings of Indebtedness otherwise permitted to be incurred by Restricted
Subsidiaries of Holdings under this Indenture, (x) Investments the payment for
which consists exclusively of Qualified Capital Stock of Holdings, (xi)
additional Investments having an aggregate fair market value, taken together
with all other Investments made pursuant to this clause (xi) that are at that
time outstanding, not to exceed 5% of Total Assets at the time of such
Investment (with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value), (xii)
Investments received by Holdings or its Restricted Subsidiaries as consideration
for asset sales, including Asset Sales; provided that in the case of an Asset
Sale, such Asset Sale is effected in compliance with Section 4.10 and (xiii) any
Investment by Holdings or a Subsidiary of Holdings in a Securitization Entity or
any Investment by a Securitization Entity in any other Person in connection with
a Qualified Securitization Transaction; provided that any Investment in a
Securitization Entity is in the form of a Purchase Money Note or an equity
interest.
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"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which Holdings or its Restricted Subsidiaries shall have
set aside on its books such reserves as may be required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default;
(v) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of Holdings or any of
its Restricted Subsidiaries;
(vi) any interest or title of a lessor under any Capitalized Lease
Obligation;
(vii) purchase money Liens to finance property or assets of Holdings
or any Restricted Subsidiary of Holdings acquired in the ordinary course of
business; provided, however, that (A) the related purchase money Indebtedness
shall not exceed the cost of such property or assets and shall not be secured by
any property or assets of Holdings or any Restricted Subsidiary of Holdings
other than the property and assets so acquired and (B) the Lien securing such
Indebtedness shall be created with 90 days of such acquisition;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment, or storage of such inventory or other goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of Holdings or
any of its Restricted Subsidiaries, including rights of offset and set-off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
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(xii) Liens securing Acquired Indebtedness incurred in reliance on
the second paragraph of Section 4.09;
(xiii) Liens incurred in the ordinary course of business of Holdings
or any Restricted Subsidiary with respect to obligations that do not in the
aggregate exceed $15.0 million at any one time outstanding;
(xiv) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of Holdings and its Restricted
Subsidiaries;
(xv) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(xvi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customer duties in connection with the
importation of goods;
(xvii) Liens on assets of Unrestricted Subsidiaries that secure Non-
Recourse Debt of Unrestricted Subsidiaries;
(xviii) Liens existing on the date of this Indenture, together with
any Liens securing Indebtedness incurred in reliance on clause (xiii) of the
definition of Permitted Indebtedness in order to refinance the Indebtedness
secured by Liens existing on the date of this Indenture; provided that the Liens
securing the refinancing Indebtedness shall not extend to property other than
that pledged under the Liens securing the Indebtedness being refinanced;
(xix) Liens securing Indebtedness and other Obligations under Credit
Facilities that will be permitted by the terms of this Indenture to be incurred;
(xx) Liens securing Attributable Debt incurred in connection with
any sale and leaseback transaction permitted to be consummated pursuant to
Section 4.16;
(xxi) Liens securing Indebtedness permitted to be incurred pursuant
to (A) the Senior Credit Facilities (whether such Indebtedness is incurred
pursuant to the Consolidated Fixed Charge Coverage Ratio set forth in the first
paragraph of Section 4.09 or clause (ii) of Section 4.09, (B) clause (ix) of
Section 4.09 and (C) clause (xiv) of Section 4.09; and
(xxii) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case incurred in connection with a
Qualified Securitization Transaction.
"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).
"Principals" means Bain Capital, Inc. and any Affiliate of Bain
Capital, Inc.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Debentures issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
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"Productive Assets" means assets (including Capital Stock) that are
used or usable by Holdings and its Restricted Subsidiaries in Permitted
Businesses; provided that for any Capital Stock to qualify as Productive Assets,
it must, after giving pro forma effect to the transaction in which it was
acquired, be Capital Stock of a Restricted Subsidiary.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs that occurred during the Four-Quarter Period or after the end
of the Four-Quarter Period and on or prior to the Transaction Date that were (i)
directly attributable to an Asset Acquisition and calculated on a basis that is
consistent with Article 11 of Regulation S-X under the Securities Act as in
effect on the date of this Indenture or (ii) implemented by the business that
was the subject of any such Asset Acquisition within six months of the date of
the Asset Acquisition and that are supportable and quantifiable by the
underlying accounting records of such business, as if, in the case of each of
clause (i) and (ii), all such reductions in costs had been effected as of the
beginning of such period.
"Purchase Money Note" means a promissory note of a Securitization
Entity evidencing a line of credit, which may be irrevocable, from Holdings or
any Restricted Subsidiary of Holdings in connection with a Qualified
Securitization Transaction, which note shall be repaid from cash available to
the Securitization Entity, other than (i) amounts required to be established as
reserves pursuant to agreements, (ii) amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and (iii) amounts
paid in connection with the purchase of newly generated receivables or newly
acquired equipment.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Stock.
"Qualified Securitization Transaction" means any transaction or series
of transactions pursuant to which the Company or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to (a) a Securitization
Entity (in the case of a transfer by Holdings or any of its Restricted
Subsidiaries) and (b) any other Person (in case of a transfer by a
Securitization Entity), or may grant a security interest in, any accounts
receivable or equipment (whether now existing or arising or acquired in the
future) of Holdings or any of its Restricted Subsidiaries, and any assets
related thereto including, without limitation, all collateral securing such
accounts receivable and equipment, all contracts and contract rights and all
Guarantees or other obligations in respect to such accounts receivable and
equipment, proceeds of such accounts receivable and equipment and other assets
(including contract rights) which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable and equipment, all of
the foregoing for the purpose of providing working capital financing on terms
that are more favorable to Holdings and its Restricted Subsidiary than would
otherwise be available at that time.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Issuers and
the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Debenture" a Regulation S Temporary Global
Debenture or Regulation S Permanent Global Debenture, as appropriate.
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"Regulation S Permanent Global Debenture" means a permanent global
Debenture in the form of Exhibit A-1 hereto bearing the Global Debenture 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 Debenture upon expiration of the Distribution Compliance
Period.
"Regulation S Temporary Global Debenture" means a temporary global
Debenture 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 Debentures initially sold in reliance on Rule 903 of Regulation S.
"Related Party" with respect to any Principal means (A) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (B) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).
"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 Certificated Debenture" means a Certificated Debenture
bearing the Private Placement Legend.
"Restricted Global Debenture" means a Global Debenture bearing the
Private Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"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 144A Global Debenture" means a global note in the form of
Exhibit A-1 hereto bearing the Global Debenture 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 Debentures sold in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard & Poor's.
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"Sale and Leaseback Transaction" means any sale and leaseback
transaction by Holdings or any of its Restricted Subsidiaries with respect to
assets with an aggregate fair market value (as determined in good faith by the
Management Committee) in excess of $1.0 million.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Entity" means a Wholly Owned Subsidiary of Holdings
(or another Person in which Holdings or any Subsidiary of Holdings makes an
Investment and to which Holdings or any Subsidiary of Holdings transfers
accounts receivable or equipment and related assets) that engages in no
activities other than in connection with the financing of accounts receivable or
equipment and that is designated by the Management Committee of Holdings (as
provided below) as a Securitization Entity (a) no portion of the Indebtedness or
any other Obligations (contingent or otherwise) of which (i) is guaranteed by
Holdings or any Restricted Subsidiary of Holdings (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates Holdings or any Restricted Subsidiary of Holdings in any way other
than pursuant to Standard Securitization Undertakings or (iii) subjects any
property or asset of Holdings or any Restricted Subsidiary of the Company,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to Standard Securitization Undertakings, (b) with which
neither Holdings nor any Restricted Subsidiary of Holdings has any material
contract, agreement, arrangement or understanding other than on terms no less
favorable to Holdings or such Restricted Subsidiary than those that might be
obtained at the time from Persons that are not Affiliates of Holdings, other
than fees payable in the ordinary course of business in connection with
servicing receivables of such entity, and (c) to which neither Holdings nor any
Restricted Subsidiary of Holdings has any obligation to maintain or preserve
such entity's financial condition or cause such entity to achieve certain levels
of operating results. Any such designation by the Management Committee of
Holdings shall be evidenced to each of the Trustees by filing with the Trustees
a certified copy of the resolution of the Management Committee of Holdings
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions.
"Senior Credit Facilities" means the Term and Revolving Credit
Agreements, dated as of the date of this Indenture, by and among the Company,
Goldman Sachs Credit Partners L.P., and the Agent, Collateral Agent and the
financial institutions party thereto, providing for revolving credit borrowings
and term loan borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended (including any amendment and restatement thereof),
modified, renewed, refunded, replaced, refinanced or restructured from time to
time and whether with the same or any other agent, lender or group of lenders,
including to increase the amount of available borrowings thereunder.
"Senior Notes" means the 10 3/8% Senior Notes due 2008 of the
Company.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
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"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by Holdings or any Subsidiary
of Holdings that are reasonably customary in an accounts receivable or equipment
transactions.
"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 shares of
Capital Stock 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), but shall not
include any Unrestricted Subsidiary.
"Tax Amount" means the amount of distributions, whether paid or
accrued, necessary to permit Holdings' partners to pay federal and state income
tax liabilities arising from income of Holdings and its Restricted Subsidiaries
and taxable to such partners, including the tax distributions contemplated by
Holdings' and the Company's respective partnership agreements attributable to
such partners solely as a result of Holdings (and any intermediate entity
through which any such partner owns its interest in Holdings) being a
partnership or similar pass-through entity for federal income tax purposes.
"Tax Distributions" means a distribution in respect of taxes to the
partners of Holdings pursuant to clause (9) of the second paragraph of Section
4.07.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"Total Assets" means the total consolidated assets of Holdings and its
Restricted Subsidiaries, as set forth on Holdings' most recent consolidated
balance sheet.
"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 Certificated Debenture" means one or more Certificated
Debentures that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Global Debenture" means a permanent global Debenture in
the form of Exhibit A-1 attached hereto that bears the Global Debenture Legend
and that has the "Schedule of Exchanges of Interests in the Global Debenture"
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary, representing a series of Debentures that do not bear
the Private Placement Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary (other than Anthony
Crane Holdings Capital Corporation) that is designated by the Management
Committee as an Unrestricted Subsidiary
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pursuant to a 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 Holdings or any Restricted
Subsidiary of Holdings unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to Holdings or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of Holdings; (c) is a Person with respect to which
neither Holdings nor any of its Restricted Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional Equity Interests or (y) 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
Holdings 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 Holdings or any of its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of Holdings or any of its
Restricted Subsidiaries. Any such designation by the Management Committee 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 and was
permitted by Section 4.07. If, at any time, any Unrestricted Subsidiary would
fail to meet the foregoing requirements as 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 Holdings as of such date (and, if such Indebtedness is
not permitted to be incurred as of such date under Section 4.09, Holdings shall
be in default of such covenant). The Management Committee 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 Holdings 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, 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 following
such designation.
"Used Crane Sales" means sales of used cranes, used parts and other
used equipment by Holdings or any of its Restricted Subsidiaries pursuant to the
Company's fleet management program in the ordinary course of business consistent
with past practices on the date of this Indenture.
"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
Management Committee or Board of Directors, as applicable, 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 or by one or more Wholly Owned
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Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a 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 or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
Section 1.01. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"Acceleration Notice"....................................... 6.02
"Affiliate Transaction"..................................... 4.11
"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
"DTC"....................................................... 2.03
"Event of Default".......................................... 6.01
"incur"..................................................... 4.09
"Legal Defeasance".......................................... 8.02
"Net Proceeds Offer"........................................ 4.10
"Net Proceeds Offer Amount"................................. 4.10
"Net Proceeds Offer Payment Date"........................... 4.10
"Net Proceeds Offer Trigger Date"........................... 4.10
"Offer Period".............................................. 3.09
"Paying Agent".............................................. 2.03
"Permitted Indebtedness".................................... 4.09
"Purchase Date"............................................. 3.09
"Refinancing Indebtedness".................................. 4.09
"Refunding Capital Stock"................................... 4.07
"Registrar"................................................. 2.03
"Required Premiums"......................................... 4.09
"Restricted Payments"....................................... 4.07
"Retired Capital Stock"..................................... 4.07
</TABLE>
Section 1.02. TIA DEFINITIONS
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 Debentures;
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"indenture security Holder" means a Holder of a Debenture;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Debentures means the Issuers and any successor
obligor upon the Debentures.
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 1.03. 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 DEBENTURES
Section 2.01. Form and Dating.
(a) General. The Debentures and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Debentures may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Debenture shall be dated the date of its
authentication. The Debentures shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Debentures shall constitute,
and are hereby expressly made, a part of this Indenture and the Issuers 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 Debenture conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Debentures. Debentures issued in global form shall be
substantially in the form of Exhibits A-1 or A-2 attached hereto (including the
Global Debenture Legend thereon and the
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"Schedule of Exchanges of Interests in the Global Debenture" attached thereto).
Debentures issued in definitive form shall be substantially in the form of
Exhibit A-1 attached hereto (but without the Global Debenture Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Debenture"
attached thereto). Each Global Debenture shall represent such of the outstanding
Debentures as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Debentures from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Debentures represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Debenture to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Debentures represented thereby shall be made by
the Trustee or the Debenture Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
(c) Temporary Global Debentures. Debentures offered and sold in reliance
on Regulation S shall be issued initially in the form of the Regulation S
Temporary Global Debenture, which shall be deposited on behalf of the purchasers
of the Debentures 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 Issuers and
authenticated by the Trustee as hereinafter provided. The Distribution
Compliance 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 Debenture (except to the extent of
any beneficial owners thereof who acquired an interest therein during the
Distribution Compliance Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a Rule 144A Global Debenture or an IAI Global Debenture bearing a
Private Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof),
and (ii) an Officers' Certificate from the Issuers. Following the termination of
the Distribution Compliance Period, beneficial interests in the Regulation S
Temporary Global Debenture shall be exchanged for beneficial interests in
Regulation S Permanent Global Debentures pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent Global
Debentures, the Trustee shall cancel the Regulation S Temporary Global
Debenture. The aggregate principal amount of the Regulation S Temporary Global
Debenture and the Regulation S Permanent Global Debentures 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 Debenture and the
Regulation S Permanent Global Debentures that are held by Participants through
Euroclear or Cedel Bank.
Section 2.02. Execution and Authentication.
Two Officers shall sign the Debentures for the Issuers by manual or
facsimile signature. The Issuers' seal shall be reproduced on the Debentures
and may be in facsimile form.
If an Officer whose signature is on a Debenture no longer holds that
office at the time a Debenture is authenticated, the Debenture shall
nevertheless be valid.
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A Debenture shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Debenture has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Issuers signed by two
Officers (an "Authentication Order"), authenticate Debentures for original issue
up to the aggregate principal amount stated in paragraph 4 of the Debentures.
The aggregate principal amount of Debentures 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
Issuers to authenticate Debentures. An authenticating agent may authenticate
Debentures 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 Issuers.
Section 2.03. Registrar and Paying Agent.
The Issuers shall maintain an office or agency where Debentures may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Debentures may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Debentures and of their transfer and
exchange. The Issuers 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 Issuers may
change any Paying Agent or Registrar without notice to any Holder. The Issuers
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Issuers fail to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. Holdings or
any of its Subsidiaries may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Debentures.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and to act as Debenture Custodian with respect to the Global
Debentures.
Section 2.04. Paying Agent to Hold Money in Trust.
The Issuers 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 Debentures,
and will notify the Trustee of any default by the Issuers 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 Issuers 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 Holdings or a Subsidiary)
shall have no further liability for the money. If Holdings 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 Issuers, the Trustee
shall serve as Paying Agent for the Debentures.
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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 (S) 312(a). If the Trustee is
not the Registrar, the Issuers 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
Debentures and the Issuers shall otherwise comply with TIA (S) 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Debentures. A Global Debenture 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, the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary. All Global Debentures will
be exchanged by the Issuers for Certificated Debentures if (i) the Issuers
deliver to the Trustee 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 Issuers within 120 days after the date of such notice from
the Depositary or (ii) the Issuers in their sole discretion determines that the
Global Debentures (in whole but not in part) should be exchanged for
Certificated Debentures and delivers a written notice to such effect to the
Trustee; provided that in no event shall the Regulation S Temporary Global
Debenture be exchanged by the Issuers for Certificated Debentures prior to (x)
the expiration of the Distribution Compliance 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, Certificated Debentures shall be issued in such names as the
Depositary shall instruct the Trustee. Global Debentures also may be exchanged
or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof.
Every Debenture authenticated and delivered in exchange for, or in lieu of, a
Global Debenture 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 Debenture. A Global Debenture may not be exchanged
for another Debenture other than as provided in this Section 2.06(a), however,
beneficial interests in a Global Debenture 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
Debentures. The transfer and exchange of beneficial interests in the Global
Debentures shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Debentures 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 Debentures 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 Debenture.
Beneficial interests in any Restricted Global Debenture may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Restricted Global Debenture in accordance with the transfer restrictions
set forth in the Private Placement Legend; provided, however, that prior to
the expiration of the Distribution Compliance Period, transfers of beneficial
interests in the Temporary Regulation S Global Debenture 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 Debenture
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted
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Global Debenture. 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
Debentures. 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 Debenture 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 Certificated Debenture 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
Certificated Debenture shall be registered to effect the transfer or exchange
referred to in (1) above; provided that in no event shall Certificated
Debentures be issued upon the transfer or exchange of beneficial interests in
the Regulation S Temporary Global Debenture prior to (x) the expiration of the
Distribution Compliance 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 Issuers 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 Debentures. Upon satisfaction of
all of the requirements for transfer or exchange of beneficial interests in
Global Debentures contained in this Indenture and the Debentures or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Debenture(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Debenture. A beneficial interest in any Restricted Global Debenture may be
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in another Restricted Global Debenture 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 Rule 144A Global Debenture, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial
interest in the Regulation S Temporary Global Debenture or the
Regulation S Global Debenture, 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 transferee will take delivery in the form of a beneficial
interest in the IAI Global Debenture, then the transferor must deliver
a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global
Debenture for Beneficial Interests in the Unrestricted Global Debenture. A
beneficial interest in any Restricted
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Global Debenture may be exchanged by any holder thereof for a beneficial
interest in an Unrestricted Global Debenture or transferred to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Debenture 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 Debentures
or (3) a Person who is an affiliate (as defined in Rule 144) of the
Issuers;
(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 Participating 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 Debenture proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Debenture, 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 Debenture 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 Debenture, 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 Debenture has not yet been issued,
the Issuers 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 Debentures 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 Debenture cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Debenture.
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(c) Transfer or Exchange of Beneficial Interests for Certificated
Debentures.
(i) Beneficial Interests in Restricted Global Debentures to Restricted
Certificated Debentures. If any holder of a beneficial interest in a
Restricted Global Debenture proposes to exchange such beneficial interest for
a Restricted Certificated Debenture or to transfer such beneficial interest to
a Person who takes delivery thereof in the form of a Restricted Certificated
Debenture, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global
Debenture proposes to exchange such beneficial interest for a Restricted
Certificated Debenture, 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 Holdings 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 Debenture to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Issuers shall execute and the Trustee shall authenticate
and deliver to the Person designated in the instructions a Certificated
Debenture in the appropriate principal amount. Any Certificated Debenture
issued in exchange for a beneficial interest in a Restricted Global
Debenture 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 Certificated
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Debentures to the Persons in whose names such Debentures are so registered.
Any Certificated Debenture issued in exchange for a beneficial interest in
a Restricted Global Debenture 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 Debenture may not be exchanged
for a Certificated Debenture or transferred to a Person who takes delivery
thereof in the form of a Certificated Debenture prior to (x) the expiration of
the Distribution Compliance 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.
(ii) Beneficial Interests in Restricted Global Debentures to Unrestricted
Certificated Debentures. A holder of a beneficial interest in a Restricted
Global Debenture may exchange such beneficial interest for an Unrestricted
Certificated Debenture or may transfer such beneficial interest to a Person
who takes delivery thereof in the form of an Unrestricted Certificated
Debenture 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 Debentures or (3) a
Person who is an affiliate (as defined in Rule 144) of the Issuers;
(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 Participating 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 Debenture proposes to exchange such beneficial interest for a
Certificated Debenture 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 Debenture proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a Certificated Debenture
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
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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) Beneficial Interests in Unrestricted Global Debentures to
Unrestricted Certificated Debentures. If any holder of a beneficial interest
in an Unrestricted Global Debenture proposes to exchange such beneficial
interest for a Certificated Debenture or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Certificated
Debenture, 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 Debenture to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Certificated Debenture in the appropriate principal amount. Any Certificated
Debenture issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) 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
Certificated Debentures to the Persons in whose names such Debentures are so
registered. Any Certificated Debenture issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall not bear the Private
Placement Legend.
(d) Transfer and Exchange of Certificated Debentures for Beneficial
Interests.
(i) Restricted Certificated Debentures to Beneficial Interests in
Restricted Global Debentures. If any Holder of a Restricted Certificated
Debenture proposes to exchange such Debenture for a beneficial interest in a
Restricted Global Debenture or to transfer such Restricted Certificated
Debentures to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Debenture, then, upon receipt by the Registrar
of the following documentation:
(A) if the Holder of such Restricted Certificated Debenture
proposes to exchange such Debenture for a beneficial interest in a
Restricted Global Debenture, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Certificated Debenture 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 Certificated Debenture 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 Certificated Debenture 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 Certificated Debenture 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)
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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 Certificated Debenture is being transferred
to Holdings 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 Certificated Debenture 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 Certificated Debenture, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Debenture, in the case
of clause (B) above, the Rule 144A Global Debenture, in the case of clause
(c) above, the Regulation S Global Debenture, and in all other cases, the
IAI Global Debenture.
(ii) Restricted Certificated Debentures to Beneficial Interests in
Unrestricted Global Debentures. A Holder of a Restricted Certificated
Debenture may exchange such Debenture for a beneficial interest in an
Unrestricted Global Debenture or transfer such Restricted Certificated
Debenture to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Debenture 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 Debentures or (3) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(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 Participating 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 Certificated Debentures proposes to
exchange such Debentures for a beneficial interest in the Unrestricted
Global Debenture, 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 Certificated Debentures proposes to
transfer such Debentures to a Person who shall take delivery thereof in the
form of a beneficial interest in the Unrestricted Global Debenture, a
certificate from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
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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 Certificated Debentures
and increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Debenture.
(iii) Unrestricted Certificated Debentures to Beneficial Interests in
Unrestricted Global Debentures. A Holder of an Unrestricted Certificated
Debenture may exchange such Debenture for a beneficial interest in an
Unrestricted Global Debenture or transfer such Certificated Debentures to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Debenture at any time. Upon receipt of a request for such
an exchange or transfer, the Trustee shall cancel the applicable Unrestricted
Certificated Debenture and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Debentures.
If any such exchange or transfer from a Certificated Debenture to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Debenture has not yet been
issued, the Issuers 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 Debentures in an aggregate principal amount equal to the
principal amount of Certificated Debentures so transferred.
(e) Transfer and Exchange of Certificated Debentures for Certificated
Debentures. Upon request by a Holder of Certificated Debentures and such
Holder's compliance with the provisions of this Section 2.06(e), the Registrar
shall register the transfer or exchange of Certificated Debentures. Prior to
such registration of transfer or exchange, the requesting Holder shall present
or surrender to the Registrar the Certificated Debentures 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 Certificated Debentures to Restricted Certificated
Debentures. Any Restricted Certificated Debenture may be transferred to and
registered in the name of Persons who take delivery thereof in the form of a
Restricted Certificated Debenture 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
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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 Certificated Debentures to Unrestricted Certificated
Debentures. Any Restricted Certificated Debenture may be exchanged by the
Holder thereof for an Unrestricted Certificated Debenture or transferred to a
Person or Persons who take delivery thereof in the form of an Unrestricted
Certificated Debenture 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 Debentures or (3) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(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 Participating 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 Certificated Debentures
proposes to exchange such Debentures for an Unrestricted Certificated
Debenture, 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 Certificated Debentures
proposes to transfer such Debentures to a Person who shall take delivery
thereof in the form of an Unrestricted Certificated Debenture, 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
Issuers 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 Certificated Debentures to Unrestricted Certificated
Debentures. A Holder of Unrestricted Certificated Debentures may transfer
such Debentures to a Person who takes delivery thereof in the form of an
Unrestricted Certificated Debenture. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted Certificated
Debentures 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 Issuers 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
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Debentures in an aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Global Debentures 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 Debentures and (z) they are not affiliates (as defined in Rule 144) of
the Issuers, and accepted for exchange in the Exchange Offer and (ii)
Certificated Debentures in an aggregate principal amount equal to the principal
amount of the Restricted Certificated Debentures accepted for exchange in the
Exchange Offer. Concurrently with the issuance of such Debentures, the Trustee
shall cause the aggregate principal amount of the applicable Restricted Global
Debentures to be reduced accordingly, and the Issuers shall execute and the
Trustee shall authenticate and deliver to the Persons designated by the Holders
of Certificated Debentures so accepted Certificated Debentures in the
appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Debentures and Certificated Debentures 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
Debenture and each Certificated Debenture (and all Debentures issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form
"THIS DEBENTURE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
1. REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
(B) IT HAS ACQUIRED THIS DEBENTURE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR
(C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AN "IAI"),
2. AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
DEBENTURE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT,
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(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS DEBENTURE (THE FORM OF WHICH CAN BE OBTAINED
FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES LESS THAN $250,000,
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
3. AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
DEBENTURE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING."
(B) Notwithstanding the foregoing, any Global Debenture or
Certificated Debenture 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 Debentures issued in exchange therefor or
substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Debenture Legend. Each Global Debenture shall bear a legend
in substantially the following form:
"THIS GLOBAL DEBENTURE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS DEBENTURE) 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 DEBENTURE MAY BE EXCHANGED IN WHOLE BUT NOT IN
PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
DEBENTURE MAY BE DELIVERED TO THE TRUSTEE
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FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL DEBENTURE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE ISSUERS."
(iii) Regulation S Temporary Global Debenture Legend. The Regulation S
Temporary Global Debenture shall bear a legend in substantially the following
form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL DEBENTURE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
DEBENTURES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
DEBENTURE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Debentures. At such time
as all beneficial interests in a particular Global Debenture have been exchanged
for Certificated Debentures or a particular Global Debenture has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Debenture
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 Debenture is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Debenture or for Certificated Debentures, the principal amount of
Debentures represented by such Global Debenture shall be reduced accordingly and
an endorsement shall be made on such Global Debenture 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
Debenture, such other Global Debenture shall be increased accordingly and an
endorsement shall be made on such Global Debenture 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 Issuers
shall execute and the Trustee shall authenticate Global Debentures and
Certificated Debentures upon the Issuers' order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial interest
in a Global Debenture or to a Holder of a Certificated Debenture for any
registration of transfer or exchange, but the Issuers 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 Debenture selected for redemption in whole or in part, except the
unredeemed portion of any Debenture being redeemed in part.
(iv) All Global Debentures and Certificated Debentures issued upon any
registration of transfer or exchange of Global Debentures or Certificated
Debentures shall be the valid obligations of the Issuers, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Global
Debentures or Certificated Debentures surrendered upon such registration of
transfer or exchange.
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(v) The Issuers shall not be required (A) to issue, to register the
transfer of or to exchange any Debentures during a period beginning at the
opening of business 15 days before the day of any selection of Debentures 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
Debenture so selected for redemption in whole or in part, except the
unredeemed portion of any Debenture being redeemed in part or (c) to register
the transfer of or to exchange a Debenture between a record date and the next
succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any
Debenture, the Trustee, any Agent and the Issuers may deem and treat the
Person in whose name any Debenture is registered as the absolute owner of such
Debenture for the purpose of receiving payment of principal of and interest on
such Debentures and for all other purposes, and none of the Trustee, any Agent
or the Issuers shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Debentures and Certificated
Debentures 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.
Section 2.07. Replacement Debentures.
If any mutilated Debenture is surrendered to the Trustee or the
Issuers and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Debenture, the Issuers shall issue and the
Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Debenture if the Trustee's requirements are met. If required by the
Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Issuers to protect the
Issuers, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Debenture is replaced. The Issuers may charge for
their expenses in replacing a Debenture.
Every replacement Debenture is an additional obligation of the
Issuers and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Debentures duly issued hereunder.
Section 2.08. Outstanding Debentures.
The Debentures outstanding at any time are all the Debentures
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Debenture
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 Debenture does not cease to be outstanding because Holdings or an
Affiliate of Holdings holds the Debenture; however, Debentures held by Holdings
or a Subsidiary of Holdings shall not be deemed to be outstanding for purposes
of Section 3.07(b) hereof.
If a Debenture is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Debenture is held by a bona fide purchaser.
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If the principal amount of any Debenture 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 Holdings, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Debentures payable on that date, then on and after that date
such Debentures shall be deemed to be no longer outstanding and shall cease to
accrue interest.
Section 2.09. Treasury Debentures.
In determining whether the Holders of the required principal
amount of Debentures have concurred in any direction, waiver or consent,
Debentures owned by Holdings, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
Holdings, 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 Debentures that the Trustee knows are so
owned shall be so disregarded.
Section 2.10. Temporary Debentures
Until certificates representing Debentures are ready for
delivery, the Issuers may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Debentures. Temporary
Debentures shall be substantially in the form of certificated Debentures but may
have variations that the Issuers consider appropriate for temporary Debentures
and as shall be reasonably acceptable to the Trustee. Without unreasonable
delay, the Issuers shall prepare and the Trustee shall authenticate definitive
Debentures in exchange for temporary Debentures.
Holders of temporary Debentures shall be entitled to all of the
benefits of this Indenture.
Section 2.11. Cancellation.
The Issuers at any time may deliver Debentures to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Debentures surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Debentures surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Debentures (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all cancelled
Debentures shall be delivered to the Issuers. The Issuers may not issue new
Debentures to replace Debentures that it has paid or that have been delivered to
the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Issuers default in a payment of interest on the
Debentures, 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 Debentures and in Section 4.01 hereof. The Issuers shall notify
the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Debenture and the date of the proposed payment. The Issuers 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 Issuers (or, upon the written request of the
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Issuers, the Trustee in the name and at the expense of the Issuers) 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 Issuers elect to redeem Debentures 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 Debentures to be redeemed, (iv) the redemption price and (v) the CUSIP
numbers of the Debentures to be redeemed.
Section 3.02. Selection of Debentures to Be Redeemed.
If less than all of the Debentures are to be redeemed or
purchased in an offer to purchase at any time, the Trustee shall select the
Debentures to be redeemed or purchased among the Holders of the Debentures in
compliance with the requirements of the principal national securities exchange,
if any, on which the Debentures are listed or, if the Debentures are not so
listed, on a pro rata basis, by lot or in accordance with any other method the
Trustee considers fair and appropriate. In the event of partial redemption by
lot, the particular Debentures 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 Debentures not previously
called for redemption.
The Trustee shall promptly notify the Issuers in writing of the
Debentures selected for redemption and, in the case of any Debenture selected
for partial redemption, the principal amount thereof to be redeemed. Debentures
and portions of Debentures selected shall be in amounts of $1,000 or whole
multiples of $1,000; except that if all of the Debentures of a Holder are to be
redeemed, the entire outstanding amount of Debentures 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 Debentures called
for redemption also apply to portions of Debentures 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 Issuers shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Debentures are to be redeemed at its registered address.
The notice shall identify the Debentures to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Debenture is being redeemed in part, the portion of the
principal amount of such Debenture to be redeemed and that, after the redemption
date upon surrender of such Debenture, a new Debenture or Debentures in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Debenture;
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(d) the name and address of the Paying Agent;
(e) that Debentures called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Issuers default in making such redemption
payment, interest on Debentures called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Debentures and/or Section of this Indenture
pursuant to which the Debentures 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 Debentures.
At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at its expense; provided, however, that the
Issuers 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, Debentures 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 Issuers shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Debentures to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the Issuers
any money deposited with the Trustee or the Paying Agent by the Issuers in
excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Debentures to be redeemed.
If the Issuers comply with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Debentures or the portions of Debentures called for redemption. If a
Debenture 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 Debenture was registered at the close of
business on such record date. If any Debenture called for redemption shall not
be so paid upon surrender for redemption because of the failure of the Issuers
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 Debentures and in Section 4.01 hereof.
Section 3.06. Debentures Redeemed in Part.
Upon surrender of a Debenture that is redeemed in part, the
Issuers shall issue and, upon the Issuers' written request, the Trustee shall
authenticate for the Holder at the expense of the Issuers a new Debenture equal
in principal amount to the unredeemed portion of the Debenture surrendered.
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Section 3.07. Optional Redemption.
(a) Except as provided below, the Debentures will not be redeemable
at the Issuers' option prior to August 1, 2003. Thereafter, the Debentures will
be subject to redemption at any time at the option of the Issuers, 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 August
1 of the years indicated below:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
-----------------------------------------------------------------------------------
<S> <C>
2003............................................ 106.688%
2004............................................ 104.458%
2005............................................ 102.229%
2006 and thereafter............................. 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to August 1,
2001, the Issuers may on any one or more occasions redeem up to 35% of the
aggregate principal amount at maturity of Debentures originally issued under the
Indenture at a redemption price of 113.375% of the Accreted Value thereof (as
determined on the redemption date), plus Liquidated Damages thereon, if any, to
the redemption date, with the net cash proceeds of any Equity Offerings;
provided that at least 65% of the aggregate principal amount at maturity of
Debentures originally issued remain outstanding immediately after the occurrence
of such redemption (excluding Debentures held by Holdings and its Subsidiaries);
and provided further that such redemption shall occur within 120 days of the
date of the closing of any such Equity 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 Issuers shall not be required to make mandatory redemption
payments with respect to the Debentures.
Section 3.09. Offer to Purchase by Application of Net Proceeds Offer Amount.
In the event that, pursuant to Section 4.10 hereof, Holdings
shall be required to commence a Net Proceeds Offer, it shall follow the
procedures specified below.
The Net Proceeds 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"), Holdings shall purchase the Net Proceeds Offer Amount of
Debentures or, if less than the Net Proceeds Offer Amount has been tendered, all
Debentures tendered in response to the Net Proceeds Offer. Payment for any
Debentures so purchased shall be made in the same manner as interest payments
are made.
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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 Debenture is registered at the close
of business on such record date, and no additional interest shall be payable to
Holders who tender Debentures pursuant to the Net Proceeds Offer.
Upon the commencement of an Net Proceeds Offer, Holdings 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 Debentures pursuant to the Net
Proceeds Offer. The Net Proceeds Offer shall be made to all Holders. The notice,
which shall govern the terms of the Net Proceeds Offer, shall state:
(a) that the Net Proceeds Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Net Proceeds
Offer shall remain open;
(b) the Net Proceeds Offer Amount, the purchase price and the
Purchase Date;
(c) that any Debenture not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless Holdings defaults in making such payment, any
Debenture accepted for payment pursuant to the Net Proceeds Offer shall cease to
accrue interest after the Purchase Date;
(e) that Holders electing to have a Debenture purchased pursuant to
an Net Proceeds Offer may only elect to have all of such Debenture purchased and
may not elect to have only a portion of such Debenture purchased;
(f) that Holders electing to have a Debenture purchased pursuant to
any Net Proceeds Offer shall be required to surrender the Debenture, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Debenture completed, or transfer by book-entry transfer, to Holdings, a
depositary, if appointed by Holdings, or a Paying Agent at the address specified
in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
Holdings, 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 Debenture the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Debenture purchased;
(h) that, if the aggregate principal amount of Debentures surrendered
by Holders exceeds the Offer Amount, Holdings shall select the Debentures to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by Holdings so that only Debentures in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Debentures were purchased only in part shall
be issued new Debentures equal in principal amount to the unpurchased portion of
the Debentures surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, Holdings shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the Net
Proceeds Offer Amount of Debentures or portions thereof tendered pursuant to the
Net Proceeds Offer, or if less than the Net Proceeds Offer Amount has
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been tendered, all Debentures tendered, and shall deliver to the Trustee an
Officers' Certificate stating that such Debentures or portions thereof were
accepted for payment by Holdings in accordance with the terms of this Section
3.09. Holdings, 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
Debentures tendered by such Holder and accepted by Holdings for purchase, and
Holdings shall promptly issue a new Debenture, and the Trustee, upon written
request from Holdings shall authenticate and mail or deliver such new Debenture
to such Holder, in a principal amount equal to any unpurchased portion of the
Debenture surrendered. Any Debenture not so accepted shall be promptly mailed or
delivered by Holdings to the Holder thereof. Holdings shall publicly announce
the results of the Net Proceeds 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 Debentures.
The Issuers shall pay or cause to be paid the principal of,
premium, if any, and interest on the Debentures on the dates and in the manner
provided in the Debentures. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than Holdings or a
Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money
deposited by the Issuers in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due. The
Issuers 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 Issuers 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
Debentures 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 Issuers 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 Debentures may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Issuers in respect of the Debentures and this Indenture
may be served. The Issuers 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 Issuers 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 Issuers may also from time to time designate one or more
other offices or agencies where the Debentures 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 Issuers of their obligation to maintain an office or
agency in the Borough of
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Manhattan, the City of New York for such purposes. The Issuers 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 Issuers hereby designate the Corporate Trust Office of the
Trustee as one such office or agency of the Issuers 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 Debentures are outstanding, the Issuers will furnish to the
Holders of Debentures (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 Holdings 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 Holdings and its
consolidated Subsidiaries and, with respect to the annual information only, a
report thereon by Holdings' certified independent accountants and (ii) all
current reports that would be required to be filed with the SEC on Form 8-K if
Holdings were required to file such reports, in each case within the time
periods specified in the SEC's rules and regulations. In addition, following the
consummation of the exchange offer contemplated by the Registration Rights
Agreement, whether or not required by the rules and regulations of the SEC,
Holdings shall file a copy of all such information and reports with the SEC for
public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.
(b) For so long as any Debentures remain outstanding, Holdings shall
furnish to the Holders 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) Holdings 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 Holdings and its Subsidiaries during the preceding fiscal year has
been made under the supervision of the signing Officers with a view to
determining whether Holdings 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 Holdings 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 Holdings 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 Debentures
is prohibited or if such event has occurred, a description of the event and what
action Holdings 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 Holdings' 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
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believe that Holdings 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) Holdings shall, so long as any of the Debentures 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 Holdings is taking or proposes to take with respect
thereto.
Section 4.05. Taxes.
Holdings 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 Debentures.
Section 4.06. Stay, Extension and Usury Laws.
The Issuers covenant (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 Issuers (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.
Holdings 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 Holdings' or any of its
Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving Holdings or any of its
Subsidiaries) or to the direct or indirect holders of Holdings' or any of its
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Qualified Capital Stock of Holdings or the Company);
(ii) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving
Holdings) any Equity Interests of Holdings or any direct or indirect parent of
Holdings; (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 Debentures (other than intercompany Indebtedness), except a
payment of interest or 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; and
(b) Holdings 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
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Period, have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09; and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by Holdings and its Restricted Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted by
clauses (3), (4) (but only to the extent such Restricted Payment is made with
the cash proceeds received by Holdings or one of its Restricted Subsidiaries
from any "key man" life insurance policies), (5), (7), (8) and (9) of the next
succeeding paragraph), is less than the sum, without duplication, of (i) 50% of
the Consolidated Net Income of Holdings for the period (taken as one accounting
period) from the beginning of the first fiscal quarter commencing after the date
of this Indenture to the end of Holdings' 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 (ii) 100% of the aggregate net proceeds (including
the fair market value of property other than cash (determined in good faith by
the Management Committee as evidenced by a certificate filed with the Trustee,
except that in the event the value of any non-cash consideration shall be $15.0
million or more, the value shall be determined based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing)) received by Holdings since the date of this Indenture as a
contribution to its common equity capital or from the issue or sale of Equity
Interests (other than Disqualified Stock) of Holdings (excluding any net
proceeds from an Equity Offering or capital contribution to the extent used to
redeem Debentures in accordance with the optional redemption provisions of the
Debentures) or from the issue or sale of Disqualified Stock or debt securities
of Holdings that have been converted into such Equity Interests (other than
Equity Interests (or Disqualified Stock or convertible debt securities) sold to
a Subsidiary of Holdings), plus (iii) to the extent that any Restricted
Investment that was made after the date of this Indenture is sold for cash or
otherwise liquidated or repaid for cash, the cash return of capital with respect
to such Restricted Investment (less the cost of disposition, if any), plus (iv)
any dividends (the fair market value of property other than cash shall be
determined in good faith by the Management Committee as evidenced by a
certificate filed with the trustee, except that in the event the value of any
non-cash consideration shall be $15.0 million or more, the value shall be
determined based upon an opinion or appraisal issued by an accounting, appraisal
or investment banking firm of national standing) received by Holdings or a
Restricted Subsidiary after the date of this Indenture from any Unrestricted
Subsidiary of Holdings, to the extent that such dividends were not otherwise
included in Consolidated Net Income of Holdings for such period, plus (v) to the
extent that any Unrestricted Subsidiary is redesignated as a Restricted
Subsidiary after the date of this Indenture, if as a result of such
redesignation, (x) the Fixed Charge Coverage Ratio of Holdings on a pro forma
basis is lower than such ratio immediately prior thereto, then the lesser of (A)
the fair market value of Holdings' Investment in such Subsidiary as of the date
of such redesignation or (B) such fair market value as of the date on which such
Subsidiary was originally designated as an Unrestricted Subsidiary or (y) the
Fixed Charge Coverage Ratio of Holdings on a pro forma basis is equal to or
higher than such ratio immediately prior thereto, the fair market value of
Holdings Investment in such Subsidiary as of the date of such redesignation.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph will not prohibit (1) the payment of any
dividend or the consummation of any irrevocable redemption within 60 days after
the date of declaration of such dividend or notice of such redemption if the
dividend or payment of the redemption price, as the case may be, would have been
permitted on the date of declaration or notice; (2) if no Event of Default shall
have occurred and be continuing or shall occur as a consequence thereof, the
acquisition of any Capital Stock of Holdings (the "Retired Capital Stock"),
either (i) solely in exchange for Qualified Capital Stock of Holdings (the
"Refunding Capital
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Stock"), or (ii) through the application of the net proceeds of a substantially
concurrent sale for cash (other than to a Subsidiary of Holdings) of Qualified
Capital Stock of Holdings, and, in the case of subclause (i) of this clause (2),
if immediately prior to the retirement of the Retired Capital Stock the
declaration and payment of dividends thereon was permitted under clause (3) of
this paragraph, the declaration and payment of dividends on the Refunding
Capital Stock in an aggregate amount per year no greater than the aggregate
amount of dividends per annum that was declarable and payable on such Retired
Capital Stock immediately prior to such retirement; provided that at the time of
the declaration of any such dividends on the Refunding Capital Stock, no Default
or Event of Default shall have occurred and be continuing or would occur as a
consequence thereof; (3) if no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof, the declaration and
payment of dividends to holders of any class or series of Designated Preferred
Stock (other than Disqualified Stock) issued after the date of this Indenture
(including, without limitation, the declaration and payment of dividends on
Refunding Capital Stock in excess of the dividends declarable and payable
thereon pursuant to clause (2) of this paragraph); provided that, at the time of
such issuance, Holdings, after giving effect to such issuance on a pro forma
basis, would have had a Consolidated Fixed Charge Coverage Ratio of at least
1.75 to 1.0 for the most recent Four-Quarter Period; (4) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of Holdings or any Subsidiary of Holdings held by any former member of the
Holdings' (or any of its Subsidiaries') management committee or any former
officer, employee or director of Holdings or any of its Subsidiaries pursuant to
any equity subscription agreement, stock option agreement, employment agreement
or other similar agreements; provided that (A) the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed (x) $1.5 million in any calendar year (with unused amounts in any
calendar year being carried over to succeeding calendar years) plus (y) the
aggregate cash proceeds received by Holdings or the Company during such calendar
year from any reissuance of Equity Interests by Holdings or the Company to
members of management of the Company and its Restricted Subsidiaries and (B) no
Default or Event of Default shall have occurred and be continuing immediately
after such transaction; provided, further that the aggregate cash proceeds
referred to in (y) above shall be excluded from clause (c)(ii) of the preceding
paragraph; (5) if no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof, other Restricted Payments in
an aggregate amount not to exceed $12.0 million since the date of this
Indenture; (6) repurchases of Capital Stock deemed to occur upon the exercise of
stock options if such Capital Stock represents a portion of the exercise price
thereof; (7) distributions to the Current Owners to fund the Transactions and
(8) so long as Holdings is treated as a partnership or disregarded as an entity
separate from its owners for federal income tax purposes, distributions to the
partners of Holdings in an amount with respect to any period after June 30, 1998
not to exceed the Tax Amount of Holdings for such period.
The Management Committee 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
Holdings and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. 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.
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 Holdings or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment.
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Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, directly an indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to (a) pay dividends or make any
other distributions on or in respect of its Capital Stock, (b) make loans or
advances or to pay any Indebtedness or other obligation owed to the Company or
any other Restricted Subsidiary of Holdings or (c) transfer any of its property
or assets to Holdings or any other Restricted Subsidiary of Holdings, except for
such encumbrances or restrictions existing under or by reason of: (1) applicable
law; (2) this Indenture or the Note Indenture; (3) non-assignment provisions of
any contract or any lease entered into in the ordinary course of business; (4)
any instrument governing Acquired Indebtedness, which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person or the properties or assets of the Person so acquired; (5)
agreements existing on the date of this Indenture (including, without
limitation, the Senior Credit Facilities); (6) restrictions on the transfer of
assets subject to any Lien permitted under this Indenture imposed by the holder
of such Lien; (7) restrictions imposed by any agreement to sell assets or
Capital Stock permitted under this Indenture to any Person pending the closing
of such sale; (8) any agreement or instrument governing Capital Stock of any
Person that is in effect on the date such Person is acquired by Holdings or a
Restricted Subsidiary of Holdings; (9) any Purchase Money Note, or other
Indebtedness or other contractual requirements of a Securitization Entity in
connection with a Qualified Securitization Transaction; provided that such
restrictions apply only to such Securitization Entity; (10) other Indebtedness
permitted to be incurred subsequent to the date of this Indenture pursuant to
Section 4.09; provided that any such restrictions are ordinary and customary
with respect to the type of Indebtedness or preferred stock being incurred or
issued (under the relevant circumstances); (11) restrictions on cash or other
deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business; and (12) any encumbrances or restrictions imposed
by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (1) through (11) above;
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the good faith
judgment of the Management Committee, no more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividend or
other payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
Holdings 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 and that Holdings will
not issue any Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Issuers may incur Indebtedness or issue shares of Disqualified Stock and
Holdings' Restricted Subsidiaries may incur Indebtedness or issue shares of
preferred stock if (i) no Default or Event of Default shall have occurred and be
continuing at the time or as a consequence of the incurrence of any such
Indebtedness or the issuance of any such Disqualified Stock, and (ii) the
Consolidated Fixed Charge Coverage Ratio for Holdings' most recently ended Four-
Quarter Period would have been at least 1.75 to 1.0, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock had
been issued, at the beginning of such Four-Quarter Period.
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The provisions of the first paragraph of this covenant will not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Indebtedness"):
(i) the incurrence by Holdings of Indebtedness represented by the
Debentures issued in the Offering, the incurrence by the Company of
Indebtedness represented by the Senior Notes and the incurrence by the
Subsidiary Guarantors of the Subsidiary Guarantees of the Senior Notes;
(ii) the incurrence by Holdings and its Restricted Subsidiaries of
Indebtedness incurred pursuant to one or more Credit Facilities in an
aggregate principal amount at any time outstanding (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of Holdings and its Subsidiaries thereunder) not to exceed the sum
of (a) $50.0 million (which amount shall initially be utilized for term
Indebtedness) plus (b) the greater of (I) the Borrowing Base or (II) $275.0
million, less, in the case of clauses (a) and (b)(II), taken together, (A) the
aggregate amount of Indebtedness of Securitization Entities at the time
outstanding less (B) he amount of all optional or mandatory principal payments
actually made by the Company or any of its Restricted Subsidiaries since the
date of this Indenture in respect of term loans under Credit Facilities
incurred under this clause (ii) (excluding any such payments to the extent
refinanced at the time of payment under a Credit Facility) and (C) further
reduced by (X) any repayments of revolving credit borrowings under Credit
Facilities that are applied in accordance with Section 4.10 and (Y) any
Attributable Debt incurred in pursuant to Section 4.16;
(iii) the incurrence by Holdings and its Restricted Subsidiaries of
Indebtedness under Currency Agreements;
(iv) the incurrence by Holdings and its Restricted Subsidiaries of
Existing Indebtedness;
(v) Interest Swap Obligations of Holdings and its Restricted
Subsidiaries covering Indebtedness of Holdings and its Restricted
Subsidiaries; provided that any Indebtedness to which any such Interest Swap
Obligations correspond is otherwise permitted to be incurred under this
Indenture; and provided, further, that such Interest Swap Obligations are
entered into, in the judgment of Holdings, to protect Holdings and its
Restricted Subsidiaries from fluctuation in interest rates on its outstanding
Indebtedness;
(vi) the incurrence by Holdings or any of its Restricted Subsidiaries
of intercompany Indebtedness between or among Holdings and any of its
Restricted Subsidiaries; provided, however, that (i) if Holdings is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated to
the prior payment in full in cash of all Obligations with respect to the
Debentures and (ii)(A) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than
Holdings or a Subsidiary thereof and (B) any sale or other transfer of any
such Indebtedness to a Person that is not either Holdings or a Restricted
Subsidiary thereof shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by Holdings or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (vi);
(vii) the incurrence of Acquired Indebtedness of Restricted
Subsidiaries of Holdings to the extent Holdings could have incurred such
Indebtedness in accordance with the first paragraph of this covenant on the
date such Indebtedness became Acquired Indebtedness;
(viii) Guarantees by Holdings and its Restricted Subsidiaries of each
other's Indebtedness; provided that such Indebtedness is permitted to be
incurred under this Indenture;
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(ix) Indebtedness (including Capitalized Lease Obligations) incurred
by Holdings or any of its Restricted Subsidiaries to finance the purchase,
lease or improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any Person
owning such assets) in an aggregate principal amount outstanding not to exceed
5% of Total Assets at the time of any incurrence thereof (including any
Refinancing Indebtedness with respect thereto) (which amount may, but need
not, be incurred in whole or in part under the Senior Credit Facilities);
(x) the incurrence of Indebtedness (including letters of credit) in
respect of workers' compensation claims, self-insurance obligations,
performance, surety, bid or similar bonds and completion guarantees provided
by Holdings or a Restricted Subsidiary in the ordinary course of business and
consistent with past practices;
(xi) Indebtedness arising from agreements of Holdings or a Restricted
Subsidiary of Holdings providing for indemnification, adjustment of purchase
price, earn out or other similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or a
Restricted Subsidiary of Holdings, other than guarantees of Indebtedness
incurred by any Person acquiring all or any portion of such business, assets
or Restricted Subsidiary for the purpose of financing such acquisition;
provided that the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received by
Holdings and its Restricted Subsidiaries in connection with such disposition;
(xii) obligations in respect of performance and surety bonds and
completion guarantees provided by Holdings or any Restricted Subsidiary of
Holdings in the ordinary course of business;
(xiii) any refinancing, modification, replacement, renewal,
restatement, refunding, defeasance, deferral, extension, substitution,
supplement, reissuance or resale of existing or future Indebtedness (other
than intercompany Indebtedness), including any additional Indebtedness
incurred to pay interest or premiums required by the instruments governing
such existing or future Indebtedness as in effect at the time of issuance
thereof ("Required Premiums") and fees in connection therewith ("Refinancing
Indebtedness"); provided that (1) any such event shall not directly or
indirectly result in an increase in the aggregate principal amount of
Permitted Indebtedness (except to the extent such increase is a result of a
simultaneous incurrence of additional Indebtedness (A) to pay Required
Premiums and related fees or (B) otherwise permitted to be incurred under this
Indenture) of Holdings and its Restricted Subsidiaries, (2) such Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and has 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, (3) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Debentures, such Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Debentures on terms at least
as favorable to the Holders as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(xiv) the incurrence by Holdings or any of its Restricted Subsidiaries
of additional Indebtedness and/or the issuance of Disqualified Stock in an
aggregate principal amount or aggregate liquidation value, as applicable (or
accreted value, as applicable), at any time outstanding, including all
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xiv), not to exceed $20
million; and
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(xv) the incurrence by a Securitization Entity of Indebtedness in a
Qualified Securitization Transaction that is Non-Recourse Debt (except for
Standard Securitization Undertakings) with respect to Holdings and its
other Restricted Subsidiaries.
The Issuers shall also not incur any Indebtedness (including
Permitted Indebtedness) that is contractually subordinated in right of payment
to any other Indebtedness of the Issuers unless such Indebtedness is also
contractually subordinated in right of payment to the Debentures on
substantially identical terms; provided, however, that no Indebtedness of the
Issuers shall be deemed to be contractually subordinated in right of payment to
any other Indebtedness of the Issuers solely by virtue of being unsecured.
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 Indebtedness described in clauses (i) through (xv)
above or is entitled to be incurred pursuant to the first paragraph of this
Section 4.09, the Issuers shall, in their 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, the payment of
interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Stock in the form of
additional shares of the same class of Disqualified Stock shall not be deemed to
be an incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this Section 4.09; provided, in each such case, that the amount
thereof is included in Consolidated Fixed Charges of Holdings as accrued.
Section 4.10. Asset Sales
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) Holdings or the applicable
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value of the assets sold or
otherwise disposed of (as determined in good faith by the Management Committee),
(ii) at least 75% of the consideration received by Holdings or the Restricted
Subsidiary, as the case may be, from such Asset Sale shall be cash or Cash
Equivalents; provided that the amount of (a) any liabilities (as shown on
Holdings or such Restricted Subsidiary's most recent balance sheet) of Holdings
or any such Restricted Subsidiary (other than liabilities that are by their
terms subordinated to the Debentures) that are assumed by the transferee of any
such assets, (b) any Debentures or other obligations received by Holdings or any
such Restricted Subsidiary from such transferee that are immediately converted
by Holdings or such Restricted Subsidiary into cash (to the extent of the cash
received), and (c) any Designated Noncash Consideration received by Holdings or
any of its Restricted Subsidiaries in such Asset Sale having an aggregate fair
market value, taken together with all other Designated Noncash Consideration
received pursuant to this clause (c) that is at that time outstanding, not to
exceed 10% of Total Assets at the time of the receipt of such Designated Noncash
Consideration (with the fair market value of each item of Designated Noncash
Consideration being measured at the time received and without giving effect to
subsequent changes in value), shall be deemed to be cash for the purposes of
this provision, and (iii) upon the consummation of an Asset Sale, Holdings shall
apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds
relating to such Asset Sale within 365 days of receipt thereof to reinvest in
Productive Assets or to repay Indebtedness under the Senior Credit Facilities.
Pending the final application of any such Net Cash Proceeds, Holdings or such
Restricted Subsidiary may invest such Net Cash Proceeds in Cash Equivalents.
On the 366th day after an Asset Sale or such earlier date, if
any, as the Management Committee or such Restricted Subsidiary determines not to
apply the Net Cash Proceeds relating to such
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Asset Sale as set forth in clause (iii) of the preceding paragraph (each, a "Net
Proceeds Offer Trigger Date"), the aggregate amount of Net Cash Proceeds that
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clause (iii) of the preceding paragraph (each a "Net Proceeds Offer
Amount") shall be applied by Holdings or such Restricted Subsidiary to make an
offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 30 nor more than 45 days following the applicable
Net Proceeds Offer Trigger Date, (x) from all holders of Senior Notes on a pro
rata basis that amount of Senior Notes equal to the Net Proceeds Offer Amount at
a price equal to 100% of the principal amount of the Senior Notes to be
purchased, plus accrued and unpaid interest and Liquidated Damages thereon, if
any, to the date of purchase, or (y) from all Holders on a pro rata basis that
amount of Debentures equal to the Net Proceeds Offer Amount at a price equal to
100% of the Accreted Value thereof on the date of repurchase (if such date of
repurchase is prior to August 1, 2003) or 100% of the principal amount of the
Debentures to be purchased (if such date of repurchase is on or after August 1,
2003), plus, in each case, accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase; provided, however, that if at any time
any non-cash consideration (including any Designated Noncash Consideration)
received by Holdings or any Restricted Subsidiary of Holdings, as the case may
be, in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such non-
cash consideration), then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this Section 4.10.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is
less than $10.0 million, the application of the Net Cash Proceeds constituting
such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until
such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by
Holdings and its Restricted Subsidiaries aggregates at least $10.0 million, at
which time Holdings or such Restricted Subsidiary shall apply all Net Cash
Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred
to make a Net Proceeds Offer (the first date the aggregate of all such deferred
Net Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to
be a "Net Proceeds Offer Trigger Date").
Notwithstanding the two immediately preceding paragraphs,
Holdings and its Restricted Subsidiaries will be permitted to consummate an
Asset Sale without complying with such paragraphs to the extent (i) at least 75%
of the consideration for such Asset Sale constitutes Productive Assets, cash,
Cash Equivalents and/or Marketable Securities and (ii) such Asset Sale is for
fair market value (as determined in good faith by the Management Committee of
the General Partner); provided that any consideration not constituting
Productive Assets received by Holdings or any of its Restricted Subsidiaries in
connection with any Asset Sale permitted to be consummated under this paragraph
shall be subject to the provisions of the two preceding paragraphs.
Each Net Proceeds Offer will be mailed to the record Holders as
shown on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in Section 3.09. To the extent that the aggregate amount of Debentures
tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds Offer
Amount, Holdings may use any remaining Net Proceeds Offer Amount for general
corporate purposes. Upon completion of any such Net Proceeds Offer, the Net
Proceeds Offer Amount shall be reset at zero.
The Issuers 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 Debentures pursuant to a Net Proceeds Offer. To the
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extent that the provisions of any securities laws or regulations conflict with
the Asset Sale provisions of this Indenture, the Issuers shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the Asset Sale provisions of this Indenture by
virtue thereof.
Section 4.11. Transactions with Affiliates.
(a) Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to occur any
transaction or series or related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(b) below and (y) Affiliate Transactions on terms that are not materially less
favorable than those that would have been obtained in a comparable transaction
at such time on an arm's-length basis from a Person that is not an Affiliate of
the Company or any of its Restricted Subsidiaries; provided, however, that for a
transaction or series of related transactions with an aggregate value of $5.0
million or more, at Holdings option, either (i) a majority of the disinterested
members of the Management Committee shall determine in good faith that such
Affiliate Transaction is on terms that are not materially less favorable than
those that might reasonably have been obtained in a comparable transaction at
such time on an arm's-length basis from a Person that is not an Affiliate of
Holdings or (ii) the Management Committee or any such Restricted Subsidiary
party to such Affiliate Transaction shall have received an opinion from a
nationally recognized investment banking firm that such Affiliate Transaction is
on terms not materially less favorable than those that might reasonably have
been obtained in a comparable transaction at such time on an arm's-length basis
from a Person that is not an Affiliate of Holdings; and provided, further, that
for an Affiliate Transaction with an aggregate value of $10.0 million or more
the Management Committee or any such Restricted Subsidiary party to such
Affiliate Transaction shall have received an opinion from a nationally
recognized investment banking firm that such Affiliate Transaction is on terms
not materially less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm's-length basis from
a Person that is not an Affiliate of Holdings.
(b) The foregoing restrictions shall not apply to (i) reasonable fees
and compensation paid to and indemnity provided on behalf of, officers,
directors, employee or consultants of Holdings or any Subsidiary as determined
in good faith by the Management Committee or senior management; (ii)
transactions exclusively between or among Holdings and any of its Restricted
Subsidiaries or exclusively between or among such Restricted Subsidiaries,
provided such transactions are not otherwise prohibited by this Indenture; (iii)
any agreement as in effect as of the date of this Indenture or any amendment or
replacement thereto or any transaction contemplated thereby (including pursuant
to any amendment or replacement thereto) so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any material
respect than the original agreement as in effect on the date of this Indenture;
(iv) Restricted Payments permitted by this Indenture; (v) the payment of
customary annual management, consulting and advisory fees and related expenses
to the Principals and their Affiliates made pursuant to any financial advisory,
financing, underwriting or placement agreement or in respect of other investment
banking activities, including, without limitation, in connection with
acquisitions or divestitures which are approved by the Management Committee or
such Restricted Subsidiary in good faith; (vi) payments or loans to employees or
consultants that are approved by the Management Committee in good faith; (vii)
the existence of, or the performance by Holdings or any of its Restricted
Subsidiaries of its obligations under the terms of, any securityholders
agreement (including any registration rights agreement or purchase agreement
related thereto) to which it is a party as of the date of this Indenture and any
similar agreements which it may enter into thereafter; provided,
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however, that the existence of, or the performance by Holdings or any of its
Restricted Subsidiaries of obligations under, any future amendment to any such
existing agreement or under any similar agreement entered into after the date of
this Indenture shall only be permitted by this clause (vii) to the extent that
the terms of any such amendment or new agreement are not disadvantageous to the
Holders of Debentures in any material respect; (viii) transactions permitted by,
and complying with, the provisions of Section 5.01; (ix) transactions effected
as part of a Qualified Securitization Transaction; (x) transactions with
customers, clients, suppliers, or purchasers or sellers of goods or services, in
each case in the ordinary course of business and otherwise in compliance with
the terms of this Indenture which are fair to Holdings or its Restricted
Subsidiaries, in the reasonable determination of the Management Committee or the
senior management thereof, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party; and (xi)
any Affiliate Transaction with (A) a Principal or Related Party not in excess of
$1.0 million or (B) any other Person not in excess of $100,000.
Section 4.12. Liens.
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens of any kind
against or upon any of its property or assets, or any proceeds therefrom, except
for Permitted Liens.
Section 4.13. Conduct of Business.
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any businesses a majority of whose revenues are not
derived from the same or reasonably similar, ancillary or related to, or a
reasonable extension, development or expansion of, the businesses in which
Holdings and its Restricted Subsidiaries are engaged on the date of this
Indenture.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, Holdings 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 Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of Holdings or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of Holdings and its Subsidiaries; provided, however, that Holdings shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Management
Committee shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Holdings and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Debentures.
Section 4.15. REPURCHASE AT THE OPTION OF HOLDERS.
Upon the occurrence of a Change of Control, each Holder of
Debentures will have the right to require the Issuers to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's
Debentures pursuant to the offer described below (the "Change of Control Offer")
at an offer price in cash (the "Change of Control Payment") equal to 101% of the
Accreted Value thereof on the date of repurchase (if such date of repurchase is
prior to August 1, 2003) or 101% of the aggregate principal amount thereof (if
such date of repurchase is on or after August 1, 2003) plus, in each case,
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase. Within ten
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days following any Change of Control, the Issuers will mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Debentures on the date specified in such
notice, which date 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"),
pursuant to the procedures required by this Indenture and described in such
notice. The Issuers will 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 the Debentures as a result of a Change of Control.
On the Change of Control Payment Date, the Issuers will, to the
extent lawful, (1) accept for payment all Debentures or portions thereof
properly tendered pursuant to the Change of Control Offer, (2) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Debentures or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee the Debentures so accepted together with an Officers'
Certificate stating the aggregate principal amount at maturity of Debentures or
portions thereof being purchased by the Issuers. The Paying Agent will promptly
mail to each Holder of Debentures so tendered the Change of Control Payment for
such Debentures, and the Trustee will promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Debenture equal in
principal amount at maturity to any unpurchased portion of the Debentures
surrendered, if any; provided that each such new Debenture will be in a
principal amount of $1,000 or an integral multiple thereof. The Issuers will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be
applicable whether or not any other provisions of this Indenture are applicable.
Except as described above with respect to a Change of Control, this Indenture
does not contain provisions that permit the Holders of the Debentures to require
that the Issuers repurchase or redeem the Debentures in the event of a takeover,
recapitalization or similar transaction.
The Issuers 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 Indenture applicable to a Change of Control Offer
made by the Issuers and purchases all Debentures validly tendered and not
withdrawn under such Change of Control Offer.
Section 4.16. Sale Leaseback Transactions
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
Holdings or any of its Restricted Subsidiaries may enter into a sale and
leaseback transaction if (i) Holdings or such Restricted Subsidiary, as
applicable, could have (a) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant to
either (A) the Fixed Charge Coverage Ratio test set forth in the first paragraph
of Section 4.09 or (B) clause (ii) of Section 4.09 and (b) incurred a Lien to
secure such Indebtedness pursuant to Section 4.12, (ii) the gross cash proceeds
of such sale and leaseback transaction are at least equal to the fair market
value (as determined in good faith by the Management Committee and set forth in
an Officers' Certificate delivered to the Trustee) of the property that is the
subject of such sale and leaseback transaction and (iii) the transfer of assets
in such sale and leaseback transaction is permitted by, and Holdings applies the
proceeds of such transaction in compliance with Section 4.10.
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ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
Holdings shall not consolidate or merge with or into (whether or
not Holdings is the surviving corporation), or sell, assign, transfer, 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) Holdings is the surviving corporation or the entity or the Person formed by
or surviving any such consolidation or merger (if other than Holdings) or to
which such sale, assignment, transfer, 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
Holdings) or the entity or Person to which such sale, assignment, transfer,
conveyance or other disposition shall have been made assumes all the obligations
of Holdings under the Registration Rights Agreement, the Debentures and this
Indenture pursuant to supplemental indentures in forms reasonably satisfactory
to the Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; and (iv) except in the case of a merger of Holdings with or into
a Wholly Owned Restricted Subsidiary of Holdings and except in the case of a
merger entered into solely for the purpose of incorporating Holdings or
reincorporating Holdings in another jurisdiction, Holdings or the entity or
Person formed by or surviving any such consolidation or merger (if other than
Holdings), or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made will, 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 Consolidated Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09. Holdings
shall not, directly or indirectly, lease all or substantially all of its
properties or assets, in one or more related transactions, to any other Person.
The provisions of this covenant will not be applicable to a merger, sale,
assignment, transfer, conveyance or other disposition of assets between or among
Holdings and any of its Restricted Subsidiaries. Notwithstanding the foregoing,
Holdings is permitted to reorganize as a corporation in accordance with the
procedures established in this Indenture (and AC Holdings Corp. may thereafter
liquidate); provided that Holdings shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that such reorganization (and, if applicable, liquidation of AC
Holdings Corp.) is not adverse to holders of the Debentures from a U.S. federal
tax standpoint (it being recognized that such reorganization shall not be deemed
adverse to the holders of the Debentures solely because (i) of the accrual of
deferred tax liabilities resulting from such reorganization or (ii) the
successor or surviving corporation (a) is subject to income tax as a corporate
entity or (b) is considered to be an "includible corporation" of an affiliated
group of corporations within the meaning of the Code or any similar state or
local law) and certain other conditions are satisfied.
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 Holdings in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which Holdings 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 Holdings), and may
exercise every right and power of Holdings under this Indenture with the same
effect as if such successor Person had been named as
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Holdings herein; provided, however, that the predecessor Company shall not be
relieved from the obligation to pay the principal of and interest on the
Debentures except in the case of a sale of all of Holdings' 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) Holdings fails to pay interest on any Debentures when the same
becomes due and payable if the default continues for a period of 30 days;
(b) Holdings fails to pay the principal on any Debentures when such
principal becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Debentures tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer);
(c) Holdings or any of its Restricted Subsidiaries fails to comply
with the provisions of the covenants described in Section 4.10 or 4.15 hereof;
(d) Holdings defaults in the observance or performance of any other
covenant or agreement contained in this Indenture if the default continues for a
period of 30 days after the Issuers receive written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Debentures;
(e) Holdings fails to pay at final stated maturity (giving effect to
any extensions thereof) the principal amount of any Indebtedness of Holdings or
any Restricted Subsidiary (other than a Securitization Entity), which failure
continues for at least 10 days, or the acceleration of the maturity of any such
Indebtedness, which acceleration remains uncured and unrescinded for at least 10
days, if the aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $10.0
million or more at any time;
(f) one or more judgments in an aggregate amount in excess of $10.0
million shall have been rendered against the Issuers or any of their Significant
Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a
period of 60 days after such judgment or judgments become final and non
appealable;
(g) Holdings or any of its Significant Subsidiaries or any group of
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
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(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 Holdings or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of Holdings or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of the
property of Holdings or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of Holdings or any of its Significant
Subsidiaries or any group of 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.
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 Issuers, any
Significant Subsidiary or any group of Significant 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 outstanding
Debentures may declare the principal of and accrued interest on all the
Debentures to be due and payable by notice in writing to the Issuers and the
Trustee specifying the respective Event of Default and that such notice is a
"notice of acceleration" (the "Acceleration Notice"), and the same shall become
immediately due and payable. If an Event of Default specified in clause (g) or
(h) of Section 6.01 occurs with respect to the Issuers, any of Holdings'
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, then such amount shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder of Debentures.
At any time after a declaration of acceleration with respect to
the Debentures as described in the preceding paragraph, the Holders of a
majority in principal amount of Debentures may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict with
any judgment or decree, (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely
because of the acceleration, (iii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, (iv) if the Issuers have paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances and (v)
in the event of the cure or waiver of an Event of Default of the type described
in clause (vi) of the description above of Events of Default, the Trustee shall
have received an Officers' Certificate and an Opinion of Counsel that such Event
of Default has been cured or waived. The holders of a majority in principal
amount of Debentures may waive any existing Default or Event of Default under
this Indenture, and its consequences, except a default in the payment of the
principal of or interest on any Debentures.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding payment of the premium
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that the Issuers would have had to pay if the Issuers then had elected to redeem
the Debentures pursuant to Section 3.07, an equivalent premium shall also become
and be immediately due and payable to the extent permitted by law upon the
acceleration of the Debentures. If an Event of Default occurs prior to August 1,
2003 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Issuers with the intention of avoiding the prohibition on
redemption of the Debentures prior to August 1, 2003, then the premium set forth
below for each of the years beginning on August 1 of such year shall also become
immediately due and payable to the extent permitted by law upon the acceleration
of the Debentures (expressed as a percentage of the Accreted Value of the
Debentures on the date of payment that would otherwise be due but for the
provisions of this sentence):
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
1998........................................................... 117.833%
1999........................................................... 115.604%
2000........................................................... 113.375%
2001............................................................ 111.146%
2002............................................................ 108.917%
</TABLE>
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 Debentures or to enforce the performance of any
provision of the Debentures or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Debentures or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder of a Debenture 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 Debentures by notice to the Trustee may on behalf of the
Holders of all of the Debentures 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 Debentures (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Debentures 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
Debentures 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
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direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Debentures or that
may involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Debenture may pursue a remedy with respect to this
Indenture or the Debentures only if:
(a) the Holder of a Debenture 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 Debentures make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Debenture or Holders of Debentures 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 Debentures do not give the Trustee a
direction inconsistent with the request.
A Holder of a Debenture may not use this Indenture to prejudice
the rights of another Holder of a Debenture or to obtain a preference or
priority over another Holder of a Debenture.
Section 6.07. Rights of Holders of Debentures to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Debenture to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Debenture, on or after the
respective due dates expressed in the Debenture (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 Issuers for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Debentures 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 Debentures allowed in any judicial proceedings relative to the
Issuers (or any other obligor upon the Debentures), its creditors or its
property and shall be entitled and empowered to
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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 Debentures 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 Debentures for amounts due and unpaid on
the Debentures 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 Debentures for principal, premium and Liquidated
Damages, if any and interest, respectively; and
Third: to the Issuers 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 Debentures 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
Debenture pursuant to Section 6.07 hereof, or a suit by Holders of more than 10%
in principal amount of the then outstanding Debentures.
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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
negligent action, its own 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
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), (c), (e) and (f) of this Section and Section 7.02.
(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 Issuers. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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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 misconduct or 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 Holdings shall be sufficient if signed by an
Officer of Holdings.
(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.
(g) Except with respect to Section 4.01 hereof, the Trustee shall have no
duty to inquire as to the performance of Holding's covenants in Article 4
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.01(a), 6.01(b) and 4.01 or (ii) any Default or Event of Default of
which the Trustee shall have received written notification or obtained actual
knowledge.
(h) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Trustee
may, in its discretion, make such further inquiry or investigation into such
facts or matters as it may see fit and if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of Holding personally or by agent or attorney.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Debentures and may otherwise deal with the Issuers or any
Affiliate of the Issuers 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
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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 Debentures, it shall not
be accountable for the Issuers' use of the proceeds from the Debentures or any
money paid to the Issuers or upon the Issuers' 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
Debentures or any other document in connection with the sale of the Debentures
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 Debentures 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 Debenture, 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 Debentures.
Section 7.06. Reports by Trustee to Holders of the Debentures.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Debentures remain outstanding,
the Trustee shall mail to the Holders of the Debentures a brief report dated as
of such reporting date that complies with TIA (S) 313(a) (but if no event
described in TIA (S) 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA (S) 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of
Debentures shall be mailed to Holdings and filed with the SEC and each stock
exchange on which the Debentures are listed in accordance with TIA (S) 313(d).
Holdings shall promptly notify the Trustee when the Debentures are listed on any
stock exchange.
Section 7.07. Compensation and Indemnity.
The Issuers 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 Issuers 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 Issuers 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 Issuers (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Issuers or any Holder or
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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 Issuers promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Issuers shall not relieve the
Issuers of their obligations hereunder. The Issuers shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Issuers shall pay the reasonable fees and expenses of such
counsel. The Issuers need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The obligations of the Issuers under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Issuers' payment obligations in this Section, the
Trustee shall have a Lien prior to the Debentures on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Debentures. 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 (S) 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 Issuers. The Holders of Debentures
of a majority in principal amount of the then outstanding Debentures may remove
the Trustee by so notifying the Trustee and the Issuers in writing. The Issuers
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 Issuers 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 Debentures may appoint
a successor Trustee to replace the successor Trustee appointed by the Issuers.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or
the Holders of Debentures of at least 10% in principal amount of the then
outstanding Debentures 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 Debenture who
has been a Holder of a Debenture for at least six months, fails to comply with
Section 7.10, such Holder of a Debenture 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 Issuers. 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 Debentures. 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 Issuers' 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.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
Section 7.11. Preferential Collection of Claims Against Issuers.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 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 Issuers may, at the option of the Management Committee evidenced
by a resolution set forth in an Officer's Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof be
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applied to all outstanding Debentures upon compliance with the conditions set
forth below in this Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers 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 Debentures on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Issuers shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Debentures, 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 Debentures and this Indenture (and the Trustee, on demand
of and at the expense of the Issuers, 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 Debentures 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, if any, and interest on such Debentures
when such payments are due, (b) the Issuers' obligations with respect to such
Debentures under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Issuers'
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Issuers may exercise their 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 Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers 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 and 4.16 hereof with respect to the outstanding
Debentures on and after the date the conditions set forth in Section 8.04 are
satisfied (hereinafter, "Covenant Defeasance"), and the Debentures 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
Debentures shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding
Debentures, the Issuers 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
Debentures shall be unaffected thereby. In addition, upon the Issuers' 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 Debentures:
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In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Debentures, cash in U.S. 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, if any, interest and Liquidated
Damages, if any, on all outstanding Debentures on the stated maturity or on the
applicable redemption date, as the case may be, and the Issuers must specify
whether the Debentures are being defeased to maturity or to a particular
redemption date;
(b) in the case of an election under Section 8.02 hereof, the Issuers shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Issuers have
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 Debentures 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 Issuers 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 Debentures 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 Debentures 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 (including this Indenture and the Senior Credit Facilities) to which
Holdings or any of its Subsidiaries is a party or by which Holdings or any of
its Subsidiaries is bound;
(f) the Issuers shall have delivered to the Trustee an Opinion of Counsel
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 Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders of Debentures over the other creditors of the Issuers
with the intent of defeating, hindering, delaying or defrauding creditors of the
Issuers or others; and
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(h) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for 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
Debentures shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Debentures and this Indenture, to the payment, either
directly or through any Paying Agent (including the Issuers acting as Paying
Agent) as the Trustee may determine, to the Holders of such Debentures 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 Issuers 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
Debentures.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the request
of the Issuers 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 Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuers, in trust for the payment of the principal of, premium, if any,
or interest on any Debenture 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 Issuers on its request or (if then held by the Issuers) shall be
discharged from such trust; and the Holder of such Debenture shall thereafter,
as a secured creditor, look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuers 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 Issuers 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 Issuers.
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
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otherwise prohibiting such application, then the Issuers' obligations under this
Indenture and the Debentures 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 Issuers make any payment of principal of, premium, if any, or interest on
any Debenture following the reinstatement of their obligations, the Issuers
shall be subrogated to the rights of the Holders of such Debentures 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 Debentures.
Notwithstanding Section 9.02 of this Indenture, the Issuers and the
Trustee may amend or supplement this Indenture or the Debentures without the
consent of any Holder of Debentures:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Debentures in addition to or in place of
certificated Debentures 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 Issuer's obligations to the
Holders of the Debentures by a successor to the Issuers pursuant to Article 5
hereof;
(d) to make any change that would provide any additional rights or benefits
to the Holders of the Debentures or that does not adversely affect the legal
rights under this Indenture of any such Holder; or
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA; or
Upon the request of the Issuers accompanied by a resolution of the
Management Committee 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 Issuers 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 Debentures.
Except as provided below in this Section 9.02, the Issuers and the
Trustee may amend or supplement this Indenture (including Sections 3.09, 4.10
and 4.15 hereof), the Debentures may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the Debentures then
outstanding voting as a single class (including consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Debentures), 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 Debentures, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this
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Indenture or the Debentures may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Debentures voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Debentures).
Upon the request of the Issuers accompanied by a resolution of the
Management Committee 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 Debentures as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Issuers 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 Debentures
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 Issuers shall mail to the Holders of Debentures affected thereby
a notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers 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 Debentures then outstanding voting
as a single class may waive compliance in a particular instance by the Issuers
with any provision of this Indenture or the Debentures. However, without the
consent of each Holder affected, an amendment or waiver under this Section 9.02
may not (with respect to any Debentures held by a non-consenting Holder):
(a) reduce the principal amount of Debentures whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Debenture
or alter or waive any of the provisions with respect to the redemption of the
Debentures, except as provided above with respect to Section 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Debenture;
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Debentures (except a rescission of
acceleration of the Debentures by the Holders of at least a majority in
aggregate principal amount of the then outstanding Debentures and a waiver of
the payment default that resulted from such acceleration);
(e) make any Debenture payable in money other than that stated in the
Debentures;
(f) make any change in the provisions of this Indenture relating to waivers
of past Defaults or the rights of Holders of Debentures to receive payments of
principal of or interest on the Debentures;
(g) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
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Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Debentures
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 Debenture is a continuing consent by the Holder of a
Debenture and every subsequent Holder of a Debenture or portion of a Debenture
that evidences the same debt as the consenting Holder's Debenture, even if
notation of the consent is not made on any Debenture. However, any such Holder
of a Debenture or subsequent Holder of a Debenture may revoke the consent as to
its Debenture 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 Debentures.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Debenture thereafter authenticated. The Issuers in
exchange for all Debentures may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Debentures that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Debenture
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 Issuers may not sign an amendment or supplemental Indenture until the
Management Committee 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.
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA (S) 318(c), the imposed duties shall control.
Section 10.02. Notices.
Any notice or communication by the Issuers 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
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If to the Issuers:
c/o Anthony Crane Rental, L.P.
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Telecopier No.: (412) 469-0691
Attention: Investor Services
With a copy to:
Kirkland & Ellis
153 East 53rd Street
New York, NY 10022
Telecopier No.: (412) 446-4800
Attention: Lance Balk, Esq.
If to the Trustee:
State Street Bank and Trust Company
Goodwin Square, 23rd Floor
225 Asyum Street
Telecopier No.: 860-244-1889
Attention: Dennis Fisher
The Issuers 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 (S) 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 Issuers mail a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
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Section 10.03. Communication by Holders of Debentures with Other Holders of
Debentures.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Debentures. The
Issuers, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take
any action under this Indenture, the Issuers 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 11.05 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 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 10.05. 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 (S) 314(a)(4)) shall comply with the provisions of TIA
(S) 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 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 10.06. 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 10.07. No Personal Liability of Partners, Directors, Officers,
Employees and Stockholders.
No partner, director, officer, employee, incorporator or stockholder
of the Issuers, as such, shall have any liability for any obligations of the
Issuers under the Debentures or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
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Debentures by accepting a Debenture waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Debentures.
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.
Section 10.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE DEBENTURES 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 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of Holdings or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 10.10. Successors.
All agreements of the Issuers in this Indenture and the Debentures
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
Section 10.11. Severability.
In case any provision in this Indenture or in the Debentures 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 10.12. 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 10.13. 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]
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SIGNATURES
Dated as of July 22, 1998
Anthony Crane Rental holdings, L.P.,
By: Anthony Crane Rental, Inc.,
its general partner
By: /s/ David Mahokey
-------------------------------------
Name: David Mahokey
Title: Chief Finacial Officer
By: /s/ Dale Buckwalter
-------------------------------------
Name: Dale Buckwalter
Title: Vice President
Anthony Crane Holdings Capital Corporation
By: /s/ David Mahokey
-------------------------------------
Name: David Mahokey
Title: Chief Financial Officer
State Street Bank and Trust Company
By: /s/ Dennis Fisher
-------------------------------------
Name: Dennis Fisher
Title: Assistant Vice President
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EXHIBIT A-1
(Face of Global Debenture)
================================================================================
(a) CUSIP/CINS
13 3/8% [Series A] [Series B] Senior Discount Debentures due 2009
No.__ $_______
Anthony Crane Rental holdings, L.P.
Anthony Crane holdings Capital Corporation
promises to pay to ___________________________________________________
or registered assigns,
the principal sum of __________________________________________________
Dollars on August 1, 2009.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Dated July 22, 1998
Anthony Crane Holdings Capital Corporation Anthony Crane Rental holdings,
L.P.
By: ACR Management, LLC, its
general partner
By:_____________________________ BY:___________________________
Name: Name:
Title: Title:
(SEAL) (SEAL)
This is one of the Global
Debentures referred to in the
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
By:_____________________________
A-1-1
<PAGE>
================================================================================
(Back of Debenture)
13 3/8% [Series A] [Series B] Senior Discount Debentures due 2009
THIS GLOBAL DEBENTURE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS DEBENTURE) 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
DEBENTURE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)
OF THE INDENTURE, (III) THIS GLOBAL DEBENTURE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
DEBENTURE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE ISSUERS.
THIS DEBENTURE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
1. REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS
DEBENTURE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(A) (1), (2), (3) OR (7) OR REGULATION D UNDER THE SECURITIES ACT (AN
"IAI"),
2. AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS DEBENTURE EXCEPT
(A) TO HOLDINGS OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS DEBENTURE (THE FORM OF WHICH CAN BE OBTAINED
FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF DEBENTURES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO
HOLDINGS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO HOLDINGS) OR
(G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND
A-1-2
<PAGE>
3. AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Anthony Crane Rental Holdings, L.P., a Pennsylvania
limited partnership (the "Company"), and Anthony Crane Holdings Capital
Corporation, a Delaware corporation ("AC Holdings Corp." and, together with
Holdings, the "Issuers"), promise to pay interest on the principal amount of
this Debenture at 13 3/8% per annum from August 1, 2003 until maturity on August
1, 2009 and shall pay the Liquidated Damages payable pursuant to Section 5 of
the Registration Rights Agreement referred to below. The Debentures will accrete
at a rate of 13 3/8% per annum, compounded semi-annually to an aggregate
principal amount of $48.0 million on August 1, 2003. Thereafter, interest on the
Debentures will accrue at the rate of 13 3/8% per annum and will be payable
semi-annually in arrears on February 1 and August 1 (or if any such day is not a
Business Day, on the next succeeding Business Day (each, an "Interest Payment
Date")), commencing on February 1, 2004, to Holders of record on the immediately
preceding January 15 and July 15. No cash interest will be payable on the
Debentures prior to August 1, 2003. Interest on the Debentures will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from August 1, 2003. The Issuers 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 (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 Issuers will pay interest on the
Debentures (except defaulted interest) and Liquidated Damages to the Persons who
are registered Holders of Debentures at the close of business on the January 15
or July 15 next preceding the Interest Payment Date, even if such Debentures 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 Debentures will be payable as to principal, premium and Liquidated
Damages, if any, and interest at the office or agency of Holdings maintained for
such purpose within or without the City and State of New York, or, at the option
of Holdings, payment of interest and Liquidated Damages 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 on, all Global Debentures and all other Debentures the Holders of which
shall have provided wire transfer instructions to Holdings 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, the Trustee under the Indenture, will act as Paying Agent and
Registrar. Holdings may change any
A-1-3
<PAGE>
Paying Agent or Registrar without notice to any Holder. Holdings or any of its
Subsidiaries may act in any such capacity.
4. Indenture. The Issuers issued the Debentures under an Indenture
dated as of July 22, 1998 (the "Indenture") among the Issuers and the Trustee.
The terms of the Debentures 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 (S)(S) 77aaa-77bbbb). The Debentures 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 Debenture conflicts
with the express provisions of the Indenture, the provisions of the indenture
shall govern and be controlling. The Debentures are obligations of Holdings
limited to $48.0 million in aggregate principal amount.
5. Optional Redemption.
(a) Except as set forth below, the Debentures will not be redeemable
at the Issuers' option prior to August 1, 2003. Thereafter, the Debentures will
be subject to redemption at any time at the option of the Issuers, 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 August
1 of the years indicated below:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- --------------------
<S> <C>
2003..................................... 106.688%
2004..................................... 104.458%
2005..................................... 102.229%
2006 and thereafter...................... 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to August 1,
2001, the Issuers may on any one or more occasions redeem up to 35% of the
aggregate principal amount at maturity of Debentures originally issued under the
Indenture at a redemption price of 113.375% of the Accreted Value thereof (as
determined on the redemption date), plus Liquidated Damages thereon, if any, to
the redemption date, with the net cash proceeds of any Equity Offerings;
provided that at least 65% of the aggregate principal amount at maturity of
Debentures originally issued remain outstanding immediately after the occurrence
of such redemption (excluding Debentures held by Holdings and its Subsidiaries);
and provided further that such redemption shall occur within 120 days of the
date of the closing of any such Equity Offering.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Issuers shall not be
required to make mandatory redemption payments with respect to the Debentures.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, Holdings 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 Debentures 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 10 days following any
Change of Control, Holdings shall mail a
A-1-4
<PAGE>
notice to each Holder setting forth the procedures governing the Change of
Control Offer as required by the Indenture.
(b) If Holdings or a Subsidiary consummates any Asset Sales, within
25 days of each date on which the aggregate amount of Net Proceeds Offer Amount
exceeds $10 million, Holdings shall commence an offer to all Holders of
Debentures ("Net Proceeds Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Debentures that may be purchased out of
the Net Proceeds Offer Amount 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 the aggregate amount of Debentures tendered pursuant to a Net
Proceeds Offer is less than the Net Proceeds Offer Amount, Holdings (or such
Subsidiary) may use such deficiency for general corporate purposes. If the
aggregate principal amount of Debentures surrendered by Holders thereof exceeds
the amount of Net Proceeds Offer Amount, the Trustee shall select the Debentures
to be purchased on a pro rata basis. Holders of Debentures that are the subject
of an offer to purchase will receive an Net Proceeds Offer from Holdings prior
to any related purchase date and may elect to have such Debentures purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Debentures.
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 Debentures are to be redeemed at its registered address.
Debentures in denominations larger than $1,000 may be redeemed in part but only
in whole multiples of $1,000, unless all of the Debentures held by a Holder are
to be redeemed. On and after the redemption date interest ceases to accrue on
Debentures or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Debentures are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Debentures may be registered and
Debentures 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 Holdings may require a Holder to pay any
taxes and fees required by law or permitted by the Indenture. Holdings need not
exchange or register the transfer of any Debenture or portion of a Debenture
selected for redemption, except for the unredeemed portion of any Debenture
being redeemed in part. Also, Holdings need not exchange or register the
transfer of any Debentures for a period of 15 days before a selection of
Debentures 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 Debenture may
be treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Debentures may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the then
outstanding Debentures voting as a single class, and any existing default or
compliance with any provision of the Indenture or the Debentures may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Debentures voting as a single class. Without the consent of any
Holder of a Debenture, the Indenture or the Debentures may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Debentures in addition to or in place of certificated Debentures,
to provide for the assumption of Holdings' obligations to Holders of the
Debentures in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Debentures or
that does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the
A-1-5
<PAGE>
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act.
12. Defaults and Remedies. Events of Default include: (i) Holdings
fails to pay interest on any Debentures when the same becomes due and payable if
the default continues for a period of 30 days, (ii) Holdings fails to pay the
principal on any Debentures when such principal becomes due and payable, at
maturity, upon redemption or otherwise (including the failure to make a payment
to purchase Debentures tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer), (iii) Holdings or any of its Restricted Subsidiaries fails to
comply with the provisions of the covenants described in Section 4.10 or 4.15 of
the Indenture, (iv) Holdings defaults in the observance or performance of any
other covenant or agreement contained in the Indenture if the default continues
for a period of 30 days after the Issuers receive written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Debentures,
(v) Holdings fails to pay at final stated maturity (giving effect to any
extensions thereof) the principal amount of any Indebtedness of Holdings or any
Restricted Subsidiary (other than a Securitization Entity), which failure
continues for at least 10 days, or the acceleration of the maturity of any such
Indebtedness, which acceleration remains uncured and unrescinded for at least 10
days, if the aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $10.0
million or more at any time, (vi) certain final judgments for the payment of
money that remain undischarged for a period of 60 days, and (vii) certain events
of bankruptcy or insolvency with respect to Holdings or any of its Significant
Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Debentures may declare all the Debentures 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 Debentures will
become due and payable without further action or notice. Holders may not
enforce the Indenture or the Debentures except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Debentures may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of the Debentures notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Debentures then outstanding by notice to the Trustee may
on behalf of the Holders of all of the Debentures 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 interest on, or the principal of,
the Debentures. Holdings is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and Holdings 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 Holdings or its Affiliates, and may otherwise deal with Holdings or
its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A partner, director, officer,
employee, incorporator or stockholder, of Holdings, as such, shall not have any
liability for any obligations of the Issuers under the Debentures 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 Debenture waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Debentures.
A-1-6
<PAGE>
15. Authentication. This Debenture 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 Debentures and
Restricted Certificated Debentures. In addition to the rights provided to
Holders of Debentures under the Indenture, Holders of Restricted Global
Debentures and Restricted Certificated Debentures shall have all the rights set
forth in the Registration Rights Agreement dated as of July 22, 1998, between
the Issuers 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, Holdings has caused
CUSIP numbers to be printed on the Debentures 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 Debentures
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
A-1-7
<PAGE>
Holdings 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:
c/o Anthony Crane Rental, L.P.
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Attention: Investor Services
A-1-8
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign and
transfer this Debenture 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 Debenture on the books of the Issuers. The agent may substitute
another to act for him.
Date: _____________
Your Signature:_______________________
(Sign exactly as your name appears on the
face of this Debenture)
SIGNATURE GUARANTEE.
A-1-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Debenture purchased by the Issuers
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 Debenture purchased by
the Issuers 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 Debenture)
Tax Identification No:___________________
Signature Guarantee.
A-1-10
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL DEBENTURE
The following exchanges of a part of this Global Debenture for an
interest in another Global Debenture or for a Certificated Debenture, or
exchanges of a part of another Global Debenture or Certificated Debenture for an
interest in this Global Debenture, have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of decrease Amount of increase at maturity of this authorized officer
in Principal Amount in Principal Amount Global Debenture of Trustee or
at maturity of this at maturity of this following such Debenture
Date of Exchange Global Debenture Global Debenture decrease (or increase) Custodian
- ------------------ ---------------------- --------------------- -------------------------- ---------------------
<S> <C> <C> <C> <C>
</TABLE>
A-1-11
<PAGE>
EXHIBIT A-2
(Face of Regulation S Temporary Global Debenture)
================================================================================
(b) CUSIP/CINS
13 3/8% [Series A] [Series B] Senior Discount Debentures due 2009
No.__ $_________
Anthony Crane Rental Holdings, L.P.
Anthony Crane Holdings Capital Corporation
promises to pay to________________________________________________
or registered assigns,
the principal sum of________________________________________________
Dollars on August 1, 2009.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Dated July 22, 1998
Anthony Crane Holdings Capital Corporation Anthony Crane Rental Holdings,
L.P.
By: ACR Management, LLC, its
general partner
By:_________________________ By:____________________________
Name: Name:
Title: Title:
(SEAL) (SEAL)
This is one of the Global
Debentures referred to in the
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
A-2-1
<PAGE>
By:_____________________
================================================================================
A-2-2
<PAGE>
(Back of Regulation S Temporary Global Debenture)
13 3/8% [Series A] [Series B] Senior Discount Debentures due 2009
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL DEBENTURE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED DEBENTURES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL DEBENTURE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR DEBENTURES IN
DEFINITIVE FORM, THIS DEBENTURE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
TO HOLDINGS OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE DEBENTURE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE DEBENTURE
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 DEBENTURE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE DEBENTURE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF HOLDINGS
THAT (A) SUCH DEBENTURE 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 OF 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 FOREIGN 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 HOLDINGS SO REQUESTS), (2) TO HOLDINGS OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
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
A-2-3
<PAGE>
PURCHASER OF THE DEBENTURE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Anthony Crane Rental Holdings, L.P., a Pennsylvania
limited partnership (the "Company"), and Anthony Crane Holdings Capital
Corporation, a Delaware corporation ("AC Holdings Corp." and, together with
Holdings, the "Issuers"), promise to pay interest on the principal amount of
this Debenture at 13 3/8% per annum from August 1, 2003 until maturity on
August 1, 2009 and shall pay the Liquidated Damages payable pursuant to Section
5 of the Registration Rights Agreement referred to below. The Debentures will
accrete at a rate of 13 3/8% per annum, compounded semi-annually to an
aggregate principal amount of $48.0 million on August 1, 2003. Thereafter,
interest on the Debentures will accrue at the rate of 13 3/8% per annum and
will be payable semi-annually in arrears on February 1 and August 1 (or if any
such day is not a Business Day, on the next succeeding Business Day (each, an
"Interest Payment Date")), commencing on February 1, 2004, to Holders of record
on the immediately preceding January 15 and July 15. No cash interest will be
payable on the Debentures prior to August 1, 2003. Interest on the Debentures
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from August 1, 2003. The Issuers 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 (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 Debenture is exchanged for
one or more Regulation S Permanent Global Debentures, the Holder hereof shall
not be entitled to receive payments of interest hereon; until so exchanged in
full, this Regulation S Temporary Global Debenture shall in all other respects
be entitled to the same benefits as other Senior Subordinated Debentures under
the Indenture.
2. Method of Payment. The Issuers will pay interest on the Debentures
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Debentures at the close of business on the January 15 or
July 15 next preceding the Interest Payment Date, even if such Debentures 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 Debentures will be payable as to principal, premium, interest and
Liquidated Damages at the office or agency of Holdings maintained for such
purpose within or without the City and State of New York, or, at the option of
Holdings, payment of interest and Liquidated Damages 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 on, all Global Debentures and all other Debentures the Holders of which
shall have provided wire transfer instructions to Holdings 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
Co., the Trustee under the Indenture, will act as Paying Agent and Registrar.
Holdings may change any Paying
A-2-4
<PAGE>
Agent or Registrar without notice to any Holder. Holdings or any of its
Subsidiaries may act in any such capacity.
4. Indenture. The Issuers issued the Debentures under an Indenture
dated as of July 22, 1998 (the "Indenture") among the Issuers and the Trustee.
The terms of the Debentures 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 (S)(S) 77aaa-77bbbb). The Debentures are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Debentures are secured obligations of Holdings
limited to $48.0 million in aggregate principal amount.
5. Optional Redemption.
(a) Except as provided below, the Debentures will not be redeemable at the
Issuers' option prior to August 1, 2003. Thereafter, the Debentures will be
subject to redemption at any time at the option of the Issuers, 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 August
1 of the years indicated below:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
- ---- ----------------
<S> <C>
2003....................................................... 106.688%
2004....................................................... 104.458%
2005....................................................... 102.229%
2006 and thereafter........................................ 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to August 1,
2001, the Issuers may on any one or more occasions redeem up to 35% of the
aggregate principal amount at maturity of Debentures originally issued under the
Indenture at a redemption price of 113.375% of the Accreted Value thereof (as
determined on the redemption date), plus Liquidated Damages thereon, if any, to
the redemption date, with the net cash proceeds of any Equity Offerings;
provided that at least 65% of the aggregate principal amount at maturity of
Debentures originally issued remain outstanding immediately after the occurrence
of such redemption (excluding Debentures held by Holdings and its Subsidiaries);
and provided further that such redemption shall occur within 120 days of the
date of the closing of any such Equity Offering.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Issuers shall not be
required to make mandatory redemption payments with respect to the Debentures.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, Holdings 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 Debentures at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (the "Change of
Control Payment"). Within 10 days following any Change of Control, Holdings
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
A-2-5
<PAGE>
(b) If Holdings or a Subsidiary consummates any Asset Sales, within 25
days of each date on which the aggregate amount of Net Proceeds Offer Amount
exceeds $10 million, Holdings shall commence an offer to all Holders of
Debentures ("Net Proceeds Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Debentures that may be purchased out of
the Net Proceeds Offer Amount 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 the aggregate amount of Debentures tendered pursuant to a Net
Proceeds Offer is less than the Net Proceeds Offer Amount, Holdings (or such
Subsidiary) may use such deficiency for general corporate purposes. If the
aggregate principal amount of Debentures surrendered by Holders thereof exceeds
the amount of Net Proceeds Offer Amount, the Trustee shall select the Debentures
to be purchased on a pro rata basis. Holders of Debentures that are the subject
of an offer to purchase will receive an Net Proceeds Offer from Holdings prior
to any related purchase date and may elect to have such Debentures purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Debentures.
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 Debentures are to be redeemed at its registered address.
Debentures in denominations larger than $1,000 may be redeemed in part but only
in whole multiples of $1,000, unless all of the Debentures held by a Holder are
to be redeemed. On and after the redemption date interest ceases to accrue on
Debentures or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Debentures are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Debentures may be registered and
Debentures 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 Holdings may require a Holder to pay any
taxes and fees required by law or permitted by the Indenture. Holdings need not
exchange or register the transfer of any Debenture or portion of a Debenture
selected for redemption, except for the unredeemed portion of any Debenture
being redeemed in part. Also, it need not exchange or register the transfer of
any Debentures for a period of 15 days before a selection of Debentures to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
This Regulation S Temporary Global Debenture is exchangeable in whole
or in part for one or more Global Debentures only (i) on or after the
termination of the 40-day distribution compliance 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 Debenture for one or more Global
Debentures, the Trustee shall cancel this Regulation S Temporary Global
Debenture.
10. Persons Deemed Owners. The registered Holder of a Debenture may
be treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Debentures may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the then
outstanding Debentures, and any existing default or compliance with any
provision of the Indenture or the Debentures may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding
Debentures. Without the consent of any Holder of a Debenture, the Indenture or
the Debentures may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Debentures in addition to or in
place
A-2-6
<PAGE>
of certificated Debentures, to provide for the assumption of Holdings'
obligations to Holders of the Debentures in case of a merger or consolidation,
to make any change that would provide any additional rights or benefits to the
Holders of the Debentures or that does not adversely affect the legal rights
under the Indenture of any such Holder, or to comply with the requirements of
the Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
12. Defaults and Remedies. Events of Default include: (i) Holdings
fails to pay interest on any Debentures when the same becomes due and payable if
the default continues for a period of 30 days, (ii) Holdings fails to pay the
principal on any Debentures when such principal becomes due and payable, at
maturity, upon redemption or otherwise (including the failure to make a payment
to purchase Debentures tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer), (iii) Holdings or any of its Restricted Subsidiaries fails to
comply with the provisions of the covenants described in Section 4.10 or 4.15 of
the Indenture, (iv) Holdings defaults in the observance or performance of any
other covenant or agreement contained in the Indenture if the default continues
for a period of 30 days after the Issuers receive written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Debentures,
(v) Holdings fails to pay at final stated maturity (giving effect to any
extensions thereof) the principal amount of any Indebtedness of Holdings or any
Restricted Subsidiary (other than a Securitization Entity), which failure
continues for at least 10 days, or the acceleration of the maturity of any such
Indebtedness, which acceleration remains uncured and unrescinded for at least 10
days, if the aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $10.0
million or more at any time, (vi) certain final judgments for the payment of
money that remain undischarged for a period of 60 days, and (vii) certain events
of bankruptcy or insolvency with respect to Holdings or any of its Significant
Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Debentures may declare all the Debentures 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 Debentures will
become due and payable without further action or notice. Holders may not
enforce the Indenture or the Debentures except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Debentures may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of the Debentures notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Debentures then outstanding by notice to the Trustee may
on behalf of the Holders of all of the Debentures 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 interest on, or the principal of,
the Debentures. Holdings is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and Holdings 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 Holdings or its Affiliates, and may otherwise deal with Holdings or
its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A partner, director, officer,
employee, incorporator or stockholder, of the Issuers, as such, shall not have
any liability for any obligations of the Issuers under the Debentures or the
Indenture or for any claim based on, in respect of, or by reason of,
A-2-7
<PAGE>
such obligations or their creation. Each Holder by accepting a Debenture waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Debentures.
15. Authentication. This Debenture 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 Debentures and
Restricted Certificated Debentures. In addition to the rights provided to
Holders of Debentures under the Indenture, Holders of Restricted Global
Debentures and Restricted Certificated Debentures shall have all the rights set
forth in the Registration Rights Agreement dated as of July 22, 1998, between
the Issuers 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, Holdings has caused
CUSIP numbers to be printed on the Debentures 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 Debentures
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
Holdings 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:
c/o Anthony Crane Rental, L.P.
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Attention: Investor Services
A-2-8
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign and
transfer this Debenture 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 Debenture on the books of the Issuers. The agent may
substitute another to act for him.
________________________________________________________________________________
Date:_________
Your Signature:__________________
(Sign exactly as your name appears on the face of this Debenture)
Signature Guarantee.
A-2-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Debenture purchased by the Issuers
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 Debenture purchased by
the Issuers 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 Debenture)
Tax Identification No.:_____________
Signature Guarantee.
A-2-10
<PAGE>
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL DEBENTURE
The following exchanges of a part of this Regulation S Temporary
Global Debenture for an interest in another Global Debenture, or of other
Restricted Global Debentures for an interest in this Regulation S Temporary
Global Debenture, have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of decrease Amount of increase at maturity of this authorized officer
in Principal Amount in Principal Amount Global Debenture of Trustee or
at maturity of this at maturity of this following such Debenture
Date of Exchange Global Debenture Global Debenture decrease (or increase) Custodian
- ---------------- ------------------- -------------------- ---------------------- -------------------
<S> <C> <C> <C> <C>
</TABLE>
A-2-11
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Anthony Crane Rental Holdings, L.P.
Anthony Crane Holdings Capital Corporation
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
[Registrar address block]
Re: 13 3/8% Senior Discount Debentures due 2009
-------------------------------------------
Reference is hereby made to the Indenture, dated as of July 22, 1998
(the "Indenture"), between Anthony Crane Rental Holdings L.P. and Anthony Crane
---------
Holdings Capital Corporation, as issuers (the "Issuers"), and State Street Bank
-------
and Trust Company, 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
----------
Debenture[s] or interest in such Debenture[s] specified in Annex A hereto, in
the principal amount of $___________ in such Debenture[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
----------------------------------------------------------------------
RULE 144A GLOBAL DEBENTURE OR A CERTIFICATED DEBENTURE 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 Certificated Debenture is being transferred to a Person
that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Certificated Debenture 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 Certificated Debenture will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Rule 144A Global Debenture and/or the Certificated Debenture 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 DEBENTURE, THE REGULATION S GLOBAL DEBENTURE OR A
- -------------------------------------------------------------------------------
CERTIFICATED DEBENTURE 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
B-1
<PAGE>
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 Distribution Compliance
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 Certificated Debenture will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Debenture , the Temporary Regulation S Global Debenture
and/or the Certificated Debenture and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
-------------------------------------------------------------------
INTEREST IN THE IAI GLOBAL DEBENTURE OR A CERTIFICATED DEBENTURE 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 Debentures and
Restricted Certificated Debentures 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 Holdings 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 Debenture or Restricted Certificated Debentures and the
requirements of the exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the Indenture
and (2) if such Transfer is in respect of a principal amount of Debentures at
the time of transfer of less than $250,000, 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 Certificated
Debenture will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the IAI Global Debenture and/or the
Certificated Debentures and in the Indenture and the Securities Act.
B-2
<PAGE>
4. [ ] Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Debenture or of an Unrestricted Certificated Debenture.
(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 Certificated
Debenture will no longer be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Debentures, on
Restricted Certificated Debentures 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 Certificated Debenture will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Debentures, on Restricted Certificated Debentures 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 Certificated Debenture will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Debentures or Restricted Certificated Debentures and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of Holdings.
____________________________________
[Insert Name of Transferor]
By:__________________________________
Name:
Title:
Dated:_____, ____
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] Rule 144A Global Debenture (CUSIP _________), or
(ii) [_] Regulation S Global Debenture (CUSIP _________), or
(iii) [_] IAI Global Debenture (CUSIP ________); or
(b) [_] a Restricted Certificated Debenture.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] Rule 144A Global Debenture (CUSIP ________), or
(ii) [_] Regulation S Global Debenture (CUSIP ________), or
(iii) [_] IAI Global Debenture (CUSIP ________); or
(iv) [_] Unrestricted Global Debenture (CUSIP ________); or
(b) [_] a Restricted Certificated Debenture; or
(c) [_] an Unrestricted Certificated Debenture,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Anthony Crane Rental Holdings, L.P.
Anthony Crane Holdings Capital Corporation
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
[Registrar address block]
Re: 13 3/8% Senior Discount Debentures due 2009
-------------------------------------------
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of July 22, 1998 (the
"Indenture"), among Anthony Crane Rental Holdings, L.P. and Anthony Crane
---------
Holdings Capital Corporation, as issuers (the "Issuers"), and State Street Bank
-------
and Trust Company, 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
-----
Debenture[s] or interest in such Debenture[s] specified herein, in the principal
amount of $____________ in such Debenture[s] or interests (the "Exchange"). In
--------
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED CERTIFICATED DEBENTURES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL DEBENTURE FOR UNRESTRICTED CERTIFICATED DEBENTURES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL DEBENTURE
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
--------------------------------------------------
RESTRICTED GLOBAL DEBENTURE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL
- ----------------------------------------------------------------------------
DEBENTURE. In connection with the Exchange of the Owner's beneficial interest
- ---------
in a Restricted Global Debenture for a beneficial interest in an Unrestricted
Global Debenture 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 Debentures 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 Debenture 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 DEBENTURE TO UNRESTRICTED CERTIFICATED DEBENTURE. In
- ------------------------------------------------------------------
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Debenture for an Unrestricted Certificated Debenture, the Owner hereby
certifies (i) the Certificated Debenture 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 Debentures
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
C-1
<PAGE>
required in order to maintain compliance with the Securities Act and (iv) the
Certificated Debenture 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 CERTIFICATED DEBENTURE
-----------------------------------------------------------
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL DEBENTURE. In connection with
- ----------------------------------------------------------
the Owner's Exchange of a Restricted Certificated Debenture for a beneficial
interest in an Unrestricted Global Debenture, 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 Certificated Debentures 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 CERTIFICATED DEBENTURE
-----------------------------------------------------------
TO UNRESTRICTED CERTIFICATED DEBENTURE. In connection with the Owner's Exchange
- --------------------------------------
of a Restricted Certificated Debenture for an Unrestricted Certificated
Debenture, the Owner hereby certifies (i) the Unrestricted Certificated
Debenture 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 Certificated Debentures 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
Certificated Debenture is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED CERTIFICATED DEBENTURES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL DEBENTURES FOR RESTRICTED CERTIFICATED DEBENTURES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL DEBENTURES
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
--------------------------------------------------
RESTRICTED GLOBAL DEBENTURE TO RESTRICTED CERTIFICATED DEBENTURE. In connection
- ----------------------------------------------------------------
with the Exchange of the Owner's beneficial interest in a Restricted Global
Debenture for a Restricted Certificated Debenture with an equal principal
amount, the Owner hereby certifies that the Restricted Certificated Debenture 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 Certificated Debenture issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Certificated Debenture and in the Indenture and the Securities
Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED DEBENTURE
-----------------------------------------------------------
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL DEBENTURE. In connection with the
- -------------------------------------------------------
Exchange of the Owner's Restricted Certificated Debenture for a beneficial
interest in the [CHECK ONE] " Rule 144A Global Debenture, " Regulation S Global
Debenture, " IAI Global Debenture 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
Debentures 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 Debenture and in the Indenture and the
Securities Act.
C-2
<PAGE>
This certificate and the statements contained herein are
made for your benefit and the benefit of Holdings.
___________________________________
[Insert Name of Owner]
By: _______________________________
Name:
Title:
Dated: ________________, ____
C-3
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Anthony Crane Rental Holdings, L.P.
Anthony Crane Holdings Capital Corporation
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
[Registrar address block]
Re: 13 3/8% Senior Discount Debentures due 2009
-------------------------------------------
Reference is hereby made to the Indenture, dated as of July 22, 1998
(the "Indenture"), among Anthony Crane Rental Holdings, L.P. and Anthony Crane
---------
Holdings Capital Corporation, as issuers (the "Issuers"), and State Street Bank
-------
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) [_] a beneficial interest in a Global Debenture, or
(b) [_] a Certificated Debenture,
we confirm that:
1. We understand that any subsequent transfer of the Debentures
or any interest therein is subject to certain restrictions and conditions set
forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Debentures or any interest therein
except in compliance with, such restrictions and conditions and the United
States Securities Act of 1933, as amended (the "Securities Act").
--------------
2. We understand that the offer and sale of the Debentures have
not been registered under the Securities Act, and that the Debentures and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which
we are acting as hereinafter stated, that if we should sell the Debentures or
any interest therein, we will do so only (A) to Holdings or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (c) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to Holdings
a signed letter substantially in the form of this letter and , if such transfer
is in respect of a principal amount of Debentures, at the time of transfer of
less than $250,000, an Opinion of Counsel in form reasonably acceptable to
Holdings to the effect that such transfer is in compliance with the Securities
Act, (D) outside the United States in accordance with Rule 904 of Regulation S
under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under
the Securities Act or (F) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person purchasing the
Certificated Debenture or beneficial interest in a Global Debenture from us in a
transaction meeting the requirements of clauses (A)
D-1
<PAGE>
through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Debentures or
beneficial interest therein, we will be required to furnish to you and Holdings
such certifications, legal opinions and other information as you and Holdings
may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Debentures purchased by
us will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Debentures or beneficial interest therein
acquired by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Debentures, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring the Debentures or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and Holdings are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
__________________________________________
[Insert Name of Accredited Investor]
By:_______________________________
Name:
Title:
Dated: __________________, ____
D-2
<PAGE>
EXHIBIT 10.1
<PAGE>
ANTHONY CRANE RENTAL HOLDINGS, L.P.
ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
$48,000,000
13 3/8% Senior Discount Debentures due 2009
Purchase Agreement
July 16, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
<PAGE>
$48,000,000
13 3/8% Senior Discount Debentures due 2009
of
Anthony Crane Rental Holdings, L.P.
and
Anthony Crane Holdings Capital Corporation
PURCHASE AGREEMENT
July 16, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
c/o Donaldson, Lukfin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Ladies and Gentlemen:
Anthony Crane Rental Holdings L.P., a Pennsylvania limited partnership
(the "COMPANY"), and Anthony Crane Holdings Capital Corporation, a Delaware
-------
corporation ("AC CAPITAL CORP." and, together with the COMPANY, the "ISSUERS"),
--------------- ------- -------
propose to issue and sell to Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ") and Goldman, Sachs & Co. ("GOLDMAN SACHS" and, together with DLJ, the
-------------
"INITIAL PURCHASERS") an aggregate of $48,000,000 in principal amount of their
- -------------------
13 3/8% Senior Discount Debentures due 2009 (the "SERIES A DEBENTURES"),
-------------------
subject to the terms and conditions set forth herein. The Series A Debentures
are to be issued pursuant to the provisions of an indenture (the "INDENTURE"),
---------
to be dated as of the Closing Date (as defined below), among the Issuers (as
defined below) and State Street Bank and Trust Company, as trustee (the
"TRUSTEE"). The Series A Debentures and the Series B Debentures (as defined
-------
below) issuable in exchange therefor are collectively referred to herein as the
("DEBENTURES). Capitalized terms used but not defined herein shall have the
----------
meanings given to such terms in the Indenture.
1. OFFERING MEMORANDUM. The Series A Debentures will be offered and
-------------------
sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Issuers have prepared a preliminary offering memorandum, dated July
---
15, 1998 (the "PRELIMINARY OFFERING MEMORANDUM") and a final offering
-------------------------------
memorandum, dated July 16, 1998 (the "OFFERING MEMORANDUM"), relating to the
-------------------
Series A Debentures.
<PAGE>
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Debentures (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS DEBENTURE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE ACT)(a "QIB"), (B) IT HAS
ACQUIRED THIS DEBENTURE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE ACT OR (iii) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE ACT (AN "IAI"), (2) AGREES THAT IT
WILL NOT RESELL OR OTHERWISE TRANSFER THIS DEBENTURE EXCEPT (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
DEBENTURE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF DEBENTURES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS DEBENTURE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
ACT. THE INDENTURE CONTAINS A
2
<PAGE>
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS DEBENTURE IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
-------------------------------
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Issuers agree to issue
and sell to the Initial Purchasers, and each Initial Purchaser agrees, severally
and not jointly, to purchase from the Issuers, the principal amount of Series A
Debentures set forth opposite the name of such Initial Purchaser on Schedule A
hereto at a purchase price equal to 50.349% of the principal amount thereof (the
"PURCHASE PRICE").
--------------
3. TERMS OF OFFERING. The Initial Purchasers have advised the
-----------------
Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALES") of
--------------
the Series A Debentures purchased hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely to (i) persons whom the
Initial Purchasers reasonably believe to be "qualified institutional buyers" as
defined in Rule 144A under the Act ("QIBS"), and (ii) persons permitted to
----
purchase the Series A Debentures in offshore transactions in reliance upon
Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons
----------------------
specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE
--------
PURCHASERS"). The Initial Purchasers will offer the Series A Debentures to
- ----------
Eligible Purchasers initially at a price equal to 52.175% of the principal
amount thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Debentures
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in
-----------------------------
substantially the form of Exhibit A hereto, for so long as such Series A
Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the
------------------------------
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Issuers will agree to file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein, (i) a registration
----------
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
-------------------------------------
to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009
(the "SERIES B DEBENTURES"), to be offered in exchange for the Series A
-------------------
Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER")
--------------
and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the
"SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer
----------------------------
Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by
-----------------------
certain holders of the Series A Debentures and to use its best efforts to cause
such Registration Statements to be declared and remain effective and usable for
the periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. This Agreement, the Indenture, the Debentures and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "OPERATIVE DOCUMENTS."
-------------------
4. DELIVERY AND PAYMENT.
--------------------
(a) Delivery of, and payment of the Purchase Price for, the Series A
Debentures shall be made at the offices of Latham & Watkins, New York, New York
or such other location as may be mutually acceptable. Such delivery and payment
shall be made at 9:00 a.m. New York City time, on July 22, 1998 or at such other
time on the same date or such other date as shall be agreed upon by the Initial
Purchasers and the Issuers in writing. The time and date of such delivery and
the payment for the Series A Debentures are herein called the "CLOSING DATE."
------------
(b) One or more of the Series A Debentures in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate
---
principal amount of the Series A Debentures
3
<PAGE>
(collectively, the "GLOBAL DEBENTURE"), shall be delivered by the Issuers to the
----------------
Initial Purchasers (or as the Initial Purchasers direct) in each case with any
transfer taxes thereon duly paid by the Issuers against payment by the Initial
Purchasers of the Purchase Price thereof by wire transfer in same day funds to
the order of the Issuers. The Global Debenture shall be made available to the
Initial Purchasers for inspection not later than 9:30 a.m., New York City time,
on the business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE ISSUERS. Each of the Issuers hereby agrees
--------------------------
with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested
by the Initial Purchasers, confirm such advice in writing, (i) of the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Series A Debentures for
offering or sale in any jurisdiction designated by the Initial Purchasers
pursuant to Section 5(e) hereof, or the initiation of any proceeding by any
state securities commission or any other federal or state regulatory authority
for such purpose and (ii) of the happening of any event during the period
referred to in Section 5(c) below that makes any statement of a material fact
made in the Preliminary Offering Memorandum or the Offering Memorandum untrue or
that requires any additions to or changes in the Preliminary Offering Memorandum
or the Offering Memorandum in order to make the statements therein not
misleading. The Issuers shall use their best efforts to prevent the issuance of
any stop order or order suspending the qualification or exemption of any Series
A Debentures under any state securities or Blue Sky laws and, if at any time any
state securities commission or other federal or state regulatory authority shall
issue an order suspending the qualification or exemption of any Series A
Debentures under any state securities or Blue Sky laws, the Issuers shall use
their best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Issuers as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchasers'
compliance with its representations and warranties and agreements set forth in
Section 7 hereof, the Issuers consent to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchasers and the Issuers an Offering Memorandum is required by law to
be delivered in connection with Exempt Resales by the Initial Purchasers, (i)
not to make any amendment or supplement to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which the
Initial Purchasers shall reasonably object after being so advised and (ii) to
prepare promptly upon the Initial Purchasers' reasonable request, any amendment
or supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales.
(d) If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchasers and the Issuers, it becomes necessary to
amend or supplement the Offering Memorandum in order to make the statements
therein, in the light of the circumstances when such Offering Memorandum is
delivered to an Eligible Purchaser, not misleading, or if, in the opinion of
counsel to the Initial Purchasers and the Issuers, it is necessary to amend or
supplement the Offering Memorandum to comply with any applicable
4
<PAGE>
law, forthwith to prepare an appropriate amendment or supplement to such
Offering Memorandum so that the statements therein, as so amended or
supplemented, will not, in the light of the circumstances when it is so
delivered, be misleading, or so that such Offering Memorandum will comply with
applicable law, and to furnish to the Initial Purchasers and such other persons
as the Initial Purchasers may designate such number of copies thereof as the
Initial Purchasers may reasonably request.
(e) Prior to the sale of all Series A Debentures pursuant to
Exempt Resales as contemplated hereby, to cooperate with the Initial Purchasers
and counsel to the Initial Purchasers in connection with the registration or
qualification of the Series A Debentures for offer and sale to the Initial
Purchasers and pursuant to Exempt Resales under the securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that the Issuers shall not be required in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to
service of process or taxation other than as to matters and transactions
relating to the Preliminary Offering Memorandum, the Offering Memorandum or
Exempt Resales, in any jurisdiction in which it is not now so subject.
(f) So long as any of the Series A Debentures remain outstanding
and during any period in which the Issuers are not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
------------
to make available to any holder of Series A Debentures in connection with any
sale thereof and any prospective purchaser of such Series A Debentures from such
holder, the information ("RULE 144A INFORMATION") required by Rule 144A(d)(4)
---------------------
under the Act.
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of the Issuers
under this Agreement, including: (i) the fees, disbursements and expenses of
counsel to the Issuers and accountants of the Issuers in connection with the
sale and delivery of the Series A Debentures to the Initial Purchasers and
pursuant to Exempt Resales, and all other fees and expenses in connection with
the preparation, printing, filing and distribution of the Preliminary Offering
Memorandum, the Offering Memorandum and all amendments and supplements to any of
the foregoing (including financial statements), including the mailing and
delivering of copies thereof to the Initial Purchasers and persons designated by
it in the quantities specified herein, (ii) all costs and expenses related to
the transfer and delivery of the Series A Debentures to the Initial Purchasers
and pursuant to Exempt Resales, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement, the other
Operative Documents and any other agreements or documents in connection with the
offering, purchase, sale or delivery of the Series A Debentures, (iv) all
expenses in connection with the registration or qualification of the Series A
Debentures for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the filing
fees and fees and disbursements of counsel for the Initial Purchasers in
connection with such registration or qualification and memoranda relating
thereto), (v) the cost of printing certificates representing the Series A
Debentures, (vi) all expenses and listing fees in connection with the
application for quotation of the Series A Debentures in the National Association
of Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
----
("PORTAL"), (vii) the fees and expenses of the Trustee and the Trustee's counsel
------
in connection with the Indenture and the Debentures, (viii) the costs and
charges of any transfer agent, registrar and/or depository (including DTC), (ix)
any fees charged by rating agencies for the rating of the Debentures, (x) all
costs and expenses of the Exchange Offer and any Registration Statement, as set
forth in the
5
<PAGE>
Registration Rights Agreement, and (xi) and all other costs and expenses
incident to the performance of the obligations of the Issuers hereunder for
which provision is not otherwise made in this Section.
(h) To use its best efforts to effect the inclusion of the
Series A Debentures in PORTAL and to maintain the listing of the Series A
Debentures on PORTAL for so long as the Series A Debentures are outstanding.
(i) To obtain the approval of DTC for "book-entry" transfer of
the Debentures, and to comply with all of its agreements set forth in the
representation letters of the Issuers to DTC relating to the approval of the
Debentures by DTC for "book-entry" transfer.
(j) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of either Issuer or
any warrants, rights or options to purchase or otherwise acquire debt securities
of either Issuer substantially similar to the Debentures (other than (i) the
Debentures, (ii) any guarantee of either Issuer of any indebtedness of Anthony
Crane Rental Holdings, L.P. or Anthony Crane Rental Holdings Capital
Corporation, and (iii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Initial Purchasers.
(k) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Series A Debentures to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Series A Debentures under the Act.
(l) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Debentures.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(n) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Series A Debentures.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ISSUERS. As of
----------------------------------------------------------
the date hereof, each of the Issuers represents and warrants to, and agrees
with, the Initial Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any 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, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchasers furnished to the Issuers in
writing by the Initial Purchasers expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
6
<PAGE>
(b) Each of the Company and its subsidiaries organized as a
limited partnership has been duly formed, is validly subsisting as a limited
partnership in good standing under the laws of its jurisdiction of formation and
has the partnership power and authority to carry on its business as described in
the Preliminary Offering Memorandum and the Offering Memorandum and to own,
lease and operate its properties and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (a "MATERIAL ADVERSE EFFECT"). Each of the Company's subsidiaries
-----------------------
organized as a corporation has been duly formed, is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to carry on its business as described
in the Preliminary Offering Memorandum and the Offering Memorandum and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a Material Adverse Effect.
(c) The holders of partnership units of the Issuer organized as
a limited partnership have been properly admitted as partners of such Issuer
pursuant to the terms and conditions of the Amended and Restated Partnership
Agreement of the Company, and there are no statutory or contractual preemptive
or similar rights with respect to the issuance of such partnership units. All
outstanding shares of capital stock of the Issuer organized as a corporation
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights.
(d) The entities listed on Schedule B hereto are the only
subsidiaries, direct or indirect, of the Company. The holders of the
partnership units of the Company's subsidiaries organized as limited
partnerships have been properly admitted as partners of such subsidiary pursuant
to the terms and conditions of the partnership agreement of such subsidiary, and
there are no statutory or contractual preemptive or similar rights with respect
to the issuance of such partnership interests, and such interest consisting of
limited partnership units are owned by the Company, directly or indirectly
through one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature (each, a "LIEN").
----
All of the outstanding shares of capital stock of each of the Company's
subsidiaries organized as a corporation have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the Company,
directly or indirectly through one or more subsidiaries, free and clear of any
Lien.
(e) This Agreement has been duly authorized, executed and
delivered by the Issuers.
(f) The Indenture has been duly authorized by the Issuers and,
on the Closing Date, will have been validly executed and delivered by the
Issuers. When the Indenture has been duly executed and delivered by the Issuers,
the Indenture will be a valid and binding agreement of the Issuers, enforceable
against the Issuers in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "TIA" or "TRUST INDENTURE ACT"), and the rules and regulations of
--- -------------------
the Commission applicable to an indenture which is qualified thereunder.
7
<PAGE>
(g) The Series A Debentures have been duly authorized and, on
the Closing Date, will have been validly executed and delivered by the Issuers.
When the Series A Debentures have been issued, executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by
the Initial Purchasers in accordance with the terms of this Agreement, the
Series A Debentures will be entitled to the benefits of the Indenture and will
be valid and binding obligations of the Issuers, enforceable in accordance with
their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability. On the Closing Date,
the Series A Debentures will conform as to legal matters to the description
thereof contained in the Offering Memorandum.
(h) On the Closing Date, the Series B Debentures will have been
duly authorized by the Issuers. When the Series B Debentures are issued,
executed and authenticated in accordance with the terms of the Exchange Offer
and the Indenture, the Series B Debentures will be entitled to the benefits of
the Indenture and will be the valid and binding obligations of the Issuers,
enforceable against the Issuers in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Registration Rights Agreement has been duly authorized
by the Issuers and, on the Closing Date, will have been duly executed and
delivered by the Issuers. When the Registration Rights Agreement has been duly
executed and delivered, the Registration Rights Agreement will be a valid and
binding agreement of the Issuers, enforceable against the in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(j) Neither the Company nor any of its subsidiaries is in (i)
violation of its respective charter or by-laws or (ii) default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, except for defaults that
would not have a Material Adverse Effect.
(k) The execution, delivery and performance of this Agreement
and the other Operative Documents by the Issuers, compliance by the Issuers with
all provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its subsidiaries, (ii) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states), (iii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iv) violate or conflict
with any applicable law or any rule, regulation,
8
<PAGE>
judgment, order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their respective
property, (v) result in the imposition or creation of (or the obligation to
create or impose) a Lien under, any agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, or (vi) result in the
termination, suspension or revocation of any Authorization (as defined below) of
the Company or any of its subsidiaries or result in any other impairment of the
rights of the holder of any such Authorization, except in the case of clauses
(ii) through (vi) such as would not have a Material Adverse Effect.
(l) There are no legal or governmental proceedings pending or,
to the Company's knowledge, threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective property
is or could be subject, which might result, singly or in the aggregate, in a
Material Adverse Effect.
(m) Neither the Company nor any of its subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
------------------
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
-----
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(o) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
-------------
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(p) The accountants, PricewaterhouseCoopers, L.L.P., that have
certified the financial statements and supporting schedules included in the
Preliminary Offering Memorandum and the
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Offering Memorandum are independent public accountants with respect to the
Issuers, as required by the Act and the Exchange Act. The historical financial
statements, together with related schedules and notes, set forth in the
Preliminary Offering Memorandum and the Offering Memorandum comply as to form in
all material respects with the requirements applicable to registration
statements on Form S-1 under the Act.
(q) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Offering Memorandum at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Offering Memorandum (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(r) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum have been prepared
on a basis consistent with the historical financial statements of the Company
and its subsidiaries and give effect to assumptions used in the preparation
thereof on a reasonable basis and in good faith and present fairly the
historical and proposed transactions contemplated by the Preliminary Offering
Memorandum and the Offering Memorandum; and such pro forma financial statements
comply as to form in all material respects with the requirements applicable to
pro forma financial statements included in registration statements on Form S-1
under the Act. The other pro forma financial and statistical information and
data included in the Offering Memorandum are, in all material respects,
accurately presented and prepared on a basis consistent with the pro forma
financial statements.
(s) Neither Issuer is nor, after giving effect to the offering
and sale of the Series A Debentures and the application of the net proceeds
thereof as described in the Offering Memorandum, will be, an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
(t) Except as set forth in the Offering Memorandum, there are no
contracts, agreements or understandings between the either Issuer and any person
granting such person the right to require such Issuer to file a registration
statement under the Act with respect to any securities of such Issuer or to
require such Issuer to include such securities with the Debentures registered
pursuant to any Registration Statement.
(u) Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Series A Debentures to violate Regulation G (12 C.F.R. Part 207), Regulation T
(12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12
C.F.R. Part 224) of the Board of Governors of the Federal Reserve System.
(v) No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Issuers that it is considering imposing) any
condition (financial or otherwise) on the Issuers' retaining any rating assigned
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<PAGE>
to the Issuers, any securities of the Issuers or (ii) has indicated to the
Issuers that it is considering (a) the downgrading, suspension, or withdrawal
of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating so assigned or (b) any change in the outlook
for any rating of the Issuers or any securities of the Issuers.
(w) Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there has
not been any material adverse change or any development involving a prospective
material adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries, except as disclosed or otherwise
contemplated in the Offering Memorandum, and (iii) neither the Company nor any
of its subsidiaries has incurred any material liability or obligation, direct or
contingent.
(x) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act.
(y) When the Series A Debentures are issued and delivered
pursuant to this Agreement, the Series A Debentures will not be of the same
class (within the meaning of Rule 144A under the Act) as any security of the
Issuers that is listed on a national securities exchange registered under
Section 6 of the Exchange Act or that is quoted in a United States automated
inter-dealer quotation system.
(z) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Issuers or any of their
respective representatives (other than the Initial Purchasers, as to whom the
Issuers make no representation) in connection with the offer and sale of the
Series A Debentures contemplated hereby, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Series A Debentures have
been issued and sold by the Issuers within the six-month period immediately
prior to the date hereof.
(aa) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.
(bb) Neither the Issuers nor any of their respective affiliates
or any person acting on its or their behalf (other than the Initial Purchasers,
as to whom the Issuers make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S under the Act
"REGULATION S") with respect to the Series A Debentures.
------------
(cc) The Series A Debentures offered and sold in reliance on
Regulation S have been and will be offered and sold only in offshore
transactions.
(dd) The sale of the Series A Debentures pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of the Act.
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<PAGE>
(ee) The Issuers and their respective affiliates and all persons
acting on their behalf (other than the Initial Purchasers, as to whom the
Issuers make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the
offering of the Series A Debentures outside the United States and, in connection
therewith, the Offering Memorandum will contain the disclosure required by Rule
902(g)(2).
(ff) The Series A Debentures sold in reliance on Regulation S
will be represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the 40-day
distribution compliance period referred to in Rule 903(c)(3) of the Act and only
upon certification of beneficial ownership of such Series A Debentures by non-
U.S. persons or U.S. persons who purchased such Series A Debentures in
transactions that were exempt from the registration requirements of the Act.
(gg) No registration under the Act of the Series A Debentures is
required for the sale of the Series A Debentures to the Initial Purchasers as
contemplated hereby or for the Exempt Resales assuming the accuracy of the
Initial Purchasers' representations and warranties and agreements set forth in
Section 7 hereof.
(hh) Each certificate signed by any officer of the Issuers and
delivered to the Initial Purchasers or counsel for the Initial Purchasers shall
be deemed to be a representation and warranty by the Issuers to the Initial
Purchasers as to the matters covered thereby.
(ii) On the Closing Date, the Company and its subsidiaries will
have good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case, except as set forth
on the applicable schedules to the Senior Credit Facilities, free and clear of
all Liens and defects, except such as are described in the Offering Memorandum
or such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries, in each case except as described
in the Offering Memorandum.
(jj) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the Company or
any of its subsidiaries before the National Labor Relations Board or any state
or local labor relations board, (ii) strike, labor dispute, slowdown or stoppage
pending or threatened against the Company or any of its subsidiaries or (iii)
union representation question existing with respect to the employees of the
Company or any of its subsidiaries, except in the case of clauses (i), (ii) and
(iii) for such actions which, singly or in the aggregate, would not have a
Material Adverse Effect. To the best knowledge of the Issuers, no collective
bargaining organizing activities are taking place with respect to the Company or
any of its subsidiaries, except as disclosed in the Offering Memorandum.
(kk) The Company and each of its subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting
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<PAGE>
principles and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ll) The indebtedness represented by the Series A Debentures is
being incurred for proper purposes and in good faith and each of the Issuers
will be on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Series A Debentures) solvent, and will have on
the Closing Date (after giving effect to the application of the proceeds from
the issuance of the Series A Debentures) sufficient capital for carrying on
their respective business and will be on the Closing Date (after giving effect
to the application of the proceeds from the issuance of the Series A Debentures)
able to pay their respective debts as they mature.
The Issuers acknowledge that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 9 hereof, counsel to the Issuers and counsel to the Initial Purchasers
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of the
--------------------------------------------------
Initial Purchasers, severally and not jointly, represents and warrants to the
Issuers, and agrees that:
(a) Such Initial Purchaser is either a QIB or an "accreted
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Act (an
"ACCREDITED INSTITUTION"), in either case, with such knowledge and experience
----------------------
in financial and business matters as is necessary in order to evaluate the
merits and risks of an investment in the Series A Debentures.
(b) Such Initial Purchaser (A) is not acquiring the Series A
Debentures with a view to any distribution thereof or with any present intention
of offering or selling any of the Series A Debentures in a transaction that
would violate the Act or the securities laws of any state of the United States
or any other applicable jurisdiction and (B) will be reoffering and reselling
the Series A Debentures only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and (y) in offshore
transactions in reliance upon Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A Debentures
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with
Exempt Resales, such Initial Purchaser will solicit offers to buy the Series A
Debentures only from, and will offer to sell the Series A Debentures only to,
Eligible Purchasers. Each Initial Purchaser further agrees that it will offer to
sell the Series A Debentures only to, and will solicit offers to buy the Series
A Debentures only from (A) Eligible Purchasers that the Initial Purchaser
reasonably believes are QIBs, and (B) Regulation S Purchasers, in each case,
that agree that (x) the Series A Debentures purchased by them may be resold,
pledged or otherwise transferred within the time period referred to under Rule
144(k) (taking into account the provisions of Rule 144(d) under the Act, if
applicable) under the Act, as in effect on the date of the
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<PAGE>
transfer of such Series A Debentures, only (I) to the Issuers or any of their
subsidiaries, (II) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Act, (III) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements of
Rule 904 of the Act, (IV) in a transaction meeting the requirements of Rule 144
under the Act, (V) to an Accredited Institution that, prior to such transfer,
furnishes the Trustee a signed letter containing certain representations and
agreements relating to the registration of transfer of such Series A Debenture
(the form of which is substantially the same as Annex A to the Offering
-------
Memorandum) and, if such transfer is in respect of an aggregate principal amount
of Series A Debentures less than $250,000, an opinion of counsel acceptable to
the Issuers that such transfer is in compliance with the Act, (VI) in accordance
with another exemption from the registration requirements of the Act (and based
upon an opinion of counsel acceptable to the Issuers) or (VII) pursuant to an
effective registration statement and, in each case, in accordance with the
applicable securities laws of any state of the United States or any other
applicable jurisdiction and (y) they will deliver to each person to whom such
Series A Debentures or an interest therein is transferred a notice substantially
to the effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any person
acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Series A Debentures.
(f) The Series A Debentures offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S have been and will be
offered and sold only in offshore transactions.
(g) The sale of the Series A Debentures offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Series A Debentures in the United States or
to, or for the benefit or account of, a U.S. Person (other than a distributor),
in each case, as defined in Rule 902 under the Act (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering of the Series A Debentures pursuant hereto and the
Closing Date, other than in accordance with Regulation S of the Act or another
exemption from the registration requirements of the Act. Such Initial Purchaser
agrees that, during such 40-day distribution compliance period, it will not
cause any advertisement with respect to the Series A Debentures (including any
"tombstone" advertisement) to be published in any newspaper or periodical or
posted in any public place and will not issue any circular relating to the
Series A Debentures, except such advertisements as permitted by and include the
statements required by Regulation S.
(i) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Debentures by it to any distributor, dealer
or person receiving a selling concession, fee or other remuneration during the
40-day distribution compliance period referred to in Rule 903(c)(3) under the
Act, it will send to such distributor, dealer or person receiving a selling
concession, fee or other remuneration a confirmation or notice to substantially
the following effect:
"The Series A Debentures covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended
(the
14
<PAGE>
"Securities Act"), and may not be offered and sold within the
United States or to, or for the account or benefit of, U.S.
persons (i) as part of your distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the Offering and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act (or Rule
144A or to Accredited Institutions in transactions that are
exempt from the registration requirements of the Securities
Act), and in connection with any subsequent sale by you of the
Series A Debentures covered hereby in reliance on Regulation S
during the period referred to above to any distributor, dealer
or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the
foregoing effect. Terms used above have the meanings assigned to
them in Regulation S."
(j) Such Initial Purchaser agrees that the Series A Debentures
offered and sold in reliance on Regulation S will be represented upon issuance
by a global security that may not be exchanged for definitive securities until
the expiration of the 40-day distribution compliance period referred to in Rule
903(c)(3) of the Act and only upon certification of beneficial ownership of such
Series A Debentures by non-U.S. persons or U.S. persons who purchased such
Series A Debentures in transactions that were exempt from the registration
requirements of the Act.
Such Initial Purchaser acknowledges that the Issuers and, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant to
Section 9 hereof, counsel to the Issuers and counsel to the Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and such
Initial Purchaser hereby consents to such reliance.
8. INDEMNIFICATION.
---------------
(a) Each Issuer agrees, jointly and severally, to indemnify and
hold harmless the each Initial Purchaser, its directors, its officers and each
person, if any, who controls such Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Offering Memorandum (or any amendment or supplement thereto), the
Preliminary Offering Memorandum or any Rule 144A Information provided by the
Issuers to any holder or prospective purchaser of Series A Debentures pursuant
to Section 5(f) or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to an
Initial Purchaser furnished in writing to the Issuers by such Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Issuers, and their respective directors and
officers and each person, if any, who controls (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) the Issuers, to the same extent as
the foregoing indemnity from the Issuers to an Initial Purchaser but only with
reference to information relating to such Initial Purchaser furnished in writing
to the Issuers by such Initial Purchaser
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<PAGE>
expressly for use in the Preliminary Offering Memorandum or the Offering
Memorandum.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
-----------------
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
------------------
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Issuers, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (i) effected with its written consent
or (ii) effected without its written consent if the settlement is entered into
more than twenty business days after the indemnifying party shall have received
a request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative
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<PAGE>
benefits received by the Issuers, on the one hand, and the Initial Purchaser on
the other hand from the offering of the Series A Debentures or (ii) if the
allocation provided by clause 8(d)(i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 8(d)(i) above but also the relative fault of the Issuers,
on the one hand, and such Initial Purchaser, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers, on the one hand
and the Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Series A
Debentures (after underwriting discounts and commissions, but before deducting
expenses) received by the Issuers, and the total discounts and commissions
received by the Initial Purchaser bear to the total price to investors of the
Series A Debentures, in each case as set forth in the table on the cover page of
the Offering Memorandum. The relative fault of the Issuers, on the one hand, and
the Initial Purchaser, 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 Issuers, on the one hand, or the Initial Purchaser,
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuers, and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, the Initial Purchaser shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchaser 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 Initial Purchasers' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective principal amount
of Series A Debentures purchased by each of the Initial Purchasers hereunder and
not joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations
---------------------------------------------
of the Initial Purchasers to purchase the Series A Debentures under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Issuers
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and
17
<PAGE>
as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Issuers or any securities of the Issuers (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have
occurred any change, nor shall any notice have been given of any potential or
intended change, in the outlook for any rating of the Issuers or any securities
of the Issuers by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Debentures than that on which the Debentures
were marketed.
(c) Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there shall not have
been any change or any development involving a prospective change in the capital
stock or in the long-term debt of the Company or any of its subsidiaries, except
as disclosed or otherwise contemplated in the Offering Memorandum and (iii)
neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any such
case described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Series A Debentures on the terms and in the manner contemplated in the Offering
Memorandum.
(d) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by the General Manager and the Chief Financial
Officer of the Issuers, confirming the matters set forth in Sections 6(w), 9(a)
and 9(b) and stating that each of the Issuers has complied with all the
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied on or prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Kirkland & Ellis, New York, New York, and Williams Coulson, Pittsburgh,
Pennsylvania, counsel for the Issuers, substantially in the form of Exhibits B-1
and B-2 hereto, respectively.
The opinions of Kirkland & Ellis and Williams Coulson described in
Section 9(e) above shall be rendered to you at the request of the Issuers and
shall so state therein.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of Latham & Watkins, New York, New
York, counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof or
the Closing Date, as the case may be, in form and
18
<PAGE>
substance satisfactory to the Initial Purchasers from PricewaterhouseCoopers,
L.L.P., independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort letters" to
the Initial Purchasers with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(h) The Series A Debentures shall have been approved by the NASD
for trading and duly listed in PORTAL.
(i) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Issuers and the Trustee.
(j) The Issuers shall have executed the Registration Rights
Agreement and the Initial Purchasers shall have received an original copy
thereof, duly executed by the Issuers.
(k) The Initial Purchasers shall have received on the Closing
Date a solvency opinion, dated the Closing Date, from a mutually agreeable firm,
in form and substance reasonably satisfactory to the Initial Purchasers.
(l) The Initial Purchasers shall have received evidence
satisfactory to the Initial Purchasers that the other Transactions (as defined
in the Offering Memorandum) have been completed.
(m) The Initial Purchasers shall have received fully executed
copies of the Senior Credit Facilities (as defined in the Offering Memorandum).
(n) Neither of the Issuers shall have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Issuers, as the case may
be, at or prior to the Closing Date.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
------------------------------------------
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Issuers if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers' judgment, makes it impracticable to market the Series A Debentures
on the terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Issuers on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a
19
<PAGE>
material adverse effect on the financial markets in the United States.
If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Series A Debentures which it or they have
agreed to purchase hereunder on such date and the aggregate principal amount of
the Series A Debentures which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase is not
more than one tenth of the aggregate principal amount of the Series A Debentures
to be purchased on such date by all Initial Purchasers, each non defaulting
Initial Purchaser shall be obligated severally, in the proportion which the
principal amount of the Series A Debentures set forth opposite its name in
Schedule A bears to the aggregate principal amount of the Series A Debentures
which all the non defaulting Initial Purchasers, as the case may be, have agreed
to purchase, or in such other proportion as you may specify, to purchase the
Series A Debentures which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase on such
date; provided that in no event shall the aggregate principal amount of the
Series A Debentures which any Initial Purchaser has agreed to purchase pursuant
to Section 2 hereof be increased pursuant to this Section 10 by an amount in
excess of one ninth of such principal amount of the Series A Debentures without
the written consent of such Initial Purchaser. If on the Closing Date any
Initial Purchaser or Initial Purchasers shall fail or refuse to purchase the
Series A Debentures and the aggregate principal amount of the Series A
Debentures with respect to which such default occurs is more than one tenth of
the aggregate principal amount of the Series A Debentures to be purchased by all
Initial Purchasers and arrangements satisfactory to the Initial Purchasers and
the Issuers for purchase of such the Series A Debentures are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non defaulting Initial Purchaser and the Issuers. In any such case
which does not result in termination of this Agreement, either you or the
Issuers shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Offering Memorandum or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of any such Initial Purchaser
under this Agreement.
11. MISCELLANEOUS. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (i) if to the Issuers, 1165 Camp
Hollow Road, West Mifflin, Pennsylvania 15122; 412-469-3700 and (ii) if to the
Initial Purchasers, Donaldson, Lufkin & Jenrette Securities Corporation, 277
Park Avenue, New York, New York 10172, Attention: Syndicate Department, or in
any case to such other address as the person to be notified may have requested
in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Issuers and the Initial Purchasers set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Series A
Debentures, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Initial Purchasers, the officers or
directors of the Initial Purchasers, any person controlling the Initial
Purchasers, the Issuers, the officers or directors of the Issuers, or any person
controlling the Issuers, (ii) acceptance of the Series A Debentures and payment
for them hereunder and (iii) termination of this Agreement.
If for any reason the Series A Debentures are not delivered by or on
behalf of the Issuers as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Issuers, jointly and
severally, agree to reimburse the Initial Purchasers for all out-of-pocket
expenses (including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of
20
<PAGE>
this Agreement, the Issuers shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. The Issuers also agree, jointly and
severally, to reimburse the Initial Purchasers and their officers, directors and
each person, if any, who controls such Initial Purchasers within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act for any and all fees and
expenses (including without limitation the fees and expenses of counsel)
incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the Initial
Purchasers, the Initial Purchasers' directors and officers, any controlling
persons referred to herein, the directors of the Issuers and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Series A Debentures from the Initial Purchasers merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
* * *
21
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among the
Issuers and the Initial Purchasers.
Very truly yours,
ISSUERS:
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: Anthony Crane Rental, Inc.
By: /s/ David Mahokey
----------------------------------
Name: David Mahokey
Title: Chief Financial Officer
ANTHONY CRANE HOLDINGS CAPITAL
CORPORATION
By:/s/ David Mahokey
------------------------------------
Name: David Mahokey
Title: Chief Financial Officer
22
<PAGE>
Accepted and Agreed to on behalf of the
Initial Purchases by:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Edward Biggins
--------------------------------
Name: Edward Biggins
Title: Vice President
23
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal Amount
Initial Purchasers of Debentures
------------------ ----------------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation.......... $33,600,000
Goldman, Sachs & Co................. $14,400,000
Total............................... $48,000,000
</TABLE>
S-2
<PAGE>
SCHEDULE B
SUBSIDIARIES
ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
ANTHONY CRANE RENTAL, L.P.
ANTHONY CRANE CAPITAL CORPORATION
ANTHONY CRANE INTERNATIONAL, L.P.
ANTHONY CRANE SALES AND LEASING L.P.
S-2
<PAGE>
EXHIBIT A
Form of Registration Rights Agreement
<PAGE>
EXHIBIT 10.2
<PAGE>
REGISTRATION RIGHTS AGREEMENT
Dated as of July 22, 1998
by and among
Anthony Crane Rental Holdings, L.P.,
Anthony Crane Holdings Capital Corporation
and
Donaldson, Lufkin & Jenrette Securities Corporation
And
Goldman, Sachs & Co.
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and entered
into as of July 22, 1998, by and among Anthony Crane Rental Holdings, L.P., a
Pennsylvania limited partnership ("ACRH"), Anthony Crane Holdings Capital
Corporation, a Delaware Corporation (together with ACRH, the "Company") and
Donaldson, Lufkin & Jenrette Securities Corporation and Goldman, Sachs & Co.
(each an "Initial Purchaser" and, collectively, the "Initial Purchasers"), each
of whom has agreed to purchase the Company's 13 3/8% Senior Discount Debentures
due 2009 (the "Debentures") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated July 16,
1998, (the "Purchase Agreement"), by and among the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to purchase the
Debentures, 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 9 of the
Purchase Agreement.
Capitalized terms used herein and not otherwise defined are used as defined
the Indenture (as defined herein).
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.
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 (i) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the Exchange
Debentures to be issued in the Exchange Offer, (ii) 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 minimum period required
pursuant to Section 3(b) hereof and (iii) the delivery by the Company to the
Registrar under the Indenture of Exchange Debentures in the same aggregate
principal amount as the aggregate principal amount of Debentures 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.
Page 1
<PAGE>
Exchange Debentures: The Company's 10-3/8% Senior Discount Debentures due
2009 be issued pursuant to the Indenture : (x) in the Exchange Offer or (y) as
contemplated by Section 4 hereof.
Exchange Offer: The exchange and issuance by the Company of a principal
amount at maturity of Exchange Debentures (which shall be registered pursuant to
the Exchange Offer Registration Statement) equal to the outstanding principal
amount at maturity of the Debentures that are tendered by such Holders in
connection with such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement relating
to an Exchange Offer, including the related Prospectus.
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.
Indenture: The indenture, dated the Closing Date, between the Company and
State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to
which the Debentures are to be issued, as such indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Participating Broker-Dealer: Any Broker-Dealer that holds Exchange
Debentures that were acquired in the Exchange Offer in exchange for Debentures
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Debentures acquired
directly from the Company or any of its affiliates).
Person: An individual, partnership, limited liability company,
corporation, trust, unincorporated organization, or a government or agency or
political subdivision thereof.
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 any Exchange Debentures 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.
Page 2
<PAGE>
Regulation S: Regulation S promulgated under the Act.
Rule 144: Rule 144 promulgated under the Act.
Securities: The Debentures and the Exchange Debentures.
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 (A) Debenture, until the earliest to
occur of (i) the date on which such Debenture is exchanged in the Exchange Offer
for an Exchange Debenture which is entitled to be resold to the public by the
Holder thereof without complying with the prospectus delivery requirements of
the Securities Act, (ii) the date on which such Debenture has been disposed of
in accordance with a Shelf Registration Statement (and purchasers thereof have
been issued Exchange Debentures) or (iii) the date on which such Debenture is
distributed to the public pursuant to Rule 144 under the Securities Act and each
(B) Exchange Debenture held by a Broker-Dealer until the date on which such
Exchange Debenture is disposed of by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration Statement
(including the delivery of the prospectus contained therein).
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 or policy of the Commission (after the procedures set forth in Section
6(a)(i) below have been complied with), the Company 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 90 days after the Closing Date (such 90th 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 165 days after the Closing Date (such 165th 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 Exchange Debentures 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, use its best efforts to commence and
Consummate the Exchange
Page 3
<PAGE>
Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the Exchange Debentures to be offered in exchange for the
Debentures that are Transfer Restricted Securities and to permit resales of
Exchange Debentures by Broker-Dealers that tendered into the Exchange Offer for
Debentures that such Broker-Dealer acquired for its own account as a result of
market making activities or other trading activities (other than Debentures
acquired directly from the Company or any of its Affiliates) as contemplated by
Section 3(c) below.
(b) The Company shall use its 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 shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Exchange
Debentures shall be included in the Exchange Offer Registration Statement. The
Company shall use its 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 Exchange
Debentures 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.
To the extent necessary to ensure that the Exchange Offer Registration
Statement is available for sales of Exchange Debentures by Broker-Dealers, the
Company agrees to use its 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 180 days 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 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.
Page 4
<PAGE>
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
------------------
applicable law or Commission (after the Company has complied with the procedures
set forth in Section 6(a)(i) below) or (ii) any Holder of Transfer Restricted
Securities shall notify the Company in writing prior to the 20th Business Day
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 Exchange Debentures 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 Debentures acquired directly from the Company or any of its
Affiliates, then the Company shall:
(x) cause to be filed, on or prior to 30 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 its best efforts to cause such Shelf Registration Statement
to become effective on or prior to 90 days after the Filing Deadline (such 90th
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 or policy of the
Commission, 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 shall use its 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
Page 5
<PAGE>
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 30 Business Days of the Effectiveness Deadline with
respect to the Exchange Offer Registration Statement 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 hereby agrees to pay to each Holder
of Transfer Restricted Securities affected thereby liquidated damages in an
amount equal to $.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 $.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 $.50 per week per $1,000 in principal
amount of Transfer Restricted Securities; provided that the Company 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
Securities. All obligations of the Company 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.
Page 6
<PAGE>
Section 5.1. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
-------------------------------------
Exchange Offer, the Company shall comply with all applicable provisions of
Section 6(c) below, shall use its best efforts to effect such exchange and to
permit the resale of Exchange Debentures by Broker-Dealers that tendered in the
Exchange Offer Debentures that such Broker-Dealer acquired for its own account
as a result of its market making activities or other trading activities (other
than Debentures 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 hereby agrees 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 hereby agrees to pursue the issuance of such a decision to the
Commission staff level. In connection with the foregoing, the Company
hereby agrees 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 (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
Exchange Debentures to be issued in the Exchange Offer and (C) it is
acquiring the Exchange Debentures in its ordinary course of business. As a
condition to its participation in the Exchange Offer, each Holder using the
Exchange Offer to participate in a distribution of the Exchange Debentures
shall acknowledge and agree that, if the resales are of Exchange Debentures
obtained by such Holder in exchange for Debentures 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
Page 7
<PAGE>
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 shall provide a supplemental letter to the
Commission (A) stating that the Company is 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 the Company has entered into any arrangement or
understanding with any Person to distribute the Exchange Debentures to be
received in the Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Exchange Offer is
acquiring the Exchange Debentures in its ordinary course of business and
has no arrangement or understanding with any Person to participate in the
distribution of the Exchange Debentures 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 shall comply with all the provisions of
Section 6(c) below and shall use its 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 will (i) 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, and (ii) issue, upon the request of any Holder or
purchaser of Debentures covered by any Shelf Registration Statement contemplated
by this Agreement, Exchange Debentures having an aggregate principal amount
equal to the aggregate principal amount of Debentures sold pursuant to the Shelf
Registration Statement and surrendered to the Company for cancellation; the
Company shall register Exchange Debentures on the Shelf Registration Statement
for this purpose and issue the Exchange Debentures to the purchaser(s) of
securities subject to the Shelf Registration Statement in the names as such
purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration Statement and
------------------
any related Prospectus required by this Agreement, the Company shall:
(i) use its 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 shall file promptly an
Page 8
<PAGE>
appropriate amendment to such Registration Statement curing such defect,
and, if Commission review is required, use its 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 shall use its 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;
Page 9
<PAGE>
(v) furnish to the Initial Purchasers 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 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 cause the Company's 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);
Page 10
<PAGE>
(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
hereby consents 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 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 by (x) the President or any Vice President and (y) a principal
financial or accounting officer of the Company, confirming, as of the
date thereof, the matters set forth in Sections 6(y), 9(a) and 9(b) 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 covering
matters similar to those set forth in Section 9(e) 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, representatives of the independent
public accountants for the Company and has 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 (relying as to materiality
to the extent such counsel deems appropriate upon the statements of
officers and other representatives of the Company), 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
Page 11
<PAGE>
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
erified, the accuracy, completeness or fairness of the financial
statements, Debentures 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 9(g) of the
Purchase Agreement;
(B) set forth in full or incorporated by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) 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 pursuant to this clause
(xi).
If at any time the representations and warranties of the Company set
forth in the certificate contemplated in clause (A)(1) above cease to be
true and correct, the Company shall so advise the Initial Purchasers and
the underwriters, if any, and each selling Holder promptly and, if
requested by such Persons, shall confirm such advice in writing;
(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 the Company
shall not 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 Debentures covered
by any Shelf Registration Statement contemplated by this Agreement,
Exchange Debentures having an aggregate principal amount, surrendered to
the Company by such Holder in exchange therefor or
Page 12
<PAGE>
being sold by such Holder; such Exchange Debentures to be registered in the
name of such Holder or in the name of the purchasers of such Exchange
Debentures, as the case may be; in return, the Debentures 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 its 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 its 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.
Page 13
<PAGE>
(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 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 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's 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 Exchange
Debentures 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; (v) all application and filing fees in connection
with listing the Exchange Debentures 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 (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 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.
(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 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, not to exceed $25,000, who shall be
Latham & Watkins, unless another firm shall be chosen by the Holders of a
majority in principal amount
Page 14
<PAGE>
of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared. Such Holders shall be responsible for any and all
other out-of-pocket expenses of the Holders incurred in connection with the
registration of the Securities.
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each Holder and
(ii) each person, if any, who controls (within the meaning of Section 15 of the
Act or Section 20 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"), from and against any and all losses, claims, damages,
liabilities, judgments, (including without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by 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 Exchange
Debentures, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments 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.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company, and its directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company, 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 (i) 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 the
amount paid by such Indemnified Holder for such Transfer Restricted Securities
and (ii) the amount of any damages that such Indemnified Holder, its directors,
officers or any Person who controls such Indemnified Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) hereof (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), an Indemnified Holder shall not
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<PAGE>
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Indemnified Holder). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenes shall be reimbursed as they are incurred. Such
firm shall be designated in writing by a majority of the Indemnified Holders, in
the case of the parties indemnified pursuant to Section 8(a), and by the
Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 8(d)(i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company, on the one hand, and of the Indemnified Holder, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages,
Page 16
<PAGE>
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Indemnified 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, on the one hand, or by the Indemnified
Holder, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 8(a),
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company and each Holder agree that it would not be just and equitable
if contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any matter, including any action
that could have given rise to such losses, claims, damages, liabilities or
judgments. 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(c) are several in proportion to the respective principal
amount of Transfer Restricted Securities held by each of the Holders hereunder
and not joint.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the 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 9. MISCELLANEOUS
(a) Remedies. The Company acknowledges and agrees that any failure by the
--------
Company to comply with its obligations under Sections 3 and 4 hereof may result
in material irreparable injury to the
Page 17
<PAGE>
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
obligations under Sections 3 and 4 hereof. The Company further agrees to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The Company will not, 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. The Company has not 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 securities under any agreement in effect on the date
hereof.
(c) Adjustments Affecting the Debentures. The Company shall not take any
------------------------------------
action, or permit any change to occur, with respect to the Debentures that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) 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.
(e) Third Party Beneficiary. The Holders shall be third party
-----------------------
beneficiaries to the agreements made hereunder between the Company, 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.
(f) 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:
Page 18
<PAGE>
Anthony Crane Rental Holdings, L.P.
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Telecopier No.: (412) 469-0691
Attention: Dale Buckwalter
With a copy to:
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022
Telecopier No.: (212) 446-4800
Attention: Lance Balk, 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 Donaldson, Lufkin &
Jenrette Securities Corporation, on behalf of the Initial Purchasers (in the
form attached hereto as Exhibit A) and shall be addressed to: Attention:
Corporate Secretary, 277 Park Avenue, New York, New York 10172.
(g) 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.
(h) 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.
Page 19
<PAGE>
(i) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(j) 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.
(k) 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.
(l) 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.
[Registration Rights Agreement Signature Pages Follow]
Page 20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Issuers:
Anthony Crane Rental Holdings, L.P.
By: Anthony Crane Rental, Inc.,
its general partner
By: /s/ David Mahokey
____________________________
Name: David Mahokey
Title: Chief Financial Officer
Anthony Crane Holdings Capital
Corporation
By: /s/ David Mahokey
__________________________
Name: David Mahokey
Title: Chief Financial Officer
Registration Rights Agreement Signature Pages S-1
<PAGE>
Initial Purchasers:
Donaldson, Lufkin & Jenrette
Securities Corporation
Goldman, Sachs & Co.
By: /s/ Edward Biggins
____________________________
(Donaldson, Lufkin & Jenrette
Securities Corporation.)
Registration Rights Agreement Signature Pages S-2
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attn.:
Fax: ( ) -
From: Anthony Crane Rental Holdings, L.P.
Anthony Crane Holdings Capital Corporation
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Re: ____% Senior Discount Debentures due 2009
Date: _______, 199_
For your information only (NO ACTION REQUIRED):
Today, ______, 199_, we filed [an 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.
<PAGE>
EXHIBIT 10.3
================================================================================
REVOLVING CREDIT AGREEMENT
DATED AS OF JULY 22, 1998
AMONG
ANTHONY CRANE RENTAL, L.P.,
AS COMPANY,
ANTHONY CRANE RENTAL HOLDINGS, L.P.,
AS GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS ARRANGER AND SYNDICATION AGENT,
DLJ CAPITAL FUNDING, INC.,
AS DOCUMENTATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
================================================================================
<PAGE>
ANTHONY CRANE RENTAL, L.P.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
CREDIT AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 1.
DEFINITIONS............................................... 2
1.1 Certain Defined Terms..................................................................... 2
---------------------
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
------------------------------------------------------------------
Under Agreement........................................................................... 44
---------------
1.3 Other Definitional Provisions and Rules of Construction................................... 44
-------------------------------------------------------
1.4 Changes in GAAP........................................................................... 45
---------------
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................ 45
2.1 Commitments; Making of Loans; the Register; Notes......................................... 45
-------------------------------------------------
2.2 Interest on the Loans..................................................................... 52
---------------------
2.3 Fees...................................................................................... 55
----
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General Provisions
----------------------------------------------------------------------------------------
Regarding Payments; Application of Proceeds of Collateral and Payments Under Guaranties... 56
---------------------------------------------------------------------------------------
2.5 Use of Proceeds........................................................................... 63
---------------
2.6 Special Provisions Governing Eurodollar Rate Loans........................................ 63
--------------------------------------------------
2.7 Increased Costs; Taxes; Capital Adequacy.................................................. 66
----------------------------------------
2.8 Obligation of Lenders and Issuing Lenders to Mitigate..................................... 70
-----------------------------------------------------
2.9 Defaulting Lenders........................................................................ 71
------------------
2.10 Removal or Replacement of a Lender........................................................ 72
----------------------------------
SECTION 3.
LETTERS OF CREDIT............................................ 74
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein............. 74
-----------------------------------------------------------------------------
3.2 Letter of Credit Fees..................................................................... 77
---------------------
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit........................ 78
------------------------------------------------------------------
3.4 Obligations Absolute...................................................................... 81
--------------------
3.5 Indemnification; Nature of Issuing Lenders' Duties........................................ 82
--------------------------------------------------
3.6 Increased Costs and Taxes Relating to Letters of Credit................................... 83
-------------------------------------------------------
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT................................ 84
4.1 Conditions to Initial Loans............................................................... 84
---------------------------
4.2 Conditions to All Loans................................................................... 93
-----------------------
</TABLE>
(1)
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
4.3 Conditions to Letters of Credit........................................................... 94
-------------------------------
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES.......................... 95
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries............. 95
-----------------------------------------------------------------------------
5.2 Authorization of Borrowing, etc........................................................... 96
--------------------------------
5.3 Financial Condition....................................................................... 98
-------------------
5.4 No Material Adverse Change................................................................ 98
--------------------------
5.5 Title to Properties; Liens; Real Property................................................. 99
-----------------------------------------
5.6 Litigation; Adverse Facts................................................................. 99
-------------------------
5.7 Payment of Taxes.......................................................................... 100
----------------
5.8 Performance of Agreements; Materially Adverse Agreements.................................. 100
--------------------------------------------------------
5.9 Governmental Regulation................................................................... 100
-----------------------
5.10 Securities Activities..................................................................... 100
---------------------
5.11 Employee Benefit Plans.................................................................... 101
----------------------
5.12 Certain Fees.............................................................................. 101
------------
5.13 Environmental Protection.................................................................. 102
------------------------
5.14 Employee Matters.......................................................................... 102
----------------
5.15 Solvency.................................................................................. 102
--------
5.16 Matters Relating to Collateral............................................................ 103
------------------------------
5.17 Related Agreements........................................................................ 104
------------------
5.18 Disclosure................................................................................ 104
----------
5.19 Subordination of Permitted Seller Notes and Shareholder Subordinated Notes................ 105
--------------------------------------------------------------------------
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS.............................. 105
6.1 Financial Statements and Other Reports.................................................... 105
--------------------------------------
6.2 Corporate/Partnership Existence, etc...................................................... 111
-------------------------------------
6.3 Payment of Taxes and Claims; Tax Consolidation............................................ 111
----------------------------------------------
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/Condemnation Proceeds.. 111
----------------------------------------------------------------------------------------
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender Meeting; Internal
----------------------------------------------------------------------------------------
Audit; Supplemental Appraisal............................................................. 113
-----------------------------
6.6 Compliance with Laws, etc................................................................. 114
--------------------------
6.7 Environmental Review and Investigation, Disclosure, Etc.; Actions Regarding Hazardous
-------------------------------------------------------------------------------------
Materials Activities, Environmental Claims and Violations of Environmental Laws........... 114
-------------------------------------------------------------------------------
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents by
------------------------------------------------------------------------------
Subsidiaries and Future Subsidiaries...................................................... 117
------------------------------------
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real Property Collateral... 119
---------------------------------------------------------------------------------------
6.10 Interest Rate Protection.................................................................. 121
------------------------
</TABLE>
(2)
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
6.11 Post-Closing Deliveries................................................................... 121
-----------------------
6.12 Deposit Accounts and Cash Management Systems.............................................. 122
--------------------------------------------
6.13 Year 2000................................................................................. 122
---------
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS................................ 122
7.1 Indebtedness.............................................................................. 122
------------
7.2 Liens and Related Matters................................................................. 125
-------------------------
7.3 Investments; Joint Ventures............................................................... 128
---------------------------
7.4 Contingent Obligations.................................................................... 130
----------------------
7.5 Restricted Junior Payments................................................................ 131
--------------------------
7.6 Financial Covenants....................................................................... 132
-------------------
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.......................... 134
----------------------------------------------------------------
7.8 Fiscal Year............................................................................... 137
-----------
7.9 Sales and Lease-Backs..................................................................... 137
---------------------
7.10 Sale or Discount of Receivables........................................................... 138
-------------------------------
7.11 Transactions with Shareholders and Affiliates............................................. 138
---------------------------------------------
7.12 Disposal of Subsidiary Interests.......................................................... 139
--------------------------------
7.13 Conduct of Business....................................................................... 139
-------------------
7.14 Amendments or Waivers of Certain Agreements; Amendments of Documents Relating to
--------------------------------------------------------------------------------
Subordinated Indebtedness and Senior Notes; Amendments of Term Loan Documents............. 140
-----------------------------------------------------------------------------
SECTION 8.
EVENTS OF DEFAULT............................................ 141
8.1 Failure to Make Payments When Due......................................................... 141
---------------------------------
8.2 Default in Other Agreements............................................................... 141
---------------------------
8.3 Breach of Certain Covenants............................................................... 141
---------------------------
8.4 Breach of Warranty........................................................................ 141
------------------
8.5 Other Defaults Under Loan Documents....................................................... 142
-----------------------------------
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc...................................... 142
-----------------------------------------------------
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc........................................ 142
---------------------------------------------------
8.8 Judgments and Attachments................................................................. 143
-------------------------
8.9 Dissolution............................................................................... 143
-----------
8.10 Employee Benefit Plans.................................................................... 143
----------------------
8.11 Change in Control......................................................................... 143
-----------------
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations................. 144
-------------------------------------------------------------------------
8.13 Failure to Consummate Recapitalization.................................................... 144
--------------------------------------
SECTION 9.
AGENTS.................................................. 145
9.1 Appointment............................................................................... 145
-----------
9.2 Powers and Duties; General Immunity....................................................... 147
-----------------------------------
</TABLE>
(3)
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness....... 149
-----------------------------------------------------------------------------------
9.4 Right to Indemnity........................................................................ 149
------------------
9.5 Successor Administrative Agent and Swing Line Lender...................................... 149
----------------------------------------------------
9.6 Collateral Documents and Guaranty......................................................... 150
---------------------------------
SECTION 10.
MISCELLANEOUS.............................................. 151
10.1 Assignments and Participations in Loans and Letters of Credit............................. 151
-------------------------------------------------------------
10.2 Expenses.................................................................................. 155
--------
10.3 Indemnity................................................................................. 156
---------
10.4 Set-Off; Security Interest in Deposit Accounts............................................ 157
----------------------------------------------
10.5 Ratable Sharing........................................................................... 157
---------------
10.6 Amendments and Waivers.................................................................... 158
----------------------
10.7 Independence of Covenants................................................................. 159
-------------------------
10.8 Notices................................................................................... 159
-------
10.9 Survival of Representations, Warranties and Agreements.................................... 160
------------------------------------------------------
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative..................................... 160
-----------------------------------------------------
10.11 Marshalling; Payments Set Aside........................................................... 160
-------------------------------
10.12 Severability.............................................................................. 161
------------
10.13 Obligations Several; Independent Nature of Lenders' Rights................................ 161
----------------------------------------------------------
10.14 Headings.................................................................................. 161
--------
10.15 Applicable Law............................................................................ 161
--------------
10.16 Successors and Assigns.................................................................... 161
----------------------
10.17 Consent to Jurisdiction and Service of Process............................................ 162
----------------------------------------------
10.18 Waiver of Jury Trial...................................................................... 162
--------------------
10.19 Confidentiality........................................................................... 163
---------------
10.20 Counterparts; Effectiveness............................................................... 163
---------------------------
10.21 Limitation on Liability of General Partner................................................ 164
------------------------------------------
10.22 "C" Corporation Conversion................................................................ 165
--------------------------
Signature pages S-1
</TABLE>
(4)
<PAGE>
EXHIBITS
I FORM OF NOTICE OF BORROWING AMOUNT
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF REVOLVING NOTE
V FORM OF SWING LINE NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF OPINIONS OF COUNSEL TO LOAN PARTIES
VIII FORM OF OPINION OF O'MELVENY & MYERS LLP
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-BANK STATUS
XI FORM OF FINANCIAL CONDITION CERTIFICATE
XII FORM OF INTERCREDITOR AGREEMENT
XIII FORM OF PLEDGE AND SECURITY AGREEMENT
XIV FORM OF SUBSIDIARY GUARANTY
XV FORM OF HOLDINGS GUARANTY
XVI FORM OF MORTGAGE
XVII FORM OF COLLATERAL ACCESS AGREEMENT
XVIII FORM OF SUBORDINATION PROVISIONS
XIX FORM OF BORROWING BASE CERTIFICATE
(5)
<PAGE>
SCHEDULES
1.1(i) ADJUSTMENTS TO BORROWING BASE
1.1(ii) ADDBACKS TO EBITDA
1.1(iii) OTHER INVESTORS/EXISTING INVESTORS
1.1(iv) RECAPITALIZATION TRANSACTIONS
1.1(v) CLOSING DATE INITIAL VALUES
1.1(vi) CERTAIN SUBSIDIARIES
1.1(vii) VALUATION PERCENTAGES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP
4.1I CLOSING DATE MORTGAGED PROPERTIES
4.1K CLOSING DATE ENVIRONMENTAL REPORTS
5.1 SUBSIDIARIES OF COMPANY
5.3 CERTAIN UNDISCLOSED LIABILITIES
5.5 REAL PROPERTY
5.13 ENVIRONMENTAL MATTERS
6.11 POST-CLOSING DELIVERIES
6.12 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.11 CERTAIN TRANSACTIONS WITH AFFILIATES
(6)
<PAGE>
ANTHONY CRANE RENTAL, L.P.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is dated as of July 22, 1998 and entered
into by and among ANTHONY CRANE RENTAL, L.P., a Pennsylvania limited partnership
("COMPANY"), ANTHONY CRANE RENTAL HOLDINGS, L.P., a Pennsylvania limited
partnership ("HOLDINGS"), GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as
arranger and syndication agent (in such capacity, "SYNDICATION AGENT"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "LENDER" and collectively as "LENDERS"), DLJ CAPITAL
FUNDING, INC. ("DLJ"), as documentation agent (in such capacity, "DOCUMENTATION
AGENT") and FLEET NATIONAL BANK ("FLEET"), as administrative agent for Lenders
(in such capacity, "ADMINISTRATIVE AGENT") and Fleet as Collateral Agent for
Lenders (in such capacity, "COLLATERAL AGENT").
R E C I T A L S
- - - - - - - -
WHEREAS, Bain and the other Investors propose to engage in a series of
Recapitalization Transactions, (capitalized terms used herein having the
meanings assigned to those terms in subsection 1.1), whereby the Bain
Investors will acquire on the Closing Date not less than 72% of all of the
partnership interests of Holdings;
WHEREAS, Company, which pursuant to the Recapitalization Transactions will
become a Subsidiary of Holdings, has requested Lenders to extend, and Lenders
have agreed to extend, certain credit facilities in an aggregate principal
amount of $275,000,000 to Company, the proceeds of which will be used (i)
together with (a) the proceeds of $50,000,000 in aggregate principal amount of
borrowings under the Term Loan Credit Agreement, (b) approximately $41,000,000
from the Equity Contribution, (c) not less than $155,000,000 in gross cash
proceeds from the issuance and sale of the Senior Notes, (d) not less than
$25,000,000 in gross cash proceeds from the issuance and sale of the Senior
Discount Debentures and (e) the issuance of Preferred Units with a liquidation
value of approximately $22,500,000, to permit consummation of the
Recapitalization Transactions, to refinance certain existing Indebtedness of
Company and to pay related fees and expenses, and (ii) to provide financing for
working capital and other general corporate purposes of Company and its
Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien on substantially all of its real, personal and
mixed property, including a pledge of all of the equity interests of each of its
Subsidiaries (subject to certain exceptions); and
WHEREAS, Holdings, Anthony Crane Rental Corporation and all Subsidiaries of
Holdings and Company (other than Excluded Subsidiaries) and the General Partner
desire to guarantee the Obligations hereunder and under the other Loan Documents
and to secure their guaranties by
<PAGE>
granting to Administrative Agent, on behalf of Lenders, a First Priority Lien on
substantially all of their respective real, personal and mixed property,
including, without limitation, (i) a pledge of all of their partnership
interests of Company and (ii) a pledge of all of the equity interests of each of
their Subsidiaries (subject to certain exceptions).
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Holdings, Lenders and Agents
agree as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
---------------------
The following terms used in this Agreement shall have the following
meanings:
"ACCOUNTS" shall mean all of Company's and Permitted Subsidiaries'
accounts receivable, whether now or hereafter existing, arising in the
ordinary course of business from sales or leases of goods or rendition of
services made by Company or Permitted Subsidiaries, or through any of
Company's or Permitted Subsidiaries' divisions.
"ACQUISITION CONSIDERATION" means, with respect to any Permitted
Acquisition, the sum, without duplication, of any of the following
consideration paid or debt assumed in connection with such Permitted
Acquisition:
(i) Cash;
(ii) Securities (including, without limitation, Permitted
Seller Notes);
(iii) any other property;
(iv) the principal amount of any Indebtedness assumed in
connection with the applicable Permitted Acquisition;
(v) pre-tax payments anticipated to be made under Permitted
Earn-Out Agreements and other contractual arrangements
entered into pursuant to a Permitted Acquisition (the
amount of such anticipated payments to be determined by
Company and discounted at a discount rate equal to the
interest rate applicable to Loans outstanding under the
Revolving Facility on the date of the consummation of such
Permitted Acquisition, such amount the "EARNOUT VALUE");
and
(vi) the amount of any reserves established with respect to the
contingent liabilities assumed in connection with such
Permitted Acquisition (net of escrowed portions of the
purchase price paid in connection with such Permitted
Acquisition and indemnification arrangements designed to
apply to such liabilities).
"ADDITIONAL MORTGAGE" has the meaning assigned to that term in
subsection 6.9.
2
<PAGE>
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to that term
in sub section 6.9.
"ADDITIONAL SECURED INDEBTEDNESS" has the meaning assigned to that
term in sub section 7.1(xv).
"ADJUSTED BORROWING BASE AMOUNT" means, as of any date of
determination, the Borrowing Base Amount, as adjusted in accordance with
Schedule 1.1(i) annexed hereto.
---------------
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the
rate per annum obtained by dividing (i) the arithmetic average (rounded
--------
upward to the nearest 1/16 of one percent) of the offered quotations, if
any, to first class banks in the interbank Eurodollar market by Reference
Lenders for U.S. dollar deposits of amounts in same day funds comparable to
the respective principal amounts of the Eurodollar Rate Loans of Reference
Lenders for which the Adjusted Eurodollar Rate is then being determined
(which principal amount shall be deemed to be $1,000,000 in the case of any
Reference Lender not making, converting to or continuing such a Eurodollar
Rate Loan) with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the stated
-- -----
maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D
(or any successor category of liabilities under Regulation D); provided
--------
that if any Reference Lender fails to provide Administrative Agent with its
aforementioned quotation then the Adjusted Eurodollar Rate shall be
determined based on the quotation(s) provided to Administrative Agent by
the other Reference Lender(s).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and
"under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.
"AGENT" means, individually, each of Syndication Agent, Administrative
Agent, Documentation Agent and Collateral Agent, and "AGENTS" means
Syndication Agent, Administrative Agent, Documentation Agent and Collateral
Agent, collectively.
3
<PAGE>
"AGREEMENT" means this Credit Agreement dated as of July 22, 1998, as
it may be amended, supplemented or otherwise modified from time to time.
"APPLICABLE BASE RATE MARGIN" means (a) for the period from the
Closing Date up to (but excluding) the date of commencement of the first
Pricing Period, 1.25% per annum, and (b) for any date thereafter, a rate
per annum equal to the percentage set forth below opposite the Applicable
Total Leverage Ratio in effect as of such date of determination, any change
in any such Applicable Base Rate Margin to be effective on the date of any
corresponding change in the Applicable Total Leverage Ratio.
<TABLE>
<CAPTION>
===========================================================
APPLICABLE APPLICABLE
TOTAL LEVERAGE BASE RATE MARGIN
RATIO
===========================================================
<S> <C>
greater than or equal to 1.25%
5.5:1.00
-----------------------------------------------------------
less than 5.5:1.00 but 1.00%
greater than or equal to
5.0:1.00
-----------------------------------------------------------
less than 5.0:1.00 but 0.75%
greater than or equal to
4.5:1.00
-----------------------------------------------------------
less than 4.5:1.00 but 0.50%
greater than or equal to
4.0:1.00
-----------------------------------------------------------
less than 4.0:1.00 but 0.25%
greater than or equal to
3.5:1.00
-----------------------------------------------------------
less than 3.5:1.00 0.00%
===========================================================
</TABLE>
"APPLICABLE COMMITMENT FEE PERCENTAGE" means (a) for the period from
the Closing Date up to (but excluding) the date of commencement of the
first Pricing Period, 1/2 of 1% per annum and (b) at any date of
determination thereafter, a rate per annum equal to the percentage set
forth below opposite the Applicable Total Leverage Ratio in effect as of
such date of determination, any change in the Applicable Commitment Fee
Percentage to be effective on the date of any corresponding change in the
Applicable Total Leverage Ratio.
4
<PAGE>
<TABLE>
<CAPTION>
===========================================================
APPLICABLE APPLICABLE
TOTAL LEVERAGE COMMITMENT
RATIO FEE PERCENTAGE
------------------------------------------------------------
<S> <C>
greater than or equal to 0.500%
5.0:1.00
------------------------------------------------------------
less than 5.0:1.00 but greater 0.375%
than or equal to 4.0:1.00
------------------------------------------------------------
less than 4.0:1.00 0.250%
============================================================
</TABLE>
"APPLICABLE EURODOLLAR RATE MARGIN" means (a) for the period from the
Closing Date up to (but excluding) the date of commencement of the first
Pricing Period, 2.25% per annum, and (b) for any date thereafter, a rate
per annum equal to the percentage set forth below opposite the Applicable
Total Leverage Ratio in effect as of such date of determination, any change
in any such Applicable Eurodollar Rate Margin to be effective on the date
of any corresponding change in the Applicable Total Leverage Ratio.
<TABLE>
<CAPTION>
============================================================
APPLICABLE APPLICABLE
TOTAL LEVERAGE EURODOLLAR RATE
RATIO MARGIN
============================================================
<S> <C>
greater than or equal to 2.25%
5.5:1.00
------------------------------------------------------------
less than 5.5:1.00 but 2.00%
greater than or equal to
5.0:1.00
------------------------------------------------------------
less than 5.0:1.00 but 1.75%
greater than or equal to
4.5:1.00
------------------------------------------------------------
less than 4.5:1.00 but 1.50%
greater than or equal to
4.0:1.00
------------------------------------------------------------
less than 4.0:1.00 but 1.25%
greater than or equal to
3.5:1.00
------------------------------------------------------------
less than 3.5:1.00 1.00%
============================================================
</TABLE>
"APPLICABLE TOTAL LEVERAGE RATIO" means, with respect to any date of
determination, the Total Leverage Ratio set forth in the Pricing
Certificate (as defined below) in effect for the Pricing Period (as defined
below) in which such date of determination occurs. For
5
<PAGE>
purposes of this definition, (i) "PRICING CERTIFICATE" means an Officer's
Certificate of Company certifying as to the Total Leverage Ratio as of the
last day of any Fiscal Quarter and setting forth the calculation of such
Total Leverage Ratio in reasonable detail, which Officer's Certificate may
be delivered to Administrative Agent at any time on or after the date of
delivery by Company of the Compliance Certificate (the "RELATED COMPLIANCE
CERTIFICATE") with respect to the period ending on the last day of such
Fiscal Quarter pursuant to subsection 6.1(iv), and (ii) "PRICING PERIOD"
means each period commencing on the first Business Day after the delivery
to Administrative Agent of a Pricing Certificate and ending on the first
Business Day after the next Pricing Certificate is delivered to
Administrative Agent; provided that, anything contained in this definition
--------
to the contrary notwithstanding, (a) the first Pricing Period for purposes
of calculating the Applicable Total Leverage Ratio shall commence no
earlier than March 31, 1999, and the Pricing Certificate in respect of such
first Pricing Period may be delivered at any time on or after such date and
shall relate to the most recent financial statements delivered by Company
to Administrative Agent prior to such date pursuant to subsection 6.1(ii)
or 6.1(iii), (b) the Applicable Total Leverage Ratio for the period from
the Closing Date to but excluding the date of commencement of such first
Pricing Period shall be deemed to be 5.50:1.00 for purposes of making the
relevant calculation referred to above and (c) in the event that, after the
commencement of such first Pricing Period, (X) Company fails to deliver a
Pricing Certificate to Administrative Agent setting forth the Total
Leverage Ratio as of the last day of any Fiscal Quarter on or before the
last day on which Company is required to deliver the Related Compliance
Certificate (such last day being the "CUTOFF DATE") and (Y) Administrative
Agent determines (each such determination being an "AGENT DETERMINATION")
on or after the Cutoff Date (on the basis of the Related Compliance
Certificate or a Pricing Certificate delivered after the Cutoff Date) that
the Applicable Total Leverage Ratio that would have been in effect if
Company had delivered a Pricing Certificate on the Cutoff Date is greater
than the Total Leverage Ratio set forth in the most recent Pricing
Certificate actually delivered by Company, then (1) the Applicable Total
Leverage Ratio in effect for purposes of making the relevant calculation
referred to above for the period from the Cutoff Date to the date of
delivery by Company of the next Pricing Certificate (or, if earlier, the
next date on which an Agent Determination is made) shall be the Total
Leverage Ratio determined pursuant to the Agent Determination and (2) on
the first Business Day after Administrative Agent delivers written notice
to Company of any Agent Determination, Company shall pay to Administrative
Agent, for distribution (as appropriate) to Lenders, an aggregate amount
equal to the additional interest, letter of credit fees and commitment fees
Company would have been required to pay in respect of all applicable Loans,
Letters of Credit or Commitments in respect of which any interest or fees
have been paid by Company during the period from the Cutoff Date to the
date such notice is given by Administrative Agent to Company if the amount
of such interest and fees had been calculated using the Applicable Total
Leverage Ratio based on such Agent Determination.
"APPROVED FUND" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such
Lender or by an Affiliate of such investment advisor.
6
<PAGE>
"ASSET SALE" means the sale by Holdings or any of its Subsidiaries to
any Person, other than Holdings or any of its wholly-owned Subsidiaries
(and solely with respect to clause (i), the General Partner) of (i) any of
the stock of any of Holdings' Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Holdings or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Holdings or any of its Subsidiaries; provided, however, that Asset Sales
-------- -------
shall not include (1) equipment sold in the ordinary course of business,
(2) any other assets to the extent that the aggregate fair market value of
an asset (at the time of sale thereof) sold in any single transaction or
related series of transactions is equal to $1,000,000 or less, (3) any sale
or discount, in each case without recourse, of accounts receivable arising
in the ordinary course of business, but only in connection with the
compromise or collection thereof, (4) any sale or exchange of specific
items of equipment, so long as the purpose of each such sale or exchange is
to acquire (and results within 365 days of such sale or exchange in the
acquisition of) replacement items of equipment which are the functional
equivalent of the item of equipment so sold or exchanged, (5) the leasing
(pursuant to operating leases in the ordinary course of business) or
licensing of real or personal property, including intellectual property,
(6) the sale for cash in the ordinary course of business of Cash
Equivalents, and (7) disposals or replacements of obsolete, uneconomical,
negligible, worn out or surplus assets or property in the ordinary course
of business; provided however that solely for purposes of determining Asset
-------- -------
Sales under subsection 2.4A(iii)(a), none of the above exclusions
(excluding clause (5)) to Asset Sales shall apply in the event that the
amount of proceeds of transactions relating to such exclusions in any
Fiscal Year shall exceed $10,000,000 in the aggregate.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of Exhibit IX annexed hereto.
----------
"BAIN" means Bain Capital, Inc. and/or one or more of its Affiliates.
"BAIN ADVISORY SERVICES AGREEMENT" means that certain Advisory
Services Agreement by and among Company, Holdings and Bain, in the form
delivered to Agents prior to the Closing Date and as such agreement may
thereafter be amended, supplemented or otherwise modified from time to time
to the extent permitted under subsection 7.14A.
"BAIN INVESTORS" means collectively, Bain/ACR, L.L.C., BCIP Associates
II, BCIP Associates II-B, Bain Capital Fund VI, L.P., Bain Capital Fund VI-
B, L.P., BCIP Trust Associates II, BCIP Trust Associates II-B, and BCIP
Associates II-C.
"BAIN MANAGEMENT FEES" means the fees (including one-time fees payable
in connection with acquisitions, divestitures and financings) and expenses
payable by Holdings or the Company to Bain pursuant to the Bain Advisory
Services Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE 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:
7
<PAGE>
(i) the rate of interest announced publicly by Fleet in Boston,
Massachusetts, from time to time, as Fleet's base rate; and
(ii) 1/2 of 1% per annum above the Federal Funds Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"BORROWING BASE AMOUNT" means, at any date of determination, the sum
of:
(i) 100% of the Orderly Liquidation Value of Eligible Cranes and
Lifting Equipment; plus
----
(ii) 75% of the Orderly Liquidation Value of Eligible Trucks and
Trailers; plus
----
(iii) 85% of the aggregate value of Eligible Account Receivables;
plus
----
(iv) 75% of the aggregate value of Eligible Parts and Supplies
Inventory; all as reflected on the most recently delivered Borrowing Base
Certificate.
"BORROWING BASE CERTIFICATE" means a certificate substantially in the
form of Exhibit XIX annexed hereto, with such modifications to form and
-----------
presentation as Administrative Agent may request from time to time,
delivered to Administrative Agent by Company pursuant to subsections 4.1U
and 6.1(xvii) or as otherwise provided under Schedule 1.1(i).
---------------
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York and
Pennsylvania or is a day on which banking institutions located in such
state are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar
Rate Loans, any day that is a Business Day described in clause (i) above
and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, would be required to be accounted for as a capital
lease on the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means: (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year from
the date of acquisition
8
<PAGE>
thereof and, at the time of acquisition, having one of the two highest
ratings obtainable from either Standard & Poor's Ratings Group ("S&P") or
Moody's Investors Service, Inc. ("MOODY'S"); (iii) commercial paper
maturity no more than one year from the date of creation thereof and at the
time of acquisition, having a rating of at least A-1 from S&P or at least
P-1 from Moody's; (iv) certificates of deposit or bankers' acceptances (or,
with respect to foreign banks, similar instruments) maturing within one
year from the date of acquisition thereof issued by any bank organized
under the laws of the United States of America or any state or territory
thereof or the District of Columbia, Japan or any member of the European
Economic Community or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than
$200,000,000; (v) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause
(iv) above; and (vi) investments in money market funds which invest
substantially all of their assets in securities of the types described in
clauses (i) through (v) above.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit X annexed hereto delivered by a Lender to
---------
Administrative Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means the date on or before July 31, 1998, on which the
initial Loans are made.
"CLOSING DATE MORTGAGE" has the meaning assigned to that term in
subsection 4.1I.
"CLOSING DATE MORTGAGED POLICIES" has the meaning assigned to that
term in sub section 4.1I.
"CLOSING DATE MORTGAGED PROPERTY" has the meaning assigned to that
term in sub section 4.1I.
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the
Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouseman or processor (excluding lessees
of property or equipment in the ordinary course of business) in possession
of any Collateral, substantially in the form of Exhibit XVII annexed hereto
------------
with such changes thereto as may be agreed to by Administrative Agent in
the reasonable exercise of its discretion.
"COLLATERAL AGENT" means Fleet in its capacity as Collateral Agent
under the Collateral Documents and the Intercreditor Agreement and also
means any successor Collateral Agent appointed pursuant to Section 6(g) of
the Intercreditor Agreement.
9
<PAGE>
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Intercreditor Agreement, the Mortgages and all other instruments or
documents delivered by any Loan Party pursuant to this Agreement or any of
the other Loan Documents in order to grant to Collateral Agent, on behalf
of Lenders, a Lien on any real, personal or mixed property of that Loan
Party as security for the Obligations.
"COLLATERAL WARRANTIES" shall mean the representations and warranties
made with respect to the Collateral pursuant to Sections 5.5A and 5.16A of
this Agreement and Sections 5 and 8.6 of the Pledge and Security Agreement.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or
services by Company or any of its Subsidiaries in the ordinary course of
business of Company or such Subsidiary.
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"COMMON UNITS" means common partnership interests of Holdings
(including Class A and Class L units).
"COMPANY" has the meaning assigned to such term in the introduction to
this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit VI annexed hereto delivered to Administrative Agent by Company
----------
pursuant to subsection 6.1(iv).
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain Confidential
Information Memorandum prepared by GSCP, DLJ and Fleet relating to the Term
Loans and Revolving Loans dated June 1998.
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has substantially agreed in writing for the benefit
of Administrative Agent (which writing has been delivered to Administrative
Agent), whether under the terms of the applicable lease, under the terms of
a Landlord Consent and Estoppel, or otherwise, to the matters described in
the definition of "Landlord Consent and Estoppel," which interest, if a
subleasehold or sub-subleasehold interest, is not subject to any contrary
restrictions contained in a superior lease or sublease.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income (including,
without duplication, foreign withholding taxes and any payment of Permitted
Tax Distributions), (iv) total depreciation expense, (v) total amortization
expense, (vi) other non-cash items reducing Consolidated Net Income, and
(vii) to the extent deducted in determining Consolidated Net Income, those
10
<PAGE>
items described on Schedule 1.1(ii) annexed hereto, less (a) other non-cash
---------------- ----
items increasing Consolidated Net Income, and (b) to the extent included in
Consolidated Net Income, net gains on sales of used Cranes and Lifting
Equipment, all of the foregoing as determined on a consolidated basis for
Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases
which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "purchases of property, plant or
equipment" or comparable items reflected in the consolidated statement of
cash flows of Company and its Subsidiaries.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period excluding, however, any
--------- -------
interest expense not payable in Cash (including interest expense paid in
kind and amortization of discount, of deferred financing fees, of premiums
paid on Hedge Agreements and of debt issuance costs).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total cash and
non-cash interest expense (including that portion attributable to Capital
Leases in accordance with GAAP, interest expense paid in kind and
amortization or write-off of discount, of deferred financing fees, of
premiums paid on Hedge Agreements and of debt issuance costs, and accretion
of any debt discount and capitalized interest) of Company and its
Subsidiaries on a consolidated basis in accordance with GAAP with respect
to all outstanding Indebtedness of Company and its Subsidiaries, including
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, net costs under
Interest Rate Agreements, commitment fees accrued under subsection 2.3A and
any administrative agent's fees payable to Administrative Agent, but
excluding, however, any amounts referred to in subsection 2.3 payable to
--------- -------
Agents and Lenders on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
--------
Person (other than a Subsidiary of Company) in which any other Person
(other than Company or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Company or is merged into or consolidated
with Company or any of its Subsidiaries or that Person's assets are
acquired by Company or any of its Subsidiaries, (iii) the income of any
Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not
at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) any gains or
losses attributable to Asset Sales, other than of new or used Cranes and
Lifting Equipment (without regard to the $1,000,000
11
<PAGE>
limitation set forth in the definition thereof or reserves relating thereto
and the related tax effects) or returned surplus assets of any Pension
Plan, and (v) (to the extent not included in clauses (i) through (iv)
above) any net extraordinary gains or net extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and
its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another
if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (iii) under Hedge
Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described
under subclauses (X) or (Y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to (a) the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited, or (B) if neither amount in
clause (a) is stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform)
as determined by such Person in good faith. Contingent Obligations shall
not include standard contractual indemnities entered into in the ordinary
course of business.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other material instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is
subject.
"CORPORATE LOAN PARTY" means any Loan Party which is a corporation.
"CRANES AND LIFTING EQUIPMENT" shall mean each item of equipment that
is owned by the Company or its Permitted Subsidiaries that constitutes any
of the following: a hydraulic truck crane, a hydraulic rough terrain crane,
an aerial lift, a carry-deck crane, a
12
<PAGE>
boom truck, a tower crane, a crawler crane, a conventional truck crane or a
crane attachment; including, without limitation, those items identified on
Schedule 2.1(d)(A) to the Pledge and Security Agreement.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its
Subsidiaries is a party which is entered into for the purpose of hedging
against fluctuations in currency values; provided however that such
----------------
agreements (i) relate only to the purchase or sale of equipment used in the
business of the Company and (ii) are not entered into for speculative
purposes.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"DLJ." has the meaning assigned to that term in the introduction to
this Agreement.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean the aggregate face amount of
Company's and Permitted Subsidiaries' Accounts, as reflected on their books
and records in accordance with GAAP, payable in Dollars, that conform to
the warranties contained in this definition and to the Collateral
Warranties. Unless otherwise approved in writing by Administrative Agent,
no Account shall be deemed to be an Eligible Account Receivable if:
(i) the Account is unpaid 90 days or more from the original
invoice date; provided that with respect to any Account designated by
--------
Administrative Agent as a "dated account", such Account shall not be
deemed ineligible pursuant to this clause (i) unless unpaid more than
30 days or more from its due date or 180 days or more from its invoice
date; or
(ii) such Account if from the same account debtor (or any
affiliate thereof) and fifty percent (50%) or more, in face amount, of
other Accounts from such account debtor (or any affiliate thereof)
ineligible under the provisions of clause (i) above;
(iii) the Account, when aggregated with all other Accounts of
such account debtor, exceeds fifteen percent (15%) in face value of
all consolidated Accounts of Company and Permitted Subsidiaries in the
aggregate then outstanding, to the extent of such excess; or
(iv) (A) the account debtor is also a creditor of Company or
Permitted Subsidiaries, to the extent of the amount owed by Company or
Permitted
13
<PAGE>
Subsidiaries to the account debtor, (B) the account debtor has
disputed its liability on, or the account debtor has made any claim
with respect to, such Account or any other Account due from such
account debtor to Company or Permitted Subsidiaries, which has not
been resolved to the extent of such dispute or (C) the Account
otherwise is or may become subject to any right of setoff by the
account debtor, to the extent of the amount of such setoff; or
(v) to the knowledge of the Company, the account debtor has
commenced a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or made an assignment for the
benefit of creditors, or if a decree or order for relief has been
entered by a court having jurisdiction in the premises in respect to
the account debtor in an involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or if any other
petition or other application for relief under the federal bankruptcy
laws has been filed by or against the account debtor, or if the
account debtor has failed, suspended business, ceased to be solvent,
or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion
of its assets or affairs; or
(vi) the sale is to an account debtor outside the continental
United States, the United States Virgin Islands, or Canada, unless the
sale is (a) on letter of credit, guaranty or acceptance terms, in each
case acceptable to Administrative Agent in its sole discretion, or (b)
otherwise approved by and acceptable to Administrative Agent in its
reasonable discretion; or
(vii) the sale to the account debtor is on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return except in accordance with ordinary course of
business dealings or customary practice; or
(viii) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless Company or such
Permitted Subsidiary duly and effectively assigns its rights to
payment of such Account to Administrative Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727
et seq.); or
-- ----
(ix) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor or the
services giving rise to such Account have not been performed by
Company or a Permitted Subsidiary and accepted by the account debtor
or the Account otherwise does not represent a final sale; or
(x) the Account is not subject to a valid, enforceable and
First Priority perfected Lien in favor of Administrative Agent; or
(xi) Administrative Agent, in the exercise of its reasonable
discretion, determines it to be ineligible.
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<PAGE>
"ELIGIBLE ASSIGNEE" means (a) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of
any other country or a political subdivision thereof; provided that (x)
--------
such bank is acting through a branch or agency located in the United States
or (y) such bank is organized under the laws of a country that is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses including
insurance companies, funds, investment companies and lease financing
companies; and (b) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that
is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor; provided that no Affiliate of
--------
Holdings shall be an Eligible Assignee.
"ELIGIBLE CRANES AND LIFTING EQUIPMENT" shall mean each of the Cranes
and Lifting Equipment that (i) is owned solely by Company or a Permitted
Subsidiary and with respect to which Company or a Permitted Subsidiary has
good, valid and marketable title, (ii) unless in transit, is located on
property of a customer of Company or a Permitted Subsidiary, or is stored
on property that is either owned or leased by Company or a Permitted
Subsidiary (provided that; with respect to Cranes and Lifting Equipment
stored on property leased by Company or a Permitted Subsidiary, Company or
a Permitted Subsidiary, if requested by Administrative Agent, shall have
delivered in favor of Administrative Agent a Collateral Access Agreement
from the landlord of such leased property); (iii) is subject to a valid,
enforceable and perfected First Priority Lien in favor of Collateral Agent
(provided that, notwithstanding the provisions of this clause (iii) or
--------
Schedule 1.1(i), with respect to any item included in Cranes and Lifting
Equipment acquired after the Closing Date that is subject to a certificate
of title, so long as the documentation necessary to reflect the appropriate
transfer of title and recordation of a Lien in favor of Collateral Agent in
any such item has been filed in the appropriate filing office, such item
shall be included in the definition of Eligible Cranes and Lifting
Equipment for a period of up to 90 days pending final action by such filing
office with respect for such filings; provided further that, the Orderly
-------- -------
Liquidation Value of such item during any such period shall be deemed to be
75% of their purchase price (net of transportation costs and taxes); (iv)
is located in the United States, the United States Virgin Islands, Canada
or a Caribbean jurisdiction; (v) is not obsolete; (vi) unless otherwise
undergoing ordinary maintenance, is used or is available for use, rent or
lease in the business of Company and its Permitted Subsidiaries, and is in
a condition suitable for such use, rent or lease; (vii) conforms to the
warranties contained in this definition and to the Collateral Warranties;
and (viii) Administrative Agent has not determined in its reasonable
judgment to be ineligible; provided that, for purpose of determining
--------
ineligibility pursuant to this clause (viii) with respect to Cranes and
Lifting Equipment included in Category 1 (as set forth in Schedule
1.1(vii)), Crawler Cranes and Conventional Truck Cranes, Administrative
Agent shall make its determination on the basis of the criteria set forth
in clauses (i) - (vii) of this definition and, with respect to any such
determination regarding any single item with a value of $500,000 or more or
any group of
15
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items of a value of $1,500,000 or more during any Fiscal Year, no
determination of ineligibility shall be effective until 10 days prior
written notice has been given by Administrative Agent to Company with
respect to the ineligibility of such items.
"ELIGIBLE PARTS AND SUPPLIES INVENTORY" shall mean each item included
in the Parts and Supplies Inventory that (i) is owned solely by Company or
a Permitted Subsidiary and with respect to which Company or a Permitted
Subsidiary has good, valid and marketable title; (ii) is stored on property
that is either owned or leased by Company or a Permitted Subsidiary
(provided that; with respect to Parts and Supplies Inventory stored on
property leased by Company or a Permitted Subsidiary, Company or such
Permitted Subsidiary, at the request of Administrative Agent, shall have
delivered in favor of the Agent a Collateral Access Agreement from the
landlord of such leased property); (iii) is subject to a valid, enforceable
and perfected First Priority Lien in favor of Collateral Agent; (iv) is
located in the United States, the United States Virgin Islands, Canada or a
Caribbean jurisdiction; (v) is not obsolete; (vi) otherwise conforms to the
warranties contained in this definition and to the Collateral Warranties;
(vii) is subject to record keeping, valuation methodologies, and process
and reporting controls reasonably acceptable to Administrative Agent; and
(viii) Administrative Agent has not determined, in its reasonable judgment,
to be ineligible.
"ELIGIBLE TRUCKS AND TRAILERS" shall mean each of the Trucks and
Trailers that (i) is owned solely by Company or a Permitted Subsidiary and
with respect to which Company or a Permitted Subsidiary has good, valid and
marketable title; (ii) unless in transit or undergoing ordinary
maintenance, is stored on property that is either owned or leased by
Company or a Permitted Subsidiary when not rented to an account debtor
pursuant to an equipment lease (provided that, with respect to Trucks and
Trailers stored on property leased by Company or a Permitted Subsidiary,
Company or such Permitted Subsidiary, at the request of Administrative
Agent, shall have delivered in favor of Administrative Agent a Collateral
Access Agreement from the landlord of such leased property); (iii) is
subject to a valid, enforceable and perfected First Priority Lien in favor
of Collateral Agent; (iv) is located in the United States, the United
States Virgin Islands, Canada or a Caribbean jurisdiction; (v) is not
obsolete; (vi) unless otherwise undergoing ordinary maintenance, is used or
available for use and in a condition available for use in the ordinary
course of business in connection with Company's or a Permitted Subsidiary's
equipment rental and sales activities; (vii) otherwise conforms to the
warranties contained in this definition and to the Collateral Warranties;
and (viii) Administrative Agent has not determined in its reasonable
judgment to be ineligible.
"EMPLOYMENT AGREEMENT" means the employment or consulting agreements,
if any, between Company and each of Sam Anthony and Ray G. Anthony in the
form provided to Agents pursuant to subsection 4.1C on or prior to the
Closing Date.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates.
16
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"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of governmental authorities
relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare from environmental hazards (including
Hazardous Materials), in any manner applicable to Holdings or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et seq.), the
-- ---
Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the
-- ---
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the
-- ---
Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean
-- ---
Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15
-- ---
U.S.C. (S) 2601 et seq.), the Federal Insecticide, Fungicide and
-- ---
Rodenticide Act (7 U.S.C. (S)136 et seq.), the Occupational Safety and
-- ---
Health Act (29 U.S.C. (S) 651 et seq.), the Oil Pollution Act (33 U.S.C.
-- ---
(S) 2701 et seq.) and the Emergency Planning and Community Right-to-Know
-- ---
Act (42 U.S.C. (S) 11001 et seq.), each as amended or supplemented, any
-- ---
analogous present or future state or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.
"EQUIPMENT YEAR" shall mean, with respect to any determination made
pursuant to Schedule 1.1(vii), the number of calendar years since the year
-----------------
of manufacture of each item of Rental Equipment (with the year of
manufacture representing year 0).
"EQUITY CONTRIBUTION" means, collectively, (i) the contribution by
Bain Investors and their Related Parties and Other Investors to Holdings of
cash in exchange for Common Units of Holdings and (ii) the rollover equity
contribution by the Existing Investors for Common Units, as contemplated by
the Recapitalization Transactions in the aggregate amount valued at not
less than $41,000,000.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto, and the regulations
promulgated and rulings issued thereunder.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning
of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that
17
<PAGE>
Person is a member; and (iii) any member of an affiliated service group
within the meaning of Section 414(m) or (o) of the Internal Revenue Code of
which that Person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is a member. Any former
ERISA Affiliate of Holdings or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of Holdings or such Subsidiary within the
meaning of this definition with respect to the period such entity was an
ERISA Affiliate of Holdings or such Subsidiary and with respect to
liabilities arising after such period for which Holdings or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to make by its
due date a required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure to make any
required contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination of
any such Pension Plan resulting in liability pursuant to Section 4063 or
4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason
of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is
any potential liability therefor, or the receipt by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of
an act or omission which could give rise to the imposition on Holdings or
any of its Subsidiaries of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409, Section
502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) the assertion of a material claim (other than routine
claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Holdings or any of its
Subsidiaries in connection with any Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan
(or any other Employee Benefit Plan intended to be qualified under Section
401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of
the Internal Revenue Code; or (xi) the
18
<PAGE>
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCHANGE RATE" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter
of Credit, the nominal rate of exchange of the applicable Issuing Lender in
the New York foreign exchange market for the purchase by such Issuing
Lender (by cable transfer) of such currency in exchange for Dollars at
12:00 noon (New York time) one Business Day prior to such date, expressed
as a number of units of such currency per one Dollar.
"EXCLUDED SUBSIDIARIES" means, collectively, all Subsidiaries in which
the fair market value (as reasonably determined and certified by senior
management of Company) of that Subsidiary's assets does not exceed
$1,000,000; provided, that no Subsidiary shall be an Excluded Subsidiary if
--------
it acquires assets with a fair market value in excess of $1,000,000 in the
aggregate or incurs Indebtedness or Contingent Obligations in excess of
$1,000,000 in the aggregate; provided further that there shall not be more
--------
than ten Excluded Subsidiaries in existence at any time.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement dated
as of September 28, 1994, by and among Company as borrower, certain
financial institutions and Corestates Bank, N.A. as agent, as amended prior
to the Closing Date.
"EXISTING INVESTORS" means certain existing shareholders, management
officers and employees of Company and other investors identified in
Schedule 1.1(iii) annexed hereto as Existing Investors.
-----------------
"FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Holdings or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate 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 which is a Business Day, the average of the
quotations for such day on such transactions received by Administrative
Agent from three Federal funds brokers of recognized standing selected by
Administrative Agent.
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<PAGE>
"FINANCIAL PLAN" has the meaning assigned to that term in subsection
6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral (other than
(a) Permitted Encumbrances and (b) with respect to any Collateral other
than Collateral constituting the Borrowing Base Amount, Liens permitted
pursuant to subsections 7.2A(iii), 7.2A(viii), 7.2A(ix), 7.2(xi) and
7.2A(xv) and (ii) such Lien is the only Lien (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2) to which such
Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its Subsidiaries
ending on the December 31 of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to
the calendar year in which such Fiscal Year ends.
"FLEET" has the meaning assigned to that term in the introduction to
this Agreement.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"FOREIGN CASH EQUIVALENTS" means certificates of deposit or bankers
acceptances of any bank organized under the laws of Canada or a Caribbean
jurisdiction or any country that is a member of the European Economic
Community whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof, in each case with maturities of not more than one year from the
date of acquisition.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent and Swing Line Lender located at One Federal Street, Boston,
Massachusetts or (ii) such other office of Administrative Agent and Swing
Line Lender as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent and Swing Line Lender to
Company and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in sub sections 1.2 and 1.4, generally accepted accounting
principles set forth in opinions and pro nouncements 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 may be approved
by a significant segment of the accounting profession, in each case as the
same are applicable to the circumstances as of the date of determination.
20
<PAGE>
"GENERAL PARTNER" means (i) immediately prior to the Recapitalization
Transaction, Anthony Crane Rental, Inc., and (ii) after giving effect to
such Recapitalization Transaction, ACR Management LLC, a Delaware limited
liability company, in each case the sole general partner of Company, or any
permitted successor thereto.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal,
state or local governmental authority, agency or court.
"GSCP" has the meaning assigned to that term in the introduction to
this Agreement.
"GUARANTIES" means the Holdings Guaranty and the Subsidiary Guaranty.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined in any statute or regulation as or included in the
definition in any statute or regulation of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous
waste", "infectious waste", "toxic substances", or any other term or
expression intended to define, list or classify substances by reason of
properties harmful to health, safety or the indoor or outdoor environment
(including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar meaning and regulatory
effect under any applicable Environmental Laws); (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde
foam insulation; (viii) polychlorinated biphenyls, including any oil or
dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and
(x) any other chemical, material or substance which could pose a hazard to
the health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, present or future
activity, event or occurrence involving any Hazardous Materials, including
the use, manufacture, possession, storage, holding, migration, Release,
threatened Release, discharge, placement, generation, transportation,
processing, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective
action or response action with respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or
currency values.
"HOLDINGS" has the meaning assigned to that term in the introduction
to this Agreement.
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<PAGE>
"HOLDINGS GUARANTY" means the Holdings Guaranty executed and delivered
by Holdings and the General Partner on the Closing Date, substantially in
the form of Exhibit XV annexed hereto, as such Holdings Guaranty may be
----------
amended, supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such
obligations incurred under ERISA and any accrued expenses or trade
payables), (a) which obligation in accordance with GAAP would be shown as a
liability on the balance sheet of such Person or (b) which purchase price
is evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person. The amount of any Indebtedness which is non-recourse to the obligor
thereunder or to any other obligor and for which recourse is limited to an
identified asset or assets shall be equal to the lesser of (1) the stated
amount of such obligation and (2) the fair market value of such asset or
assets. Obligations under Interest Rate Agreements and Currency Agreements
constitute (X) in the case of Hedge Agreements, Contingent Obligations, and
(Y) in all other cases, Investments, and in neither case constitute
Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in subsection 10.3.
"INDEPENDENT APPRAISER" means Hunyady Appraisal Services or such other
appraisal firm selected by the Company and reasonably acceptable to the
Administrative Agent.
"INDEPENDENT PUBLIC ACCOUNTANT" means any of the five largest public
accounting firms in the United States selected by Holdings.
"INITIAL PERIOD" means the period commencing on and including the
Closing Date and ending on (but excluding) the earlier of (i) the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments and (ii) the date which is 30 days
after the Closing Date.
"INITIAL VALUE" shall mean, with respect to each item of Rental
Equipment, an amount equal to (y) with respect to each item of Rental
Equipment in existence as of the Closing Date, the appraised orderly
liquidation value (assuming liquidation within an 180-day period) of each
item of Rental Equipment specified on Schedule 1.1(v) annexed hereto, and
---------------
(z) with respect to each item of Rental Equipment acquired subsequent to
the Closing Date, an amount (which amount shall not, in any event, exceed
the purchase price thereof, net of shipping costs and taxes) to be
determined in accordance with the provisions of Schedule 1.1(i).
---------------
22
<PAGE>
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes which are used in the
conduct of the business of Holdings and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise),
business or operations of Holdings and its Subsidiaries, taken as a whole.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement
executed and delivered by Administrative Agent, Fleet, as administrative
agent for lenders under the Term Loan Credit Agreement, and Collateral
Agent on the Closing Date, substantially in the form of Exhibit XII annexed
-----------
hereto, as such Intercreditor Agreement may thereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate Loan,
each March 15, June 15, September 15 and December 15 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
--------
Period of longer than three months, "Interest Payment Date" shall also
include each date that is three months, or an integral multiple thereof,
after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Holdings or any of its
Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any
successor statute, and the regulations promulgated by the Internal Revenue
Service thereunder.
"INVENTORY" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are
then held by such Person for sale or lease, including raw materials and
work in process.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary
of Holdings), (ii) any direct or indirect redemption, retirement, purchase
or other acquisition for value, by any Subsidiary of Holdings from any
Person other than Holdings or any of its Subsidiaries, of any equity
Securities of such Subsidiary, (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business) or capital contribution by Holdings or any of its Subsidiaries
23
<PAGE>
to any other Person, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from
sales to that other Person in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-
offs with respect to such Investment.
"IP COLLATERAL" means, collectively, the "Intellectual Property" as
defined in the Pledge and Security Agreement.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any Subsidiary of any Person be considered
--------
to be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, reasonably satisfactory in form and
substance to Administrative Agent, pursuant to which such lessor
substantially agrees, for the benefit of Administrative Agent, (i) that
without any further consent of such lessor or any further action on the
part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to
the purchaser at a foreclosure sale or in a transfer in lieu of such a sale
(and to a subsequent third party assignee if Administrative Agent, any
Lender, or an Affiliate of either so acquires such Leasehold Property),
(ii) that such lessor shall not terminate such lease as a result of a
default by such Loan Party thereunder without first giving Administrative
Agent notice of such default and at least 60 days (or, if such default
cannot reasonably be cured by Administrative Agent within such period, such
longer period as may reasonably be required) to cure such default, (iii) to
the matters contained in a Collateral Access Agreement, and (iv) to such
other matters relating to such Leasehold Property as Administrative Agent
may reasonably request; provided, however, that Administrative Agent may
-------- -------
determine in its reasonable discretion that any one or more of the
agreements set forth in clauses (i) through (iv) are not required to be
included in a Landlord Consent and Estoppel with respect to a particular
Leasehold Property.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its
reasonable discretion as not being required to be included in the
Collateral.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include Swing Line Lender unless
24
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the context otherwise requires; provided that the term "Lenders", when used
--------
in the context of a particular Commitment, shall mean Lenders having that
Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
----
Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B). For purposes of this definition, any amount
described in clause (i) or (ii) of the preceding sentence which is
denominated in a currency other than Dollars shall be valued based on the
applicable Exchange Rate for such currency as of the applicable date of
determination.
"LEVERAGE RATIO" means the ratio of (i) the average monthly
outstanding principal amount of the Loans, the Term Loans and Additional
Secured Indebtedness, less cash on hand as of the date of determination,
----
for the quarterly period ending on the last day of any Fiscal Quarter to
(ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then
ended, in each case as set forth in the most recent Compliance Certificate
delivered by Company to Administrative Agent pursuant to clause (iv) of
subsection 6.1; provided, however, that with respect to any period during
-------- -------
which a Permitted Acquisition occurs, for purposes of calculating the
Leverage Ratio under subsections 2.4A(iii)(d), the provisions of subsection
7.6D with respect to any cost savings that would otherwise be given effect
in calculating Consolidated Adjusted EBITDA as a result of such provisions
shall not be given effect until such cost savings are actually realized.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the
foregoing.
"LOAN" or "LOANS" means one or more of the Revolving Loans or Swing
Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guaranties, the Deposit Account
Agreement and the Collateral Documents.
"LOAN PARTY" means each of Holdings, General Partner, Company and any
of Holding's Subsidiaries from time to time executing a Loan Document, and
"LOAN PARTIES" means all such Persons, collectively.
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<PAGE>
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or
otherwise) of Holdings and its Subsidiaries, taken as a whole, or (ii) the
impairment of the ability of any Loan Party to perform, or of
Administrative Agent, Collateral Agent or Lenders to enforce, the
Obligations; provided that consummation of the Recapitalization
--------
Transactions in accordance with the terms of the Recapitalization Agreement
shall not be deemed to have a Material Adverse Effect for purposes of
subsection 5.4.
"MATERIAL CONTRACT" means any contract or arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to
renew would reasonably be expected to have a Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, however, that no Leasehold Property with respect to
--------
which the aggregate amount of all rents payable during any one Fiscal Year
never exceeds $1,000,000 shall be a "Material Leasehold Property".
"MATERIAL REAL PROPERTY ASSET" means a Real Property Asset reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, "Material Real Property Assets" shall not include
--------
any individual Real Property Asset that does not exceed $500,000 in fair
market value; provided, further that, Real Property Assets that do not
-------- -------
constitute Material Real Property Assets shall not exceed $3,000,000 in
aggregate fair market value.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit XVI annexed hereto
-----------
or in such other form as may be approved by Collateral Agent in its
reasonable discretion, in each case with such changes thereto as may be
recommended by Collateral Agent's local counsel based on local laws or
customary local mortgage or deed of trust practices, or (ii) at Collateral
Agent's option, in the case of an Additional Mortgaged Property, an
amendment to an existing Mortgage, in form reasonably satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the Real
Property Assets encumbered by such existing Mortgage, in either case as
such security instrument or amendment may be amended, supplemented or
otherwise modified from time to time. "MORTGAGES" means all such
instruments, including the Closing Date Mortgages and any Additional
Mortgages, collectively.
"MORTGAGED PROPERTY" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
26
<PAGE>
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means the National Association of Insurance Commissioners.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and
when so received) received from such Asset Sale, net of any bona fide costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of
such Asset Sale as a result of any gain recognized in connection with such
Asset Sale and (ii) payment of the outstanding principal amount of, premium
or penalty, if any, and interest on any Indebtedness (other than the Loans)
that is secured by a Lien on the stock or assets in question and that is
repaid as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Holdings or any of its Subsidiaries (i) under any
casualty insurance policy in respect of a covered loss thereunder or (ii)
as a result of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net
of any actual and documented costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims
of Holdings or such Subsidiary in respect thereof.
"NEW BUSINESS" means any assets or business acquired by Company or any
of its Subsidiaries in a Permitted Acquisition.
"NOTES" means one or more of the Revolving Notes or Swing Line Note or
any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent
---------
pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
----------
Administrative Agent pursuant to sub section 2.2D with respect to a
proposed conversion or continuation of the applicable basis for determining
the interest rate with respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice substantially
in the form of Exhibit III annexed hereto delivered by Company to
-----------
Administrative Agent pursuant to subsection 3.1B(i) with respect to the
proposed issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Agents, Lenders or their respective Affiliates or
any of them under the Loan
27
<PAGE>
Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate executed on behalf of such Person (x) if such Person is a
partnership, by the chairman of the board (if an officer) or chief
executive officer, chief operating officer, president or vice president or
by the chief financial officer of one of its partners and (y) if such
Person is a corporation, on behalf of such corporation by its chairman of
the board (if an officer), chief executive officer, chief operating officer
or its president or one of its vice presidents and, with respect to
financial matters only, by its principal financial officer or principal
accounting officer or its treasurer; provided that every Officers'
--------
Certificate with respect to the compliance with a condition precedent to
the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion
as to whether or not such condition has been complied with, and (iii) a
statement as to whether, in the opinion of the signers, such condition has
been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"ORDERLY LIQUIDATION VALUE" shall mean, as of any date of
determination and with respect to each item of Rental Equipment:
(i) for items of Rental Equipment owned by the Company as of the Closing
Date, an amount equal to the Initial Value from the Closing Date
through December 31, 1998 and thereafter an amount equal to (A) the
Orderly Liquidation Value of such item of Rental Equipment for the
preceding calendar year multiplied by (B) 1 minus Factor B specified
in Schedule 1.1(vii) corresponding to the current Equipment Year of
-----------------
such item of Rental Equipment;
(ii) for items of Rental Equipment acquired by the Company after the
Closing Date:
(a) during the calendar year in which such item of Rental Equipment
is acquired, the Initial Value of such item of Rental Equipment;
or
(b) in each subsequent calendar year, an amount equal to (A) the
Orderly Liquidation Value of such item of Rental Equipment for
the preceding calendar year multiplied by (B) 1 minus either
(x) Factor A if such item of Rental Equipment is not subject to
determination of Initial Value by an Independent Appraiser
pursuant to the provisions of Schedule 1.1(i), or
---------------
28
<PAGE>
(y) Factor B if such item of Rental Equipment is subject to
determination of Initial Value by an Independent Appraiser
pursuant to the provisions of Schedule 1.1(i),
---------------
(each of Factor A and Factor B as specified in Schedule 1.1(vii)
-----------------
and corresponding to the current Equipment Year of such item of
Rental Equipment);
provided that, the Orderly Liquidation Value of each item of Rental
--------
Equipment classified as a crawler crane, conventional truck crane, tower
crane or crane attachment (such classification to be made by an Independent
Appraiser) shall be the Initial Value of such Rental Equipment until the
date of delivery of the next Supplemental Appraisal, after which the
orderly liquidation value of such Rental Equipment shall be as specified in
the most recent Supplemental Appraisal.
"OTHER INVESTORS" means certain persons identified on Schedule
--------
1.1(iii) annexed hereto as Other Investors.
--------
"PARTNERSHIP AGREEMENTS" means limited partnership agreements of
Holdings and Company.
"PARTNERSHIP LOAN PARTY" means any Loan Party which is a general or
limited partnership.
"PARTS AND SUPPLIES INVENTORY" shall mean as of any date of
determination Company's or a Permitted Subsidiary's inventory (valued at
the lower of book value and market value) consisting of parts and supplies
(excluding fluids and de minimus amounts of other parts and supplies) being
used or reasonably expected to be used in the immediately succeeding twelve
months in connection with the Rental Equipment.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ACQUISITION" means the acquisition of assets or a business
effected in accordance with the provisions of subsection 7.7(xiii).
"PERMITTED DOMESTIC SUBSIDIARY" means (y) the Subsidiaries set forth
at Schedule 1.1(vi) and (z) any wholly-owned Subsidiary of Company which is
----------------
organized under the laws of the United States or any state thereof,
provided however that, all such Subsidiaries under this clause (z), in the
-------- -------
aggregate, shall not have been capitalized by Company in Cash or other
property, including equipment, in excess of 3% of the total assets of
Company and its Subsidiaries and provided further that, all the assets
-------- -------
thereof shall be subject to a First Priority Lien in favor of the
Collateral Agent, and the Collateral Agent shall
29
<PAGE>
be reasonably satisfied that such Liens are substantially similar in
respect of priority, enforceability and realization to those granted to
Collateral Agent by the Company.
"PERMITTED EARN-OUT AGREEMENTS" means any other agreement by Company
to pay the seller or sellers of any Person or assets acquired in accordance
with the provisions of subsection 7.7(xiii) at any time following the
consummation of such acquisition by reference to the financial performance
of the person or assets acquired; provided that, the Earnout Value (as
--------
defined in the definition of "Acquisition Consideration") under a Permitted
Earn-Out Agreement included for purposes of calculating Acquisition
Consideration for a Permitted Acquisition shall not exceed 15% of the
Acquisition Consideration under the related Permitted Acquisition.
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly
prohibited by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess
of 5 days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made
for any such contested amounts, and (2) in the case of a Lien with
respect to any portion of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral
on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long
as no foreclosure, sale or similar proceedings have been commenced
with respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of the Collateral Documents and not
interfering in any material
30
<PAGE>
respect with the ordinary conduct of the business of Holdings or any
of its Subsidiaries or resulting in a material diminution in the value
of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary
conduct of the business of Holdings or any of its Subsidiaries or
result in a material diminution in the value of any Collateral as
security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease (b) restriction or encumbrance that the interest or title of
such lessor or sublessor may be subject to, or (c) subordination of
the interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause (b), so
long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to operating leases or Capital Leases permitted by
this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of
any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries;
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Holdings or any of its Subsidiaries in the
ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of Holdings or such
Subsidiary; and
(xiii) Liens existing on the Closing Date and described in the
Closing Date Mortgage Policies or described on Schedule 7.2.
------------
"PERMITTED FOREIGN SUBSIDIARY" means any wholly-owned Subsidiary of
Company which is organized under the laws of Canada or a Caribbean
jurisdiction; provided however that, all such Subsidiaries, in the
-------- -------
aggregate, shall have not been capitalized by Company in Cash or other
property, including equipment, in excess of 3% of the total assets of
Company and its Subsidiaries; provided further that, all the assets thereof
-------- -------
shall be subject to a First Priority Lien in favor of the Collateral Agent,
and Collateral Agent shall be reasonably
31
<PAGE>
satisfied that such Liens are substantially similar in respect of priority,
enforceability and realization to those granted to Collateral Agent by the
Company.
"PERMITTED SALE LEASEBACK TRANSACTIONS" means one or more sale
leaseback transaction otherwise prohibited by subsection 7.9 so long as (i)
the assets sold in such transaction constitute Eligible Cranes and Lifting
Equipment and/or Eligible Trucks and Trailers, (iii) the aggregate sales
price of the assets sold in all such transactions in effect as of any date
of determination does not exceed 10% of total consolidated assets of
Company and its Subsidiaries as of such date, (iv) such assets are sold in
such transactions for Cash in an amount not less than their Orderly
Liquidation Value, and (v) within 180 days, the proceeds of such sale are
either reinvested by Company in Eligible Cranes and Lifting Equipment
and/or Eligible Trucks and Trailers or are applied to repay Loans.
"PERMITTED SELLER NOTE" means a promissory note containing
subordination provisions in substantially the form of, or no less favorable
to Lenders (in the reasonable judgment of Administrative Agent) than the
subordination provisions contained in, Exhibit XVIII annexed hereto,
-------------
representing any Indebtedness of Holdings or Company incurred in connection
with any Permitted Acquisition payable to the seller in connection
therewith, as such note may be amended, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.14B; provided
--------
that, no Permitted Seller Note shall (i) be guarantied by any Subsidiary of
Company or secured by any property of Holdings, Company or any of its
Subsidiaries, (ii) bear cash interest at a rate greater than 15% per annum;
or, (iii) provide for any prepayment or repayment of all or any portion of
the principal thereof prior to the date of the final scheduled installment
of principal of the Loans.
"PERMITTED SUBSIDIARIES" means Permitted Domestic Subsidiaries and
Permitted Foreign Subsidiaries.
"PERMITTED TAX DISTRIBUTION" means, for so long as Holdings or Company
is treated as a partnership or disregarded as an entity separate from its
owners for federal income tax purposes, distributions to the partners of
Holdings or Company in an amount with respect to any period after June 30,
1998, not to exceed the amount of distributions, whether paid or accrued,
necessary to permit Holdings' and Company's partners to pay federal and
state income tax liabilities arising from income of Holdings or Company and
their respective Subsidiaries and taxable to such partners, including the
tax distributions contemplated by Holdings' and Company's respective
partnership agreements attributable to such partners solely as a result of
Holdings or Company (and any intermediate entity through which any such
partner owns its interest in Holdings or Company) being a partnership or
similar pass-through entity for federal income tax purposes.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments
32
<PAGE>
(whether federal, state or local, domestic or foreign, and including
political subdivisions thereof) and agencies or other administrative or
regulatory bodies thereof.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement substantially in the form of Exhibit XIII annexed hereto, as such
------------
Pledge and Security Agreement may be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"PLEDGED COLLATERAL" means, collectively, the "Pledged Collateral" as
defined in the Pledge and Security Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PREFERRED UNITS" means preferred interests of Holdings with an
initial liquidation value of $22,500,000, which were initially issued to
Anthony Iron and Metal Company pursuant to the Recapitalization
Transactions.
"PROPOSED INSURANCE REINVESTMENT PROCEEDS" has the meaning assigned to
that term in subsection 6.4C.
"PRO RATA SHARE" means for all purposes hereunder with respect to each
Lender, the percentage obtained by dividing (x) the Revolving Loan Exposure
--------
of that Lender by (y) the aggregate Revolving Loan Exposure of all Lenders,
--
in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata
Share of each Lender for purposes of each of the preceding sentence is set
forth opposite the name of that Lender in Schedule 2.1 annexed hereto.
------------
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary in order to
create or perfect Liens on any IP Collateral.
"QUALIFIED PREFERRED UNITS" means payment-in-kind preferred units of
Holdings that have no cash-call or cash payment provision exercisable
during the term of the Loans or the Term Loan (other than Qualified
Preferred Units referred to in subsection 7.1(viii)).
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"RECAPITALIZATION AGREEMENT" means that certain Amended and Restated
Recapitalization Agreement dated as of July 21, 1998, by and among Company,
Bain/ACR L.L.C. and ACR Management L.L.C., in the form delivered to Agents
and Lenders prior to their execution of this Agreement and as such
agreement may be amended from time to time thereafter to the extent
permitted under subsection 7.14A.
33
<PAGE>
"RECAPITALIZATION FINANCING REQUIREMENTS" means the aggregate of all
amounts necessary to finance the Recapitalization Transactions.
"RECAPITALIZATION REVOLVING LOANS" has the meaning assigned to that
term in sub section 2.5A.
"RECAPITALIZATION TRANSACTIONS" means the series of transactions
described in Schedule 1.1(iv) annexed hereto.
----------------
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Administrative Agent's reasonable
judgment, to give constructive notice of such Leasehold Property to third-
party purchasers and encumbrancers of the affected real property. For
purposes of this definition, the term "RECORD DOCUMENT" means, with respect
to any Leasehold Property, (a) the lease evidencing such Leasehold Property
or a memorandum thereof, executed and acknowledged by the owner of the
affected real property, as lessor, or (b) if such Leasehold Property was
acquired or subleased from the holder of a Recorded Leasehold Interest, the
applicable assignment or sublease document, executed and acknowledged by
such holder, in each case in form sufficient to give such constructive
notice upon recordation and otherwise in form reasonably satisfactory to
Administrative Agent.
"REFERENCE LENDERS" means Fleet, and not more than two other Lenders
selected by Fleet with the consent of Company.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection tion 2.1A(ii).
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means, collectively, the Recapitalization
Agreement, the Securityholders Agreement, the Bain Advisory Services
Agreement, the Partnership Agreements, the Senior Notes, the Senior Note
Indenture, the Senior Discount Debentures and the Senior Discount
Indenture.
"RELATED PARTY" means with respect to any Person, (i) any stockholder,
officer, employee or partner of such Person and (a) trusts for the benefit
of such Person or the spouses, issue, parents or other relatives of such
Person, (b) entities controlling or controlled by such Person and (c) in
the event of death of any such individual Person, heirs or testamentary
legatees of such Person and, in addition, with respect to Bain, shall
include the Bain Investors or (ii) any Affiliate thereof.
34
<PAGE>
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials),
including the migration of any Hazardous Materials through the air, soil,
surface water or groundwater.
"RENTAL EQUIPMENT" shall mean (i) all of the Cranes and Lifting
Equipment, and (ii) all of the Trucks and Trailers, that in each case, are
held for resale or held for lease by Company or a Permitted Subsidiary.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the aggregate Revolving Loan Exposure of all Lenders.
"RESPONSIBLE OFFICER" means any of the chairman of the board (if an
officer), the president, any senior or executive vice president, the
general counsel, its principal financial officer or principal accounting
officer, the secretary or the treasurer of Holdings or, as applicable, any
Subsidiary of Holdings.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock, partnership interest or equivalent equity interests of Holdings or
Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock, partnership interest or equivalent equity
interests to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock of Holdings or
Company now or hereafter outstanding, (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock of Holdings or Company now
or hereafter outstanding, and (iv) any cash payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated
Indebtedness or the Senior Notes.
"REVOLVER LEVERAGE RATIO" means the ratio of (i) average monthly
principal amount of Revolving Loans and Additional Secured Indebtedness
outstanding, less cash on hand as of the date of determination, for the
----
quarterly period ending on the last day of any Fiscal Quarter to (ii)
Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then ended,
in each case as set forth in the most recent Compliance Certificate
delivered by Company to Administrative Agent pursuant to clause (iv) of
subsection 6.1.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(i), and "REVOLVING
LOAN COMMITMENTS" means such commitments of all Lenders in the aggregate.
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"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earlier of (i)
July 22, 2004 or (ii) the date of termination in whole of the Revolving
Loan Commitments pursuant to subsection 2.4A or Section 8.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b)
----
in the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that Lender (in
each case net of any participations purchased by other Lenders in such
Letters of Credit or any unreimbursed drawings thereunder) plus (c) the
----
aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any
Letters of Credit plus (d) in the case of Swing Line Lender, the aggregate
----
outstanding principal amount of all Swing Line Loans (net of any
participations therein purchased by other Lenders) plus (e) the aggregate
----
amount of all participations purchased by that Lender in any outstanding
Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(i).
"REVOLVING NOTES" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Revolving Loans of any Lenders,
substantially in the form of Exhibit IV annexed hereto, as they may be
----------
amended, supplemented or otherwise modified from time to time.
"SECURED PARTIES" has the meaning assigned to that term in the
Intercreditor Agreement.
"SECURITIES" means any stock, shares, partnership interests,
membership interests, voting trust certificates, certificates of interest
or participation in any profit-sharing agreement or arrangement, options,
warrants, bonds, debentures, notes, or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for
the purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SECURITYHOLDERS AGREEMENT" means that certain securityholders
agreement among the General Partner, Holdings and various equityholders of
such entities as amended, modified and supplemented from time to time to
the extent permitted under subsection 7.14.
"SENIOR DISCOUNT DEBENTURES" means at least $25,000,000 in initial
aggregate principal amount of Senior Discount Debentures of Holdings and
Anthony Crane Holdings
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Capital Corporation issued pursuant to the Senior Discount Indenture, as
amended from time to time as permitted pursuant to subsection 7.14.
"SENIOR DISCOUNT INDENTURE" means the indenture pursuant to which the
Senior Discount Debentures are issued, as such indenture may be amended
from time to time to the extent permitted under subsection 7.14.
"SENIOR NOTE INDENTURE" means the indenture pursuant to which the
Senior Notes are issued, as such indenture may be amended from time to time
to the extent permitted under subsection 7.14.
"SENIOR NOTES" means the $155,000,000 in aggregate principal amount of
Senior Notes due July, 2008 of Company and Anthony Crane Capital
Corporation issued pursuant to the Senior Note Indenture, including any
notes issued in exchange for such notes as contemplated under the Senior
Note Indenture, as amended from time to time as permitted pursuant to
subsection 7.14.
"SHAREHOLDER SUBORDINATED NOTE" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in
any way by Company or any of its Subsidiaries) containing subordination
provisions substantially in the form of, or no less favorable to Lenders
(in the reasonable judgment of Administrative Agent) than the subordination
provisions contained in Exhibit XVIII annexed hereto, as such note may be
-------------
amended, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.14.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property
(sold as a going concern) of such Person is (y) greater than the total
amount of liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become absolute
and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (ii) such Person's capital is
not unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (iii) such Person does not intend to incur, or
believe (nor should it reasonably believe) that it will incur, debts beyond
its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under
applicable laws relating to fraudulent transfers and conveyances. For
purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of 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 standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Holdings or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Holdings or any of its Subsidiaries, (iii) the obligations of third party
insurers of Holdings or any of its Subsidiaries arising by virtue of the
laws of any
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jurisdiction requiring third party insurers, (iv) obligations with respect
to Capital Leases or Operating Leases of Holdings or any of its
Subsidiaries, (v) performance, payment, deposit or surety obligations of
Holdings or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice
in the industry, and (vi) such other obligations of Company and its
Subsidiaries as are reasonably acceptable to Administrative Agent and the
Issuing Lender and otherwise permitted to exist pursuant to the terms of
this Agreement; provided that Standby Letters of Credit may not be issued
--------
for the purpose of supporting (a) trade payables or (b) any Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code).
"SUBORDINATED INDEBTEDNESS" means (i) any Permitted Seller Notes, (ii)
any Shareholder Subordinated Notes, and (iii) any other Indebtedness of
Holdings, or any of its Subsidiaries, subordinated in right of payment to
the Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance reasonably
satisfactory to Administrative Agent and Requisite Lenders.
"SUBSIDIARY" with respect to any Person means any corporation,
partnership or limited liability company, the financial statements of which
are consolidated with the financial statements of such Person for GAAP
financial reporting purposes. The term "Subsidiary", when used herein
without reference to any particular Person, shall mean a Subsidiary of the
Company.
"SUBSIDIARY GUARANTOR" means any Subsidiary of Holdings, other than
Company and Excluded Subsidiaries, that executes and delivers a counterpart
of the Subsidiary Guaranty on the Closing Date or from time to time
thereafter pursuant to subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by all Subsidiaries of Holdings (other than Company and the
Excluded Subsidiaries) on the Closing Date and to be executed and delivered
by additional Subsidiaries of Holdings from time to time thereafter in
accordance with subsection 6.8, substantially in the form of Exhibit XIV
-----------
annexed hereto, as such Subsidiary Guaranty may hereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"SUPPLEMENTAL APPRAISAL" shall mean a desktop appraisal conducted each
calendar year (commencing calendar year 1999) to determine the Orderly
Liquidation Value of the Company's Rental Equipment classified as crawler
cranes, conventional truck cranes, tower cranes and crane attachments (such
classification to be made by the Independent Appraiser) prepared by the
Independent Appraiser.
"SWING LINE LENDER" means Fleet, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(ii).
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"SWING LINE LOANS" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(ii).
"SWING LINE NOTE" means any promissory note of Company issued pursuant
to subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender,
substantially in the form of Exhibit V annexed hereto, as it may be
---------
amended, supplemented or otherwise modified from time to time.
"SYNDICATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person
--------
shall be construed as a reference to a tax imposed by the jurisdiction in
which that Person is organized or in which that Person's principal office
(and/or, in the case of a Lender, its lending office) is located or in
which that Person (and/or, in the case of a Lender, its lending office) is
deemed to be doing business on all or part of the net income, profits or
gains (whether worldwide, or only insofar as such income, profits or gains
are considered to arise in or to relate to a particular jurisdiction, or
otherwise) of that Person (and/or, in the case of a Lender, its lending
office).
"TERM LOAN CREDIT AGREEMENT" means that certain Term Loan Credit
Agreement of even date herewith, by and among Company, Holdings, GSCP, as
Arranger and Syndication Agent, DLJ, as Documentation Agent and Fleet, as
Administrative Agent and Collateral Agent, as such Term Loan Credit
Agreement may be amended, supplemented, refinanced, renewed, extended or
otherwise modified from time to time to the extent permitted under
subsection 7.14C.
"TERM LOAN CREDIT DOCUMENTS" means the Term Loan Credit Agreement, the
promissory notes issued thereunder and each other document executed in
connection with the Term Loan Credit Agreement.
"TERM LOANS" means the second priority secured term loans of Company
outstanding pursuant to the Term Loan Credit Agreement in the original
principal amount of $50,000,000.
"TITLE COMPANY" means, collectively, First American Title Insurance
Company and/or one or more other title insurance companies reasonably
satisfactory to Syndication Agent and Administrative Agent.
"TOTAL LEVERAGE RATIO" means the ratio of (i) average monthly
outstanding principal amount of Consolidated Total Debt, less cash on hand
----
as of the date of determination, for the quarterly period ending on the
last day of any Fiscal Quarter to (ii) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period then ended, in each case as set forth in the
most recent Compliance Certificate delivered by Company to
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Administrative Agent pursuant to clause (iv) of subsection 6.1; provided,
--------
however, that with respect to any period during which a Permitted
-------
Acquisition occurs, for purposes of calculating the Total Leverage Ratio in
the definition of Applicable Total Leverage Ratio, the provisions of
subsection 7.6D with respect to any cost savings that would otherwise be
given effect in calculating Consolidated Adjusted EBITDA as a result of
such provisions shall not be given effect until such cost savings are
actually realized.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
----
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
----
"TRANSACTION COSTS" means the fees, costs, premiums, penalties and
expenses payable by Holdings and Company in connection with the
transactions contemplated by the Loan Documents, the Term Loan Credit
Documents and the Related Agreements.
"TRUCKS AND TRAILERS" shall mean each item of equipment that is owned
by the Company or its Permitted Subsidiaries that constitutes any of the
following: a forklift, a truck, a trailer or any other miscellaneous
equipment, other than Cranes and Lifting Equipment (such miscellaneous
equipment used by the Company or its Permitted Subsidiaries in the
provision of crane rental and lifting services and subject to the approval
of the Administrative Agent, such approval not to be unreasonably withheld,
prior to inclusion in the definition of Eligible Trucks and Trailers);
including, without limitation, those items identified on Schedule 2.1(d)(B)
to the Pledge and Security Agreement.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"WHOLLY-OWNED" means, with respect to any Subsidiary, that all of the
equity Securities (other than any such security in the nature of a
director's qualifying share) of such Subsidiary are owned by another Person
or one or more wholly-owned Subsidiaries of such other Person; provided,
--------
any Subsidiary that is a limited partnership shall be deemed to be wholly-
owned by another Person so long as such other Person and its wholly-owned
Subsidiaries owns all of the limited partnership interests of such
Subsidiary.
"YEAR 2000 COMPLIANT" means that by December 31, 1998 all computer
applications owned and controlled by Holdings or any of its Subsidiaries
that are material to Holdings and its Subsidiaries' business and operations
will be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000, except to the extent that a failure to do
so could not reasonably be expected to have a Material Adverse Effect.
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1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
------------------------------------------------------------------------
AGREEMENT.
---------
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
December 31, 1997 financial statements referred to in subsection 5.3.
Notwithstanding the foregoing, except as otherwise specifically provided herein,
all computations determining compliance with subsection 2.4 and Section 7, and
the calculation of the Total Leverage Ratio, the Leverage Ratio and Revolving
Leverage Ratio for all purposes set forth herein, in each case, including the
definitions used therein, shall utilize accounting principles and policies in
effect at the time of the preparation of, and in conformity with those used to
prepare, the December 31, 1997 financial statements of Holdings and its
Subsidiaries delivered to the Lenders, but shall not give effect to purchase
accounting adjustments required or permitted by APB 16 and its interpretations
(including non-cash write-ups and non-cash charges relating to inventory, fixed
assets and in-process research and development, in each case arising in
connection with any Permitted Acquisitions) and APB 17 and its interpretations
(including non-cash charges relating to intangibles and goodwill arising in
connection with any Permitted Acquisitions).
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
-------------------------------------------------------
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
D. Each reference to a "Fiscal Quarter period" of a specified number of
Fiscal Quarters shall be a reference to a period of consecutive Fiscal Quarters
of such number.
1.4 CHANGES IN GAAP.
---------------
In the event that a change in GAAP or other accounting principles and
policies after the date hereof affects in any material respect the calculations
of the compliance by Holdings and its Subsidiaries with the covenants contained
herein, Lenders, Company and Holdings agree to
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negotiate in good faith to amend the affected covenants (and related
definitions) to compensate for the effect of such changes so that the
restrictions, limitations and performance standards effectively imposed by such
covenants, as so amended, are substantially identical to the restrictions,
limitations and performance standards imposed by such covenants as in effect on
the date hereof; provided, that if Requisite Lenders, Company and Holdings fail
--------
to reach agreement with respect to such amendment within a reasonable period of
time following the date of effectiveness of any such change, calculation of
compliance by Holdings and its Subsidiaries with the covenants contained herein
shall be determined in accordance with GAAP as in effect immediately prior to
such change.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
-------------------------------------------------
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Holdings and Company
herein set forth, each Lender hereby severally agrees to make the Loans
described in subsections 2.1A(i) and Swing Line Lender hereby agrees to make the
Loans described in subsection 2.1A(ii).
(i) Revolving Loans. Each Lender severally agrees, subject to the
---------------
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Company
from time to time during the period from the Closing Date to but excluding
the Revolving Loan Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5. The
original amount of each Lender's Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate original
------------
amount of the Revolving Loan Commitments is $275,000,000; provided that,
--------
the Revolving Loan Commitments of Lenders shall be adjusted to give effect
to any assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further, that the amount of the Revolving Loan
-------- -------
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4A(ii). Each Lender's
Revolving Loan Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than the Revolving Loan
Commitment Termination Date. Amounts borrowed under this subsection
2.1A(i) may be repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding
in no event shall the Total Utilization of Revolving Loan Commitments at
any time exceed the lesser of (y) the Revolving Loan Commitments then in
effect and (z) the Adjusted Borrowing Base Amount then in effect.
(ii Swing Line Loans. Swing Line Lender hereby agrees, subject to
----------------
the limitations set forth below with respect to the maximum amount of Swing
Line Loans
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permitted to be outstanding from time to time, to make a portion of the
Revolving Loan Commitments available to Company from time to time during
the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date by making Swing Line Loans to Company in an
aggregate amount not exceeding the amount of the Swing Line Loan Commitment
to be used for the purposes identified in subsection 2.5, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving Loan Commitment. The original amount of the Swing Line
Loan Commitment is $15,000,000; provided that any reduction of the
--------
Revolving Loan Commitments made pursuant to subsection 2.4A(ii) which
reduces the aggregate Revolving Loan Commitments to an amount less than the
then current amount of the Swing Line Loan Commitment shall result in an
automatic corresponding reduction of the Swing Line Loan Commitment to the
amount of the Revolving Loan Commitments, as so reduced, without any
further action on the part of Company, Administrative Agent or Swing Line
Lender. The Swing Line Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Swing Line Loans and all other amounts
owed hereunder with respect to the Swing Line Loans shall be paid in full
no later than that date. Amounts borrowed under this subsection 2.1A(ii)
may be repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4A(ii), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 11:00 A.M. (New York City
time) on the first Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Borrowing given by Company)
requesting Lenders to make Revolving Loans that are Base Rate Loans on such
Funding Date in an amount equal to the amount of such Swing Line Loans (the
"REFUNDED SWING LINE LOANS") outstanding on the date such notice is given
which Swing Line Lender requests Lenders to prepay. Anything contained in
this Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and not
to Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Revolving Loans are made, Swing
Line Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender, and such portion of the Swing Line Loans deemed to be so paid shall
no longer be outstanding as Swing Line Loans and shall no longer be due
under the Swing Line Note, if any, of Swing Line Lender but shall instead
constitute part of Swing Line Lender's outstanding Revolving Loans and
shall be due under the Revolving Note, if any, of Swing Line Lender.
Company hereby authorizes Administrative Agent and Swing Line Lender to
charge Company's accounts with Administrative Agent and Swing Line Lender
(up to the amount available in each such account) in order to immediately
pay Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not sufficient
to repay in full the Refunded Swing Line Loans. If any portion of any such
amount paid (or deemed to be paid) to Swing Line Lender should be recovered
by or on behalf of Company from
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Swing Line Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably shared
among all Lenders in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect
of any outstanding Swing Line Loans or (b) the Revolving Loan Commitments
are terminated at a time when any Swing Line Loans are outstanding, each
Lender shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans in an amount equal to
its Pro Rata Share (calculated, in the case of the foregoing clause (b),
immediately prior to such termination of the Revolving Loan Commitments) of
the unpaid amount of such Swing Line Loans together with accrued interest
thereon. Upon one Business Day's notice from Swing Line Lender, each
Lender shall deliver to Swing Line Lender an amount equal to its respective
participation in same day funds at the Funding and Payment Office. In the
event any Lender fails to make available to Swing Line Lender the amount of
such Lender's participation as provided in this paragraph, Swing Line
Lender shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the rate customarily used by Swing Line
Lender for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. In the event Swing Line Lender receives a
payment of any amount in which other Lenders have purchased participations
as provided in this paragraph, Swing Line Lender shall promptly distribute
to each such other Lender its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and
each Lender's obligation to purchase a participation in any unpaid Swing
Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender, Company or any other
Person for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse change in
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Holdings or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party thereto;
or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided that such obligations of each
--------
Lender are subject to the condition that (X) Swing Line Lender believed in
good faith that all conditions under Section 4 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, as
the case may be, were satisfied at the time such Refunded Swing Line Loans
or unpaid Swing Line Loans were made or (Y) the satisfaction of any such
condition not satisfied had been waived in accordance with subsection 10.6
prior to or at the time such Refunded Swing Line Loans or other unpaid
Swing Line Loans were made.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date (other
than Revolving Loans made pursuant to a request by Swing Line Lender pursuant to
subsection 2.1A(ii)
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for the purpose of repaying any Refunded Swing Line Loans or Revolving Loans
made pursuant to subsection 3.3B for the purpose of reimbursing any Issuing
Lender for the amount of a drawing under a Letter of Credit issued by it) shall
be in an aggregate minimum amount of $500,000 and integral multiples of $100,000
in excess of that amount; provided that Revolving Loans made on any Funding Date
--------
as Eurodollar Rate Loans with a particular Interest Period shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of $50,000 in
excess of that amount. Swing Line Loans made on any Funding Date shall be in an
aggregate minimum amount of $100,000 and integral multiples of $100,000 in
excess of that amount. Whenever Company desires that Lenders make Revolving
Loans it shall deliver to Administrative Agent a Notice of Borrowing no later
than 12:00 Noon (New York City time) at least three Business Days in advance of
the proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least
one Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line
Loan, it shall deliver to Administrative Agent a Notice of Borrowing no later
than 12:00 Noon (New York City time) on the proposed Funding Date. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount and type of Loans requested, (iii) in the case of Swing
Line Loans, that such Loans shall be Base Rate Loans, (iv) in the case of any
Revolving Loans, whether such Loans shall be Base Rate Loans or Eurodollar Rate
Loans, (v) in the case of any Loans requested to be made as Eurodollar Rate
Loans, the initial Interest Period requested therefor and, (vi) that, after
giving effect to the Loans requested thereby, the Total Utilization of Revolving
Loan Commitments will not exceed the lesser of (y) the Revolving Loan
Commitments then in effect and (z) the Adjusted Borrowing Base Amount then in
effect. Revolving Loans may be continued as or converted into Base Rate Loans
and Eurodollar Rate Loans in the manner provided in subsection 2.2D. In lieu of
delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
--------
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
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C. DISBURSEMENT OF FUNDS. All Revolving Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being under stood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative Agent of a Notice
of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender or Swing Line Lender, as the case
may be, of the proposed borrowing. Each Lender shall make the amount of its
Loan available to Administrative Agent not later than 1:00 P.M. (New York City
time) on the applicable Funding Date, and Swing Line Lender shall make the
amount of its Swing Line Loan available to Administrative Agent not later than
2:00 P.M. (New York City time) on the applicable Funding Date, in each case in
same day funds in Dollars, at the Funding and Payment Office. Except as
provided in subsection 2.1A(ii) or subsection 3.3B with respect to Revolving
Loans used to repay Refunded Swing Line Loans or to reimburse any Issuing Lender
for the amount of a drawing under a Letter of Credit issued by it, upon
satisfaction or waiver of the conditions precedent specified in subsections 4.1
(in the case of Loans made on the Closing Date) and 4.2 (in the case of all
Loans), Administrative Agent shall make the proceeds of such Loans available to
Company on the applicable Funding Date by causing an amount of same day funds in
Dollars equal to the proceeds of all such Loans received by Administrative Agent
from Lenders or Swing Line Lender, as the case may be, to be credited to the
account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from time
to time (the "REGISTER"). The Register
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<PAGE>
shall be available for inspection by Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Revolving
Loan Commitment and the Revolving Loans from time to time of each Lender,
the Swing Line Loan Commitment and the Swing Line Loans from time to time
of Swing Line Lender, and each repayment or prepayment in respect of the
principal amount of the Revolving Loans of each Lender or the Swing Line
Loans of Swing Line Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided that
--------
failure to make any such recordation, or any error in such recordation,
shall not affect any Lender's Commitments or Company's Obligations in
respect of any applicable Loans.
(ii) Each Lender shall record on its internal records (including the
Notes held by such Lender) the amount of each Revolving Loan made by it and
each payment in respect thereof. Any such recordation shall be conclusive
and binding on Company, absent manifest error; provided that, failure to
--------
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of any
applicable Loans; and provided, further that, in the event of any
-------- -------
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern and be conclusive and binding on
such Lender, absent manifest error.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v) Company hereby designates Fleet (or such Person who may serve
as Successor Administrative Agent) to serve as Company's agent solely for
purposes of maintaining the Register as provided in this subsection 2.1D,
and Company hereby agrees that, to the extent Fleet (or such Person who may
serve as Successor Administrative Agent) serves in such capacity, Fleet and
its officers, directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 10.3.
E. OPTIONAL NOTES. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date or at any time thereafter, Company shall execute and deliver
to such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to subsection 10.1) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company's receipt of such notice) a promissory note or promissory notes to
evidence such Lender's
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<PAGE>
Revolving Loans or Swing Line Loans, substantially in the form of Exhibit IV or
----------
Exhibit V annexed hereto, respectively, with appropriate insertions.
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2.2 INTEREST ON THE LOANS.
---------------------
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Revolving Loan shall bear interest on the unpaid principal amount
thereof from the date made through but excluding the date of maturity (whether
by acceleration or otherwise) at a rate determined by reference to the Base Rate
or the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7,
each Swing Line Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Base Rate. The applicable basis for
determining the rate of interest with respect to any Revolving Loan shall be
selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B. The basis for determining the
interest rate with respect to any Revolving Loan may be changed from time to
time pursuant to subsection 2.2D. If on any day a Revolving Loan is outstanding
with respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Revolving Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
----
the Applicable Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
----
(ii) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Base Rate
plus the Applicable Base Rate Margin.
----
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
-----------------
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, a one-, two-, three- or six-month period or, if
deposits in the interbank Eurodollar market are generally available for such
period (as determined by each Lender making, converting to or continuing such
Eurodollar Rate Loan), a twelve-month period; provided that:
--------
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
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<PAGE>
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
of Conversion/Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Revolving
Loans shall extend beyond the Revolving Loan Commitment Termination Date;
(vi) if requested by Syndication Agent, Company shall not select an
Interest Period of longer than one month prior to the end of the Initial
Period;
(vii) there shall be no more than twelve (12) Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to but excluding each
Interest Payment Date applicable to that Loan, upon any prepayment of that Loan
(to the extent accrued on the amount being prepaid) and at maturity (including
final maturity); provided that in the event any Swing Line Loans or any
--------
Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection
2.4A, interest accrued on such Swing Line Loans or Revolving Loans through the
date of such prepayment shall be payable on the next succeeding Interest Payment
Date applicable to Base Rate Loans (or, if earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Revolving Loans equal to $500,000 and integral multiples of
$100,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that
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<PAGE>
Loans may not be continued as or converted to Eurodollar Rate Loans with an
Interest Period longer than one month prior to the end of the Initial Period.
Company shall deliver a Notice of Conversion/Continuation at any time after
the Closing Date to Administrative Agent no later than 12:00 Noon (New York City
time) at least one Business Day in advance of the proposed conversion date (in
the case of a conversion to a Base Rate Loan) and at least three Business Days
in advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). A Notice of
Conversion/ Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation,
(iv) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, the requested Interest Period, and (v) in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan, that no Potential Event of Default or
Event of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, Company may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/ continuation under this subsection 2.2D; provided that such notice
--------
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/ Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. POST-MATURITY INTEREST. Any principal payments on the Loans not paid
when due and, to the extent permitted by applicable law, any interest payments
on the Loans or any fees arising pursuant to subsection 2.3 owed hereunder not
paid when due, in each case whether at stated maturity, by notice of prepayment,
by acceleration or otherwise, shall, if Requisite Lenders so elect in writing,
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate which is 2% per annum in excess of the interest rate otherwise payable
at maturity under this Agreement with respect to the applicable Loans (or, in
the case of any such fees at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Base Rate Loans);
provided that, in the case of overdue Eurodollar Rate Loans, upon the expiration
- --------
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is
50
<PAGE>
2% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans. Payment or acceptance of the increased rates of
interest provided for in this subsection 2.2E is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
--------
day on which it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
----
A. COMMITMENT FEES. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the Total Utilization of
Revolving Loan Commitments less outstanding Swingline Loans (other than, with
----
respect to Swingline Lender, the Swingline Lenders Pro Rata Share of the
Swingline Loans) multiplied by the Applicable Commitment Fee Percentage, such
-------------
commitment fees to be calculated on the basis of a 360-day year and the actual
number of days elapsed and to be payable quarterly in arrears on March 15, June
15, September 15 and December 15 of each year, commencing on the first such date
to occur after the Closing Date, and on the Revolving Loan Commitment
Termination Date.
B. OTHER FEES. Company agrees to pay to Agents such fees in the amounts
and at the times separately agreed upon between Company and each Agent.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
---------------------------------------------------------------------
GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
-----------------------------------------------------------------
COLLATERAL AND PAYMENTS UNDER GUARANTIES.
----------------------------------------
A. PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon written or telephonic
---------------------
notice to Administrative Agent on or prior to 12:00 Noon (New York City
time) on the date of prepayment, which notice, if telephonic, shall be
promptly confirmed in writing, at any time and from time to time prepay any
Swing Line Loan on any Business Day in whole or in part
51
<PAGE>
in an aggregate minimum amount of $500,000 and integral multiples of
$100,000 in excess of that amount. Company may, upon written or telephonic
notice on the date of prepayment, in the case of Base Rate Loans, and three
Business Days' prior written or telephonic notice, in the case of
Eurodollar Rate Loans, in each case given to Administrative Agent by 12:00
Noon (New York City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time prepay any Revolving Loans on any Business Day in whole or in part in
an aggregate minimum amount of $500,000 and integral multiples of $100,000
in excess of that amount. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company may,
--------------------------------------------------
upon not less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction after giving effect to any concurrent repayment of Loans and
Letter of Credit; provided that any such partial reduction of the Revolving
--------
Loan Commitments shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount. Company's
notice to Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(ii) Mandatory Prepayments. The Loans shall be prepaid in the amounts
---------------------
and under the circumstances set forth below, all such prepayments to be
applied as set forth below or as more specifically provided in subsection
2.4A(iv).
(a) Prepayments From Net Asset Sale Proceeds. No later than the
----------------------------------------
fifth Business Day following the date of receipt by Company or any of
its Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale, Company shall prepay the Loans in an aggregate amount
equal to such Net Asset Sale Proceeds. Notwithstanding the foregoing,
the Net Asset Sale Proceeds shall not be required to repay Loans as
set forth above, to the extent that and so long as such Net Asset Sale
Proceeds are within 365 days of receipt of such proceeds, reinvested
(or a contract entered into with respect to such reinvestment) in the
business of the Company and its Subsidiaries. If Company is otherwise
required to apply any portion of Net Asset Sale Proceeds to prepay
Indebtedness evidenced by the Term Loans or the Senior Notes then,
notwithstanding anything contained in this Agreement to the contrary,
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<PAGE>
Company shall apply such Net Asset Sale Proceeds to the prepayment of
the Loans so as to eliminate or minimize any obligation to prepay the
Term Loans or the Senior Notes.
(b) Prepayments from Net Insurance/Condemnation Proceeds. No
----------------------------------------------------
later than the tenth Business Day following the date of receipt by
Administrative Agent or by Company or any of its Subsidiaries of any
Net Insurance/Condemnation Proceeds that are required to be applied to
prepay the Loans pursuant to the provisions of subsection 6.4C,
Company shall prepay the Loans in an aggregate amount equal to the
amount of such Net Insurance/Condemnation Proceeds minus (if (1) no
-----
Event of Default shall have occurred and be continuing and (2) Company
shall have delivered to Administrative Agent, on or before such tenth
Business Day, the Officers' Certificate described in subsection 6.4C),
any Proposed Insurance Reinvestment Proceeds; provided, that at
--------
Company's option, such Proposed Insurance Reinvestment Proceeds may be
applied to prepay outstanding Revolving Loans to the full extent
thereof. In addition, no later than 365 days after receipt of any
Proposed Insurance Reinvestment Proceeds, Company shall prepay the
Loans in an amount equal to the amount of any such Proposed Insurance
Reinvestment Proceeds that have not theretofore been applied to the
costs of repairing, restoring or replacing the applicable assets of
Company or its Subsidiaries or reinvested in assets used in the
ordinary course of business; provided further that, Company shall not
-------- -------
be required to make any prepayment of the Loans to the extent that Net
Insurance/Condemnation Proceeds during any Fiscal Year does not exceed
2% of consolidated total assets of Company.
(c) Prepayments Due to Issuance of Debt. On the date of receipt
-----------------------------------
by Holdings, Company or any of their respective Subsidiaries of the
Cash proceeds of any Indebtedness, including debt Securities of
Holdings, Company or any of their respective Subsidiaries (other than
the Loans and any other Indebtedness permitted under subsections 7.1
(such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being the "NET INDEBTEDNESS
PROCEEDS")), Company shall prepay the Loans in an aggregate amount
equal to such Net Indebtedness Proceeds; provided, however, that
-------- -------
payment or acceptance of the amounts provided for in this subsection
2.4A(iii)(c) shall not constitute a waiver of any Event of Default
resulting from the incurrence of such Indebtedness or otherwise
prejudice any rights or remedies of Agents or Lenders. If Company is
otherwise required to apply any portion of Net Indebtedness Proceeds
to prepay Indebtedness evidenced by the Term Loans or the Senior Notes
then, notwithstanding anything contained in this Agreement to the
contrary, Company shall apply such Net Indebtedness Proceeds to the
prepayment of the Loans so as to eliminate or minimize any obligation
to prepay the Term Loans or the Senior Notes.
(d) Prepayments Due to Issuance of Equity Securities. On the
------------------------------------------------
date of receipt by Holdings or Company of Cash proceeds (any such
proceeds, net of under writing discounts and commissions and other
reasonable costs and expenses
53
<PAGE>
associated therewith, including reasonable legal fees and expenses,
being "NET EQUITY PROCEEDS") from the issuance of any equity
Securities of Holdings or Company after the Closing Date (other than
(A) capital contributions by Holdings to Company or any other
Subsidiary, (B) issuances of Securities to the General Partner or
Holdings by the Company, or (C) issuances of Holdings Common Units,
Preferred Units or Qualified Preferred Units (x) to employees,
officers, directors and consultants of Holdings and its Subsidiaries
in the ordinary course of business in connection with their employment
by Holdings, Company or its Subsidiaries and (y) to Bain Investors,
the Other Investors, the Existing Investors and their Related Parties
to the extent the Cash proceeds thereof are not in excess of
$25,000,000 and (z) as payment of all or any portion of the purchase
price of a business or assets in a Permitted Acquisition), Company
shall prepay the Loans in an aggregate amount equal to: (i) 50% (or,
if the Leverage Ratio is not more than 3.5 to 1.0 on the date such Net
Equity Proceeds are received, no such payment shall be made) of such
Net Equity Proceeds if such Net Equity Proceeds are derived from a
non-public sale of equity Securities or partnership interests of
Holdings or Company or (ii) 75% (or, if the Leverage Ratio is not more
than 3.5 to 1.0 on the date such Net Equity Proceeds are received, no
such payment shall be made) of such Net Equity Proceeds if such Net
Equity Proceeds are derived from the sale of equity Securities or
partnership interests of Holdings or Company through a public
offering. If Company is otherwise required to apply any portion of Net
Equity Proceeds to prepay Indebtedness evidenced by the Term Loans or
the Senior Notes then, notwithstanding anything contained in this
Agreement to the contrary, Company shall apply such Net Equity
Proceeds to the prepayment of the Revolving Loans so as to eliminate
or minimize any obligation to prepay the Term Loans or the Senior
Notes.
(e) Calculations of Net Proceeds Amounts; Additional Prepayments
------------------------------------------------------------
and Reductions Based on Subsequent Calculations. Concurrently with any
-----------------------------------------------
prepayment of the Loans pursuant to subsections 2.4A(iii)(a)-(d), Company
shall deliver to Administrative Agent an Officers' Certificate
demonstrating the calculation of the amount (the "NET PROCEEDS AMOUNT") of
the applicable Net Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds, Net Indebtedness Proceeds or Net Equity Proceeds (as such terms
are defined in subsections 2.4A(iii)(a), (b), (c) and (d), respectively),
as the case may be, that gave rise to such prepayment. In the event that
Company shall subsequently determine that the actual Net Proceeds Amount
was greater than the amount set forth in such Officers' Certificate,
Company shall promptly make an additional prepayment of the Loans in an
amount equal to the amount of such excess, and Company shall concurrently
therewith deliver to Administrative Agent an Officers' Certificate
demonstrating the derivation of the additional Net Proceeds Amount
resulting in such excess.
(f) Prepayments Relating to the Borrowing Base. Company shall
------------------------------------------
from time to time prior to the Revolving Loan Commitment Termination Date,
prepay Revolving Loans and Swing Line Loans (and after all Loans have been
repaid, deposit in a collateral account same day funds in an amount equal
to the Letter of
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Credit Usage until such time as the Letters of Credit shall have been
terminated and the Letter of Credit Usage has been reduced to zero or until
no payment is otherwise required under this clause (f)) in such amounts as
shall be necessary so that at all times the Total Utilization of Revolving
Loan Commitments shall not exceed the Adjusted Borrowing Base Amount then
in effect.
(g) Prepayments Due to Restrictions of Revolving Loan
-------------------------------------------------
Commitments. Company shall from time to time prepay first the Swing
-----
Line Loans and second the Revolving Loans to the extent necessary so
------
that the Total Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
--------------------------
(a) Application of Voluntary Prepayments by Type of Loans and
---------------------------------------------------------
Order of Maturity. Any voluntary prepayments pursuant to subsection
-----------------
2.4A(i) shall be applied as specified by Company in the applicable
notice of prepayment; provided that in the event Company fails to
--------
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding Swing Line
-----
Loans to the full extent thereof and second to repay outstanding
------
Revolving Loans to the full extent thereof.
(b) Application of Mandatory Prepayments by Type of Loans. Any
-----------------------------------------------------
amount (the "APPLIED AMOUNT") required to be applied as a mandatory
prepayment of the Loans pursuant to subsections 2.4A(iii)(a)-(d),(e)
and (f) shall be applied first to prepay the Swing Line Loans to the
-----
full extent thereof and second to the extent of any remaining portion
------
of the Applied Amount, to prepay the Revolving Loans to the full
extent thereof.
(c) Application of Prepayments to Base Rate Loans and Eurodollar
------------------------------------------------------------
Rate Loans. Any prepayment shall be applied first to Base Rate Loans
----------
to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any
payments required to be made by Company pursuant to subsection 2.6D.
B. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of principal,
--------------------------
interest, fees and other Obligations hereunder and under the Notes shall be
made in Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative Agent
not later than 1:00 P.M. (New York City time) on the date due at the
Funding and Payment Office for the account of Lenders; funds received by
Administrative Agent after that time on such due date shall be deemed to
have been paid by Company on the next succeeding Business Day. Company
hereby authorizes Administrative Agent to charge its accounts with
Administrative Agent in order to cause timely payment to be made to
Administrative Agent of all principal, interest, fees and
55
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expenses due hereunder (subject to sufficient funds being available in its
accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
-------------------------------------------------
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
-------------------------
payments in respect of Revolving Loans shall be apportioned among all
outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment fees of such
Lender when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of Conversion/
Continuation is withdrawn as to any Affected Lender or if any Affected
Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Subject to the provisions of
-------------------------
subsection 2.2B, whenever any payment to be made hereunder shall be stated
to be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing
-------------------
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
--------
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
C. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER GUARANTIES.
(i) Application of Proceeds of Collateral. Except as provided in
-------------------------------------
subsections 2.4A(iii)(a) and 2.4A(iii)(b) with respect to prepayments from
Net Asset Sale Proceeds and Net Insurance/Condemnation Proceeds, all
proceeds received by Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral under any Collateral Document during the continuation of an
Event of Default may, in the discretion of Administrative Agent, be held by
Administrative Agent as Collateral for, and/or (then or at any time
thereafter) applied in full or in part by Administra
56
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tive Agent against, the applicable Secured Obligations (as defined in such
Collateral Document) in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including all expenses, liabilities
and advances made or incurred by Administrative Agent and its agents
and counsel in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to the
payment of all other such Secured Obligations then due and owing for
the benefit of the holders thereof in accordance with the terms of
Intercreditor Agreement; and
(c) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Loan Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received
----------------------------------------
by Administrative Agent under the Guaranties shall be applied promptly from
time to time by Administrative Agent in the following order of priority:
(a) To the payment of the costs and expenses of any collection or
other realization under such Guaranties, including all expenses,
liabilities and advances made or incurred by Administrative Agent and
its agents and counsel in connection therewith, all in accordance with
the terms of this Agreement and Guaranty;
(b) thereafter, to the extent of any excess of such payments, to
the payment of all other Guarantied Obligations (as defined in such
Guaranty) for the benefit of the holders thereof in accordance with
the terms of the Intercreditor Agreement; and
(c) thereafter, to the extent of any excess such payments, to the
payment to Holdings or the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
---------------
A. INITIAL REVOLVING LOANS. Up to $125,000,000 in aggregate principal
amount of Revolving Loans made on the Closing Date (the "RECAPITALIZATION
REVOLVING LOANS"), together with the proceeds of the Term Loans made on the
Closing Date under the Term Loan Credit Agreement and the proceeds of the debt
and equity capitalization of Holdings and Company
57
<PAGE>
described in subsections 4.1D(i), (iii), and (iv), shall be applied by Holdings
and Company to fund the Recapitalization Financing Requirements.
B. POST CLOSING DATE REVOLVING LOANS AND SWING LINE LOANS. Revolving
Loans and Swing Line Loans made after the Closing Date may be used by Company
for working capital and general corporate purposes, which may include the making
of intercompany loans to any of Company's wholly-owned Subsidiaries, in
accordance with subsection 7.1, for their own working capital and general
corporate purposes (including Consolidated Capital Expenditures) and financing
Permitted Acquisitions.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Holdings or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/ Continuation given by Company with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded by
Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans
58
<PAGE>
(i) has become unlawful as a result of compliance by such Lender in good faith
with any law, treaty, governmental rule, regulation, guideline or order (or
would conflict with any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
would not be unlawful) or (ii) has become impracticable, or would cause such
Lender material hardship, as a result of contingencies occurring after the date
of this Agreement which materially and adversely affect the interbank Eurodollar
market or the position of such Lender in that market, then, and in any such
event, such Lender shall be an "AFFECTED LENDER" and it shall on that day give
notice (by telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by
giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, promptly upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to subsection 2.4A(i)) or other principal
payment or any conversion of any of its Eurodollar Rate Loans occurs on a date
prior to the last day of an Interest Period applicable to that Loan, (iii) if
any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Company, or (iv) as a consequence
of any other default by Company in the repayment of its Eurodollar Rate Loans
when required by the terms of this Agreement.
59
<PAGE>
E. BOOKING OF EURODOLLAR RATE LOANS. Subject to its obligations under
subsection 2.8, any Lender may make, carry or transfer Eurodollar Rate Loans at,
to, or for the account of any of its branch offices or the office of an
Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
- -------- -------
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of an Event of Default, (i) Company may not elect to
have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan
after the expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by Company with respect to a requested
borrowing or conversion/continuation of, or into, Eurodollar Rate Loans that has
not yet occurred shall be deemed to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
----------------------------------------
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
60
<PAGE>
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
-----------------------------
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction
from or to which a payment is made by or on behalf of Company or by any
federation or organization of which the United States of America or any
such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by Company to Administrative Agent or any
Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Company) for its own account or (if that liability
is imposed on Administrative Agent or such Lender, as the case may be)
on behalf of and in the name of Administrative Agent or such Lender;
61
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(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it is required
by law to make any deduction or withholding, and within 30 days after
the due date of payment of any Tax which it is required by clause (b)
above to pay, Company shall deliver to Administrative Agent evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after
the date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form
1001 or 4224 (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or the
regulations issued
62
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thereunder to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service Form
1001 or 4224 pursuant to clause (1) above, a Certificate re Non-Bank
Status together with two original copies of Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly executed
by such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under any
of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount to
any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this subsection 2.7B(iii); provided that if such Lender
--------
shall have satisfied the requirements of subsec tion 2.7B(iii)(a) on
the Closing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such
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controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by Company from such Lender of the statement referred to in the
next sentence, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis of the calculation of such additional amounts, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
-----------------------------------------------------
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
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Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses
payable by Company pursuant to this subsection 2.8 (setting forth in reasonable
detail the basis for requesting such amount) submitted by such Lender or Issuing
Lender to Company (with a copy to Administrative Agent) shall be conclusive
absent manifest error.
2.9 DEFAULTING LENDERS.
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Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "DEFAULTING LENDER") defaults (a "FUNDING DEFAULT") in its
obligation to fund any Revolving Loan (a "DEFAULTED REVOLVING LOAN") in
accordance with subsection 2.1, then (i) during any Default Period (as defined
below) with respect to such
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Defaulting Lender, such Defaulting Lender shall be deemed not to be a "Lender"
for purposes of voting on any matters (including the granting of any consents or
waivers) with respect to any of the Loan Documents, (ii) to the extent permitted
by applicable law, until such time as the Default Excess (as defined below) with
respect to such Defaulting Lender shall have been reduced to zero, (a) any
voluntary prepayment of the Revolving Loans pursuant to subsection 2.4A(i)
shall, if Company so directs at the time of making such voluntary prepayment, be
applied to the Revolving Loans of other Lenders as if such Defaulting Lender had
no Revolving Loans outstanding and the Revolving Loan Exposure of such
Defaulting Lender were zero, and (b) any mandatory prepayment of the Revolving
Loans pursuant to subsection 2.4A(iii) shall, if Company so directs at the time
of making such mandatory prepayment, be applied to the Revolving Loans of other
Lenders (but not to the Revolving Loans of such Defaulting Lender) as if such
Defaulting Lender had funded all Defaulted Revolving Loans of such Defaulting
Lender, it being understood and agreed that Company shall be entitled to retain
any portion of any mandatory prepayment of the Revolving Loans that is not paid
to such Defaulting Lender solely as a result of the operation of the provisions
of this clause (b), (iii) such Defaulting Lender's Revolving Loan Commitment and
outstanding Revolving Loans and such Defaulting Lender's Pro Rata Share of the
Letter of Credit Usage shall be excluded for purposes of calculating the
commitment fee payable to Lenders pursuant to subsection 2.3A in respect of any
day during any Default Period with respect to such Defaulting Lender, and such
Defaulting Lender shall not be entitled to receive any commitment fee pursuant
to subsection 2.3A with respect to such Defaulting Lender's Revolving Loan
Commitment in respect of any Default Period with respect to such Defaulting
Lender, and (iv) the Total Utilization of Revolving Loan Commitments as at any
date of determination shall be calculated as if such Defaulting Lender had
funded all Defaulted Revolving Loans of such Defaulting Lender.
For purposes of this Agreement, (I) "DEFAULT PERIOD" means, with respect to
any Defaulting Lender, the period commencing on the date of the applicable
Funding Default and ending on the earliest of the following dates: (A) the date
on which all Revolving Loan Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Revolving Loans of such Defaulting Lender or by the non-pro rata
application of any voluntary or mandatory prepayments of the Revolving Loans in
accordance with the terms of this subsection 2.9 or by a combination thereof)
and (2) such Defaulting Lender shall have delivered to Company and
Administrative Agent a written reaffirmation of its intention to honor its
obligations under this Agreement with respect to its Revolving Loan Commitment,
and (C) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing, and (II)
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Revolving Loans) over the aggregate outstanding principal
amount of Revolving Loans of such Defaulting Lender.
No Commitment of any Lender shall be increased or otherwise affected, and,
except as otherwise expressly provided in this subsection 2.9, performance by
Company of its obligations under this Agreement and the other Loan Documents
shall not be excused or otherwise modified, as a result of any Funding Default
or the operation of this subsection 2.9. The rights and remedies against a
Defaulting Lender under this subsection 2.9 are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and
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which Administrative Agent or any Lender may have against such Defaulting
Lender with respect to any Funding Default.
2.10 REMOVAL OR REPLACEMENT OF A LENDER.
----------------------------------
A. Anything contained in this Agreement to the contrary notwithstanding,
in the event that:
(i) (a) any Lender (an "INCREASED-COST LENDER") shall give notice
to Company that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under subsection 2.7 or subsection 3.6, (b)
the circumstances which have caused such Lender to be an Affected Lender or
which entitle such Lender to receive such payments shall remain in effect,
and (c) such Lender shall fail to withdraw such notice within five Business
Days after Company's request for such withdrawal; or
(ii) (a) any Lender shall become a Defaulting Lender, (b) the
Default Period for such Defaulting Lender shall remain in effect, and (c)
such Defaulting Lender shall fail to cure the default as a result of which
it has become a Defaulting Lender within five Business Days after Company's
request that it cure such default; or
(iii) (a) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of
this Agreement as contemplated by clauses (i) through (v) of the first
provision to subsection 10.6A, the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"NON-CONSENTING LENDER") whose consent is required shall not have been
obtained, and (b) the failure to obtain Non-Consenting Lenders' consents
does not result solely from the exercise of Non-Consenting Lenders' rights
(and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the second provision to subsection 10.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "TERMINATED LENDER") to the extent permitted by
subsection 2.10B.
B. Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so:
(i) elect to (a) terminate the Revolving Loan Commitment, if any, of
such Terminated Lender upon receipt by such Terminated Lender of such
notice and (b) prepay on the date of such termination any outstanding Loans
made by such Terminated Lender, together with accrued and unpaid interest
thereon and any other amounts payable to such Terminated Lender hereunder
pursuant to subsection 2.3, subsection 2.6, subsection 2.7 or subsection
3.6 or otherwise; provided that, in the event such Terminated Lender has
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any Loans outstanding at the time of such termination, the written consent
of Administrative Agent and Requisite Lenders (which consent shall not be
unreasonably withheld or delayed) shall be required in order for Company to
make the election set forth in this clause (i); or
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(ii) elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Loan Commitment, if any, in full to one or more Eligible
Assignees (each a "REPLACEMENT LENDER") in accordance with the provisions
of subsection 10.1B; provided that (a) on the date of such assignment,
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Company shall pay any amounts payable to such Terminated Lender pursuant to
subsection 2.3, subsection 2.6, subsection 2.7 or subsection 3.6 or
otherwise as if it were a prepayment and (b) in the event such Terminated
Lender is a Non-Consenting Lender, each Replacement Lender shall consent,
at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
provided that (X) Company may not make either of the elections set forth in
- --------
clauses (i) or (ii) above with respect to any Non-Consenting Lender unless
Company also makes one of such elections with respect to each other Terminated
Lender which is a Non-Consenting Lender and (Y) Company may not make either of
such elections with respect to any Terminated Lender that is an Issuing Lender
unless, prior to the effectiveness of such election, Company shall have caused
each outstanding Letter of Credit issued by such Issuing Lender to be cancelled.
C. Upon the prepayment of all amounts owing to any Terminated Lender and
the termination of such Terminated Lender's Revolving Loan Commitment, if any,
pursuant to clause (i) of subsection 2.10B, (i) Schedule 2.1 shall be deemed
------------
modified to reflect any corresponding changes in the Revolving Loan Commitments
and (ii) such Terminated Lender shall no longer constitute a "Lender" for
purposes of this Agreement; provided that any rights of such Terminated Lender
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to indemnification under this Agreement (including under subsections 2.6D, 2.7,
3.6, 10.2 and 10.3) shall survive as to such Terminated Lender.
SECTION 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
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THEREIN.
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A. LETTERS OF CREDIT. In addition to Company requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(ii) and that Swing Line Lender
make Swing Line Loans pursuant to subsection 2.1A(iii), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders issue Letters of Credit for the
account of Company for the purposes specified in the definitions of Commercial
Letters of Credit and Standby Letters of Credit; provided that all such
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Commercial Letters of Credit shall provide for sight drawings. Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of Company herein set forth, any one or more Lenders may, but
(except as provided in subsection 3.1B(ii)) shall not be obligated to, issue
such Letters of Credit in accordance with the provisions of this subsection 3.1;
provided that Company shall not request that any Lender issue (and no Lender
- --------
shall issue):
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(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $25,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) five Business Days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided that the
--------
immediately preceding clause (b) shall not prevent any Issuing Lender from
agreeing that a Standby Letter of Credit will automatically be extended for
one or more successive periods not to exceed one year each unless such
Issuing Lender elects not to extend for any such additional period; and
provided, further that such Issuing Lender shall elect not to extend such
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Standby Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time such Issuing Lender must elect whether or not
to allow such extension; provided, however, that notwithstanding clause (a)
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but subject to the other restrictions of this subsection, Company may
request the issuance (on a date prior to five Business Days prior to the
Revolving Loan Commitment Termination Date) of a Standby Letter of Credit
having an expiration date later than five Business Days prior to the
Revolving Loan Commitment Termination Date if Company, at the time of such
request, makes arrangements in form and substance satisfactory to the
Issuing Lender thereof to cash collateralize such Letter of Credit provided
--------
that Issuing Lender shall be under no obligation to issue such a Letter of
Credit if it shall reasonably determine that such cash collateralization
arrangements could reasonably be expected to be less favorable to Issuing
Lender than the reimbursement arrangements hereunder with respect to other
Letters of Credit;
(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date which is 180
days from the date of issuance (on a date prior to 30 days prior to the
Revolving Loan Commitment Termination Date) of such Commercial Letter of
Credit or (b) that is otherwise unacceptable to the applicable Issuing
Lender in its reasonable discretion; provided, that, notwithstanding clause
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(X) but subject to the other restrictions of this subsection, Company may
request the issuance (on a date prior to 30 days prior to the Revolving
Loan Commitment Termination Date) of a Commercial Letter of Credit having
an expiration date later than the time set forth in clause (X) if Company,
at the time of such request, makes arrangements in form and substance
satisfactory to the Issuing Lender thereof to cash collateralize such
Letter of Credit; provided further that, Issuing Lender shall be under no
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obligation to issue such a Letter of Credit if it shall reasonably
determine that such cash collateralization arrangements could reasonably be
expected to be less favorable to Issuing Lender than the reimbursement
arrangements hereunder with respect to other Letters of Credit; or
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(v) any Letter of Credit if, after giving effect to the issuance
thereof, the Total Utilization of Revolving Loan Commitments exceeds the
lesser of (y) the Revolving Loan Commitments then in effect and (z) the
Adjusted Borrowing Base Amount then in effect.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the issuance of a
------------------
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 11:00 A.M. (New York City time) at least three
Business Days (in the case of Standby Letters of Credit) or five Business
Days (in the case of Commercial Letters of Credit), or in each case such
shorter period as may be agreed to by the Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The Notice of
Issuance of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) whether the Letter of Credit
is to be a Standby Letter of Credit or a Commercial Letter of Credit, (c)
the face amount of the Letter of Credit, (d) in the case of a Letter of
Credit which Company requests to be denominated in a currency other than
Dollars, the currency in which Company requests such Letter of Credit to be
issued, (e) the expiration date of the Letter of Credit, (f) the name and
address of the beneficiary, and (g) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing Lender, in
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its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any such documents; and provided, further that no
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Letter of Credit shall require payment against a conforming draft to be
made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such draft
is required to be presented is located) that such draft is presented if
such presentation is made after 10:00 A.M. (in the time zone of such office
of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of Issuance
of Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit Company shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Company is required to certify in
the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
-------------------------------
Agent of a Notice of Issuance of Letter of Credit pursuant to subsection
3.1B(i) requesting the issuance of a Letter of Credit, in the event
Administrative Agent elects to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, and Administrative Agent shall be
the Issuing Lender with respect thereto. In the event that Administrative
Agent, in its sole discretion, elects not to issue such Letter of Credit,
Administrative Agent shall promptly so notify Company, whereupon Company
may request any other Lender to issue such Letter of Credit by delivering
to such Lender a copy of the applicable Notice of
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Issuance of Letter of Credit. Any Lender so requested to issue such Letter
of Credit shall promptly notify Company and Administrative Agent whether or
not, in its sole discretion, it has elected to issue such Letter of Credit,
and any such Lender which so elects to issue such Letter of Credit shall be
the Issuing Lender with respect thereto. In the event that all other
Lenders shall have declined to issue such Letter of Credit, notwithstanding
the prior election of Administrative Agent not to issue such Letter of
Credit, Administrative Agent shall be obligated to issue such Letter of
Credit and shall be the Issuing Lender with respect thereto,
notwithstanding the fact that the Letter of Credit Usage with respect to
such Letter of Credit and with respect to all other Letters of Credit
issued by Administrative Agent, when aggregated with Administrative Agent's
outstanding Revolving Loans and Swing Line Loans, may exceed Administrative
Agent's Revolving Loan Commitment then in effect; provided that
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Administrative Agent shall not be obligated to issue any Letter of Credit
denominated in a foreign currency which in the judgment of Administrative
Agent is not readily and freely available.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
----------------------------
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
-----------------------
Credit the applicable Issuing Lender shall promptly notify Administrative
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after receipt of
such notice (or, if Administrative Agent is the Issuing Lender, together
with such notice), Administrative Agent shall notify each Lender of the
amount of such Lender's respective participation in such Letter of Credit,
determined in accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each
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calendar quarter ending after the Closing Date, so long as any Letter of
Credit shall have been outstanding during such calendar quarter, each
Issuing Lender shall deliver to each other Lender a report setting forth
for such calendar quarter the daily aggregate amount available to be drawn
under the Letters of Credit issued by such Issuing Lender that were
outstanding during such calendar quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT. Immediately
upon the issuance of each Letter of Credit, each Lender having a Revolving Loan
Commitment shall be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Letter of Credit and any
drawings honored thereunder in an amount equal to such Lender's Pro Rata Share
(with respect to the Revolving Loan Commitments) of the maximum amount which is
or at any time may become available to be drawn thereunder. On the Revolving
Loan Commitment Termination Date, the Issuing Lender shall be deemed to, and
hereby agrees to, irrevocably repurchase from each Lender such Lender's
participation in the Letters of Credit issued by such Issuing Lender pursuant to
the last proviso to subsection 3.1A(iii) or the last proviso to subsection
3.1A(iv) to the extent any such Letter of Credit remains outstanding and any
amounts remain undrawn thereunder.
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3.2 LETTER OF CREDIT FEES.
---------------------
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to 1/8 of 1% per annum of the daily amount available to be drawn
under such Standby Letter of Credit and (b) a letter of credit fee, payable
to Administrative Agent for the account of Lenders having Revolving Loan
Exposure, equal to the product of (x) the Applicable Eurodollar Rate Margin
and (y) the daily amount available to be drawn under such Standby Letter of
Credit, each such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) each March 15, June 15, September 15 and
December 15 of each year and computed on the basis of a 360-day year for
the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its own
account, equal to 1/8 of 1% per annum of the daily amount available to be
drawn under such Commercial Letter of Credit and (b) a letter of credit
fee, payable to Administrative Agent for the account of Lenders having
Revolving Loan Exposure, equal to the product of (x) the Applicable
Eurodollar Rate Margin and (y) the daily amount available to be drawn under
such Commercial Letter of Credit, each such fronting fee or letter of
credit fee to be payable in arrears on and to (but excluding) each March
15, June 15, September 15 and December 15 of each year and computed on the
basis of a 360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (2) any amount described in such clauses which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) or (ii)(b) of this subsection 3.2, Administrative Agent shall distribute
to each Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
------------------------------------------------------------------
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit
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with reasonable care so as to ascertain whether they appear on their face to be
in accordance with the terms and conditions of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF CREDIT. In
the event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars (which amount, in the
case of a drawing under a Letter of Credit which is denominated in a currency
other than Dollars, shall be calculated by reference to the applicable Exchange
Rate) and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
- --------
notwithstanding, (i) unless Company shall have notified Administrative Agent and
such Issuing Lender prior to 11:00 A.M. (New York City time) on the date such
drawing is honored that Company intends to reimburse such Issuing Lender for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Revolving Loans that are Base
Rate Loans on the Reimbursement Date in an amount in Dollars (which amount, in
the case of a drawing under a Letter of Credit which is denominated in a
currency other than Dollars, shall be calculated by reference to the applicable
Exchange Rate) equal to the amount of such honored drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2B, Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such honored drawing, the proceeds of which shall be applied
directly by Administrative Agent to reimburse such Issuing Lender for the amount
of such honored drawing; and provided, further that, if for any reason proceeds
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of Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, Company shall
reimburse such Issuing Lender, on demand, in an amount in same day funds equal
to the excess of the amount of such honored drawing over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS OF
CREDIT.
(i) Payment by Lenders. In the event that Company shall fail for any
------------------
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount (calculated, in the case of a drawing under a Letter of Credit
denominated in a currency other than Dollars, by reference to the
applicable Exchange Rate) equal to the amount of any drawing honored by
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the unreimbursed amount
of such honored drawing and of such other Lender's respective participation
therein based on such Lender's Pro Rata Share of the Revolving Loan
Commitments. Each Lender shall make available to such Issuing Lender an
amount equal to its respective participation, in Dollars and in same day
funds, at the office of such Issuing Lender specified in such notice, not
later than 12:00 Noon (New York City time) on the first business day (under
the laws of the jurisdiction in which such office of such Issuing Lender is
located) after the date notified by such Issuing Lender. In
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the event that any Lender fails to make available to such Issuing Lender on
such business day the amount of such Lender's participation in such Letter
of Credit as provided in this subsection 3.3C, such Issuing Lender shall be
entitled to recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by such Issuing Lender for
the correction of errors among banks for three Business Days and thereafter
at the Base Rate. Nothing in this subsection 3.3C shall be deemed to
prejudice the right of any Lender to recover from any Issuing Lender any
amounts made available by such Lender to such Issuing Lender pursuant to
this subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with respect
to a Letter of Credit by such Issuing Lender in respect of which payment
was made by such Lender constituted gross negligence or willful misconduct
on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
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In the event any Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of any drawing
honored by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such
honored drawing such other Lender's Pro Rata Share of all payments
subsequently received by such Issuing Lender from Company in reimbursement
of such honored drawing when such payments are received. Any such
distribution shall be made to a Lender at its primary address set forth
below its name on the appropriate signature page hereof or at such other
address as such Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay to each
------------------------------
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the Base Rate
plus the Applicable Base Rate Margin for Revolving Loans and (b)
----
thereafter, if Requisite Lenders so elect in writing pursuant to the
provision of subsection 2.2E of this Agreement, a rate which is 2% per
annum in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this sub section 3.3D(i) shall be computed on
the basis of a 365-day or 366-day year, as the case may be, for the actual
number of days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which the
related drawing under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
---------------------------------------------------
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in respect of
the period from the date such drawing is honored to but excluding the date
on which such
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Issuing Lender is reimbursed for the amount of such drawing (including any
such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Lender would have been
entitled to receive in respect of the letter of credit fee that would have
been payable in respect of such Letter of Credit for such period pursuant
to subsection 3.2 if no drawing had been honored under such Letter of
Credit, and (b) in the event such Issuing Lender shall have been reimbursed
by other Lenders pursuant to subsection 3.3C(i) for all or any portion of
such honored drawing, such Issuing Lender shall distribute to each other
Lender which has paid all amounts payable by it under sub section 3.3C(i)
with respect to such honored drawing such other Lender's Pro Rata Share of
any interest received by such Issuing Lender in respect of that portion of
such honored drawing so reimbursed by other Lenders for the period from the
date on which such Issuing Lender was so reimbursed by other Lenders to but
excluding the date on which such portion of such honored drawing is
reimbursed by Company. Any such distribution shall be made to a Lender at
its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
--------------------
The obligation of Company to reimburse each Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to subsection 3.3B and the obligations of Lenders
under subsection 3.3C(i) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Holdings or one
of its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any 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;
(iv) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings or any
of its Subsidiaries;
(v) any breach of this Agreement or any other Loan Document by any
party thereto;
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
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(vii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
- --------
applicable Letter of Credit shall not have constituted bad faith, gross
negligence or willful misconduct of such Issuing Lender under the circumstances
in question (as determined by a final judgment of a court of competent
jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
--------------------------------------------------
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the bad faith, gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto government or governmental authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) so long as such Issuing Lender
complies with its responsibilities under subsection 3.3A, failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
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In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising out of the bad faith, gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be controlling
with respect to the matters covered thereby), in the event that any Issuing
Lender or Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that any
law, treaty or governmental rule, regulation or order, or any change therein or
in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by any Issuing Lender or
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of such Issuing Lender or Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being imposed
on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Lender for which such Issuing Lender is not
otherwise compensated hereunder; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of
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the statement referred to in the next sentence, such additional amount or
amounts as may be necessary to compensate such Issuing Lender or Lender for any
such increased cost or reduction in amounts received or receivable hereunder.
Such Issuing Lender or Lender shall deliver to Company a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Issuing Lender or Lender under this subsection 3.6, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 CONDITIONS TO INITIAL LOANS.
---------------------------
The obligations of Lenders to make the Revolving Loans to be made on the
Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company shall,
and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Company or such Loan Party, as the case may be, each, unless otherwise noted,
dated the Closing Date:
(i) Certified copies of the Agreement of Limited Partnership or
Certificate or Articles of Incorporation of such Person, together with a
good standing certificate from the Secretary of State of its jurisdiction
of formation or incorporation and each other state in which such Person is
qualified as a foreign Person to do business (except, with respect to Loan
Parties, other than Company, any such other state or states in which
failure to be qualified could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (provided that no
--------
such state shall be a state in which real property of the applicable Loan
Party is located)) and, to the extent generally available, a certificate or
other evidence of good standing or existence as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority
of each of such jurisdictions, each dated a recent date prior to the
Closing Date;
(ii) Copies of the Bylaws of each such Person that is a corporation,
certified as of the Closing Date by such Person's corporate secretary or an
assistant secretary;
(iii) Resolutions of the Board of Directors, general partner or other
authorizing body of such Person approving and authorizing the execution,
delivery and performance of the Loan Documents and Related Agreements to
which it is a party, certified as of the Closing Date by the secretary or
an assistant secretary or general partner of such Person as being in full
force and effect without modification or amendment;
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(iv) Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such Person
is a party; and
(vi) Such other documents as any Agent may reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since March 31, 1998, no Material Adverse
Effect (in the opinion of any Agent) shall have occurred.
C. CORPORATE AND CAPITAL STRUCTURE, OWNERSHIP, MANAGEMENT, ETC.
(i) Corporate Structure. The organizational structure of Holdings
-------------------
and its Subsidiaries, after giving effect to the Recapitalization
Transactions, shall be as set forth on Schedule 4.1C annexed hereto.
-------------
(ii) Capital Structure and Ownership. The capital structure and
-------------------------------
ownership of Holdings and its Subsidiaries, after giving effect to the
Recapitalization Transactions, shall be reasonably satisfactory to the
Agents in all respects and as set forth on Schedule 4.1C annexed hereto.
-------------
(iii) Employment Agreement. The Agents shall have received a duly
--------------------
executed copy of, and shall be reasonably satisfied with the form and
substance of, the Employment Agreement.
D. PROCEEDS OF DEBT AND EQUITY CAPITALIZATION OF HOLDINGS AND COMPANY.
(i) Equity Capitalization. On or before the Closing Date, Bain
---------------------
Investors, their Related Parties, the Existing Investors and the Other
Investors shall have made the Equity Contribution.
(ii) Term Loans. On the Closing Date, Company shall have borrowed
----------
$50,000,000 in aggregate principal amount of Term Loans under the Term Loan
Credit Agreement.
(iii) Senior Notes. On or before the Closing Date, Company and
------------
Anthony Crane Capital Corporation shall have issued and sold for Cash not
less than $155,000,000 in aggregate principal amount of Senior Notes.
(iv) Senior Discount Debentures. On or before the Closing Date,
--------------------------
Holdings and Anthony Crane Holdings Capital Corporation shall have issued
and sold for Cash the Senior Discount Debentures providing gross Cash
proceeds to Holdings and Anthony Crane Holdings Capital Corporation of not
less than $25,000,000.
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(v) Preferred Units. On or before the Closing Date, Holdings shall
---------------
have issued Preferred Units having a liquidation value of $22,500,000 in
connection with the Recapitalization Transactions.
(vi) Use of Proceeds. Company shall have provided evidence
---------------
reasonably satisfactory to Agents that the proceeds of the debt and equity
capitalization of Holdings and Company described in the immediately
preceding clauses (i), (ii), (iii), (iv) and (v) have been irrevocably
committed, prior to the application of the proceeds of the Recapitalization
Revolving Loans, to the payment of a portion of the Recapitalization
Financing Requirements.
E. RELATED AGREEMENTS; TERM LOAN CREDIT DOCUMENTS.
(i) The Related Agreements shall each be reasonably satisfactory in
form and substance to Agents.
(ii) Agents shall each have received a fully executed or conformed
copy of each Related Agreement and any documents executed in connection
therewith, and each of the Related Agreements shall be in full force and
effect and no provision thereof related to payments thereunder shall have
been modified or waived in any respect determined by any of the Agents to
be material, in each case without the consent of Agents.
(iii) Agents shall each have received a fully executed or conformed
copy of the Term Loan Credit Documents, including the Term Loan Credit
Agreement (and all exhibits and schedules thereto), any promissory notes
evidencing the Term Loans and the Intercreditor Agreement, each of which
shall be in form and substance reasonably satisfactory to Agents, and each
such agreement and promissory note shall be in full force and effect.
F. MATTERS RELATING TO EXISTING INDEBTEDNESS OF HOLDINGS AND ITS
SUBSIDIARIES.
(i) Termination of Existing Credit Agreement and Related Liens;
-----------------------------------------------------------
Existing Letters of Credit. On the Closing Date, Company and its
--------------------------
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreement, (b) terminated any commitments to lend
or make other extensions of credit thereunder, (c) delivered to Agents all
documents or instruments necessary to release any Liens securing
Indebtedness or other obligations of Holdings and its Subsidiaries
thereunder, and (d) made arrangements reasonably satisfactory to Agents
with respect to the cancellation or credit support of any letters of credit
outstanding thereunder or the issuance of Letters of Credit to support the
obligations of Holdings and its Subsidiaries with respect thereto.
(ii) No Existing Indebtedness to Remain Outstanding. Agents shall
----------------------------------------------
have received an Officers' Certificate of Company stating that, after
giving effect to the transactions described in this subsection 4.1F, the
Loan Parties shall have no Indebtedness outstanding to Persons other than
the Loan Parties, other than Indebtedness under the Loan Documents,
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the Term Loans, the Senior Discount Debentures, the Senior Notes and
Indebtedness set forth on Schedule 7.1 annexed hereto.
------------
G. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Holdings and Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary in connection with the Recapitalization Transactions, and the other
transactions contemplated by the Loan Documents and the Related Agreements, and
the continued operation of the business conducted by Holdings and its
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Recapitalization Transactions, and each of the foregoing
shall be in full force and effect, in each case other than those the failure to
obtain or maintain which, either individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. All applicable
waiting periods shall have expired without any action being taken or threatened
by any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the Recapitalization Transactions or the financing
thereof. No action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.
H. CONSUMMATION OF RECAPITALIZATION TRANSACTIONS.
(i) All conditions to the Recapitalization Transactions shall have
been satisfied pursuant to documentation, including, without limitation,
the Recapitalization Agreement, reasonably satisfactory to Agents or the
fulfillment of such conditions shall have been waived with the consent of
Agents, such consent not to be unreasonably withheld;
(ii) The aggregate Cash consideration paid to the holders of equity
interests in Company in respect of such equity interests in connection with
the Recapitalization Transaction shall not exceed $130,100,000 (subject to
adjustment as set forth in the Recapitalization Agreement);
(iii) Transaction Costs shall not exceed $27,000,000; and
(iv) Agents shall have received an Officers' Certificate of Company
and Holdings to the effect set forth in clauses (i)-(iii) above and stating
that Company and Holdings will proceed to consummate the Recapitalization
Transactions immediately upon the making of the initial Loans.
I. CLOSING DATE MORTGAGES; CLOSING DATE MORTGAGE POLICIES; ETC. Agents
shall have received from Holdings, Company and each applicable Subsidiary
Guarantor:
(i) Closing Date Mortgages. Fully executed and notarized Mortgages
----------------------
(each a "CLOSING DATE MORTGAGE" and, collectively, the "CLOSING DATE
MORTGAGES"), in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in
Schedule 4.1I annexed hereto (each a "CLOSING DATE MORTGAGED PROPERTY" and,
-------------
collectively, the "CLOSING DATE MORTGAGED PROPERTIES") together with an
assignment of rents and leases with respect to each of the Closing Date
Mortgaged Properties;
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together with an assignment of rents and leases with respect to each of the
Closing Date Mortgaged Properties;
(ii) Opinions of Local Counsel. An opinion of counsel (which counsel
-------------------------
shall be reasonably satisfactory to Agents) in West Virginia with respect
to the enforceability of the form(s) of Closing Date Mortgages to be
recorded in such state and such other matters as any Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Agents; provided, however, that Agents may determine in their reasonable
-------- -------
discretion that an opinion of counsel in any one or more of such states
shall not be required hereunder;
(iii) Title Insurance. (a) ALTA mortgagee title insurance policies or
---------------
unconditional commitments therefor (the "CLOSING DATE MORTGAGE POLICIES")
issued by the Title Company with respect to the Closing Date Mortgaged
Properties listed in Part A of Schedule 4.1I annexed hereto, in amounts not
-------------
less than the respective amounts designated therein with respect to any
particular Closing Date Mortgaged Properties, insuring fee simple title to,
or a valid leasehold interest in, each such Closing Date Mortgaged Property
vested in such Loan Party and assuring Collateral Agent that the applicable
Closing Date Mortgages create valid and enforceable First Priority mortgage
Liens on the respective Closing Date Mortgaged Properties encumbered
thereby, subject to standard survey exceptions, which Closing Date Mortgage
Policies (1) shall include an endorsement for mechanics' liens, for future
advances (in each case, if available) under this Agreement and for any
other matters reasonably requested by any of Agents and (2) shall provide
for affirmative insurance and such reinsurance as Collateral Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to Agents; and (b) evidence reasonably satisfactory to Agents
that such Loan Party has (i) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Closing Date Mortgage Policies and (ii) paid to
the Title Company or to the appropriate governmental authorities all
expenses and premiums of the Title Company in connection with the issuance
of the Closing Date Mortgage Policies and all recording and stamp taxes
(including mortgage recording and intangible taxes) payable in connection
with recording the Closing Date Mortgages in the appropriate real estate
records;
(iv) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Closing Date Mortgage Policies or in the title reports delivered
pursuant to subsection 4.1I(iii); and
(v) Matters Relating to Flood Hazard Properties. (a) Evidence, which
-------------------------------------------
may be in the form of a surveyor's note on a survey or a report from a
flood hazard search firm, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the community in which any such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard Properties, such
Loan Party's written acknowledgement of receipt of written notification
from Collateral Agent (1) as to the existence of each such Flood Hazard
Property and (2) as to whether the community in which each such Flood
Hazard Property is located is participating in the National Flood Insurance
Program, and (c) in the event any such Flood Hazard Property is located in
a community that participates in the National Flood Insurance Program,
evidence
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that Company has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System.
J. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the extent not
otherwise satisfied pursuant to subsection 4.1I, Agents shall have received
evidence satisfactory to it that each Loan Party shall have taken or caused to
be taken all such actions, executed and delivered or caused to be executed and
delivered all such agreements, documents and instruments, and made or caused to
be made all such filings and recordings (other than the filing or recording of
items described in clauses (iii), (iv) and (v) below) that may be necessary or,
in the reasonable opinion of Agents, desirable in order to create in favor of
Collateral Agent, for the benefit of Lenders, a valid and (upon such filing and
recording) perfected First Priority security interest in the entire personal and
mixed property Collateral. Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
---------------------------------
Agent of accurate and complete schedules to all of the applicable
Collateral Documents.
(ii) Stock Certificates, Instruments and Certificates of Title.
---------------------------------------------------------
Delivery to Collateral Agent of (a) certificates (which certificates shall
be accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Collateral Agent)
representing all capital stock or other equity interests pledged pursuant
to the Pledge and Security Agreement, (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Collateral Agent) evidencing any Collateral and (c) except as otherwise set
forth in the Pledge and Security Agreement, certificates of title,
indicating thereon the Lien created under the Pledge and Security Agreement
with respect to any item of equipment covered by a certificate of title
issued under a statute of any state requiring such indication of such
security interest as a condition of perfection thereof;
(iii) Lien Searches and UCC Termination Statements. Delivery to
--------------------------------------------
Collateral Agent of (a) the results of a recent search, by a Person
reasonably satisfactory to Agents, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which
may have been made with respect to any personal or mixed property of any
Loan Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
--------------------------------------------
Collateral Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the opinion of
Agents, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents;
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(v) PTO Cover Sheets, Etc. Delivery to Collateral Agent of all cover
---------------------
sheets or other documents or instruments required to be recorded with the
PTO in order to create or perfect Liens in respect of any U.S. patents,
federally registered trademarks or copyrights, or applications for any of
the foregoing, included among the IP Collateral; and
(vi) Opinions of Local Counsel. To the extent requested by Agents,
-------------------------
delivery to Agents of an opinion of counsel under the laws of each
jurisdiction in which any Loan Party or any personal or mixed property
Collateral is located with respect to the creation and perfection of the
security interests in favor of Collateral Agent in such Collateral and such
other matters governed by the laws of such jurisdiction regarding such
security interests as Agents may reasonably request, in each case in form
and substance reasonably satisfactory to Agents.
K. ENVIRONMENTAL REPORTS. Agents shall have received an environmental
assessment report in form and substance reasonably satisfactory to Agents
addressing each of the Facilities listed in Schedule 4.1K annexed hereto
-------------
prepared by ENVIRON Corporation (or another firm reasonably satisfactory to
Agents).
L. FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or before the
Closing Date, Agents shall have received from Company (i) audited consolidated
financial statements of Company and its Subsidiaries for Fiscal Years 1995, 1996
and 1997, consisting of consolidated balance sheets and the related consolidated
statements of income, partners capital and cash flows for such Fiscal Years,
(ii) unaudited consolidated financial statements of Company and its Subsidiaries
for each fiscal month and Fiscal Quarter ended subsequent to the date of the
most recent financial statements delivered pursuant to clause (i), consisting of
consolidated balance sheets and the related consolidated statements of income,
partner's capital, and cash flows for such periods, all in reasonable detail and
certified by the principal financial officer or principal accounting officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments and the
absence of footnotes, and (iii) pro forma consolidated balance sheets of Company
and its Subsidiaries as at the date of the most recent consolidated balance
sheet delivered pursuant to clause (ii), prepared in accordance with GAAP and
reflecting the consummation of the Recapitalization Transactions, the related
financings and the other transactions contemplated by the Loan Documents and the
Related Agreements as if such transactions had occurred on such date, which pro
forma financial statements shall be in form and substance reasonably
satisfactory to Agents.
M. FINANCIAL PROJECTIONS. Lenders shall have received financial
projections reasonably satisfactory in form and substance to Agents and Lenders
for Company and its Subsidiaries for the period from the Closing Date through
December 2006.
N. SOLVENCY ASSURANCES. On the Closing Date, Agents shall have received
(i) a letter from Murray Devine & Co., dated the Closing Date and addressed to
Agents and Lenders, in form and substance reasonably satisfactory to Agents and
with appropriate attachments, and (ii) a Financial Condition Certificate dated
the Closing Date, substantially in the form of Exhibit XI
----------
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annexed hereto (with such changes thereto as shall be approved by Agents in the
exercise of their reasonable discretion) and with appropriate attachments, in
each case demonstrating that, after giving effect to the consummation of the
Recapitalization Transactions, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, Holdings and its
Subsidiaries will be Solvent.
O. EVIDENCE OF INSURANCE. Agents shall have received a certificate from
Company's insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to subsection 6.4 is in full force
and effect and that Collateral Agent on behalf of Lenders has been named as
additional insured and/or loss payee thereunder to the extent required under
subsection 6.4.
P. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Kirkland & Ellis, counsel for Loan Parties, and of
Williams Coulson Johnson Lloyd Parker & Tedesco, LLC, special Pennsylvania
counsel for Loan Parties, in form and substance reasonably satisfactory to
Agents and their counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit VII annexed
-----------
hereto and as to such other matters as or Agents and acting on behalf of Lenders
may reasonably request and (ii) evidence satisfactory to Agents that Loan
Parties have requested such counsel to deliver such opinions to Lenders.
Q. OPINIONS OF AGENT'S COUNSEL. Lenders shall have received originally
executed copies of one or more favorable written opinions of O'Melveny & Myers
LLP, counsel to Agents, dated as of the Closing Date, substantially in the form
of Exhibit VIII annexed hereto and as to such other matters as Agents may
------------
reasonably request.
R. OPINIONS OF COUNSEL DELIVERED UNDER RELATED AGREEMENTS. Agents and
their counsel shall have received copies of each of the opinions of counsel
delivered to the parties under the Related Agreements, together with a letter
from each such counsel (to the extent not inconsistent with such counsel's
established internal policies) authorizing Lenders to rely upon such opinion to
the same extent as though it were addressed to Lenders.
S. FEES AND EXPENSES. Company shall have paid to Agents, for
distribution (as appropriate) to Agents, the fees payable on the Closing Date
referred to in subsection 2.3 and all reasonable expenses for which invoices
have been presented on or before the Closing Date.
T. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Agents an Officers' Certificate, in form and substance
reasonably satisfactory to Agents, to the effect that the representations and
warranties in Section 5 hereof are true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and
as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that Holdings and Company shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by them on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by Agents and
Requisite Lenders.
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U. BORROWING BASE CERTIFICATE; APPRAISALS. Company shall have delivered
(a) a Borrowing Base Certificate dated as of the Closing Date demonstrating an
Adjusted Borrowing Base Amount as of such date of not less than $275,000,000 and
(b) appraisals from independent third-party appraiser in form and substance
reasonably satisfactory to Agents confirming the valuations of assets to be
included in the calculation of the Adjusted Borrowing Base Amount.
V. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Agents and their
counsel shall be reasonably satisfactory in form and substance to Agents and
such counsel, and Agents and such counsel shall have received all such
counterpart originals or certified copies of such documents as Agents may
reasonably request.
Notwithstanding anything herein to the contrary, it is understood and
agreed that the documents and other items set forth on Schedule 6.11 annexed
-------------
hereto shall be delivered after the Closing Date in accordance with and to the
extent required under subsection 6.11.
Each Lender, by delivering its signature page to this Agreement and funding
its Recapitalization Revolving Loan on the Closing Date, shall be deemed to have
acknowledged receipt of, and consented to and approved, each Loan Document and
each other document required to be approved by Agents, Requisite Lenders or
Lenders, as applicable, on or prior to the Closing Date.
4.2 CONDITIONS TO ALL LOANS.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are subject
to the following further conditions precedent:
A. Administrative Agent shall have received on or before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, chief operating officer, president, the principal financial officer,
the principal accounting officer or the treasurer of Company or by any
authorized employee of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
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(iii) After making the Loans requested on such Funding Date, the Total
Utilization of Revolving Loan Commitments shall not exceed the lesser of
(y) the Revolving Loan Commitments then in effect and (z) the Adjusted
Borrowing Base Amount then in effect;
(iv) The making of the Loans requested on such Funding Date shall not
violate any law including Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System; and
(v) There shall not be pending or, to the knowledge of Holdings or
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries that
has not been disclosed by Holdings or Company in writing pursuant to
subsection 5.6 or 6.1(x) prior to the making of the last preceding Loans
(or, in the case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development not so disclosed
in any such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the reasonable opinion
of Administrative Agent or of Requisite Lenders, would be expected to have
a Material Adverse Effect or be inconsistent with the financial statements,
balance sheets or financial projections delivered in accordance with
subsection 4.1L or 4.1M; and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any action,
suit or proceeding seeking to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions
of subsection 3.1B(i), an originally executed Notice of Issuance of Letter
of Credit, in each case signed by the chief executive officer, chief
operating officer, president, the principal financial officer, the
principal accounting officer or the treasurer of Company or by any
authorized employee of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative
Agent, together with all other information specified in subsection 3.1B(i)
and such other documents or information as the applicable Issuing Lender
may reasonably require in connection with the issuance of such Letter of
Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such
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Letter of Credit were the making of a Loan and the date of issuance of such
Letter of Credit were a Funding Date.
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lenders to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Holdings and Company represent and
warrant to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
----------------------------------------------------------------
SUBSIDIARIES.
------------
A. ORGANIZATION AND POWERS. Each Corporate Loan Party is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and each Partnership Loan Party is a duly
organized and validly existing partnership under the laws of its jurisdiction of
formation and is in good standing in such jurisdiction in each case as of the
Closing Date as specified in Schedule 5.1 annexed hereto. Each Loan Party has
------------
all requisite corporate or partnership (as applicable) power and authority to
own and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and Related
Agreements to which it is a party and to carry out the transactions contemplated
thereby.
B. QUALIFICATION AND GOOD STANDING. Each Corporate Loan Party is
qualified to do business and in good standing, and each Partnership Loan Party
is authorized as a foreign partnership to do business, in every jurisdiction
where its assets are located and wherever necessary to carry out its business
and operations, except in jurisdictions where the failure to be so qualified or
in good standing has not had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Holdings and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.13.
D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of the Closing
Date are identified in Schedule 5.1 annexed hereto. The capital stock or other
------------
equity interests of each of Holdings' Subsidiaries any portion of which is
pledged under the Collateral Documents is duly authorized, validly issued, fully
paid and nonassessable and none of such capital stock or other equity interests
constitutes Margin Stock. The limited and general partnership interests of each
of the Subsidiaries identified in Schedule 5.1 annexed hereto which are limited
------------
partnerships are duly and validly issued. Each of the Subsidiaries of Holdings
is duly organized or formed, validly existing and in good standing under the
laws of its respective jurisdiction of organization or formation, has all
requisite corporate, limited liability company or partnership power and
authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified to do business and
in good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case
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except where failure to be so qualified or in good standing or a lack of such
corporate, limited liability company or partnership power and authority has not
had and will not have a Material Adverse Effect. Schedule 5.1 annexed hereto (as
------------
so supplemented) correctly sets forth, as of the Closing Date, the ownership
interest of Holdings and each of its Subsidiaries in each of the Subsidiaries of
Holdings identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
--------------------------------
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents and the Related Agreements have been duly authorized by
all necessary corporate, limited liability company and/or partnership (as
applicable) action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan Parties
of the Loan Documents and the Related Agreements to which they are parties and
the consummation of the transactions contemplated by the Loan Documents and such
Related Agreements do not (i) violate any provision of any law or any
governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws (or other
analogous organizational document) of Holdings or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Holdings or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Holdings or any of its Subsidiaries; provided that
--------
with respect to only the Related Agreements, any such conflict or default could
not be reasonably expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Holdings or any of its Subsidiaries (other than any Permitted
Encumbrances or Liens, created under any of the Loan Documents in favor of
Collateral Agent) or (iv) require any approval of stockholders or partners or
any approval or consent of any Person under any Contractual Obligation of
Holdings or any of its Subsidiaries, except for such approvals or consents which
will be obtained on or before the Closing Date and disclosed in writing to
Lenders or the failure of which to obtain could not reasonably be expected to
have a Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body except to the extent obtained or made and except for those
filings necessary to perfect Liens under the Collateral Documents, other filings
to effect releases of Liens on the Closing Date and other filings made in the
ordinary conduct of business. The execution, delivery and performance by Loan
Parties of the Related Agreements to which they are parties and the consum
mation of the transactions contemplated by such Related Agreements in the manner
set forth therein do not require any registration with, consent or approval of,
or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body except (i) to the extent obtained or
made or (ii) where the failure to obtain or make any of the foregoing,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect.
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D. BINDING OBLIGATION. Each of the Loan Documents and Related Agreements
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
E. VALID ISSUANCE OF PARTNERSHIP UNITS, SENIOR NOTES AND SENIOR DISCOUNT
DEBENTURES.
(i) Common Units and Preferred Units. The Common Units and Preferred
--------------------------------
Units to be issued on the Closing Date have been duly and validly issued
and fully paid on such date. The issuance and sale of such Common Units and
Preferred Units have either (a) been registered or qualified under
applicable federal and state securities laws or (b) are exempt therefrom.
(ii) Senior Notes. Company has the power and authority to issue the
------------
Senior Notes. The Senior Notes, when issued and paid for, will be the
legally valid and binding obligations of Company, enforceable against
Company in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability. The Senior Notes, when issued and
sold in the manner contemplated by the Related Agreements on the Closing
Date, will either (a) have been registered or qualified under applicable
federal and state securities laws or (b) be exempt therefrom.
(iii) Senior Discount Debentures. Holdings has the power and authority
--------------------------
to issue the Senior Discount Debentures. The Senior Discount Debentures,
when issued and paid for, will be the legally valid and binding obligations
of Holdings, enforceable against Holdings in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The Senior Discount Debentures, when issued and sold in the
manner contemplated by the Related Agreements on the Closing Date, will
either (a) have been registered or qualified under applicable federal and
state securities laws or (b) be exempt therefrom.
5.3 FINANCIAL CONDITION.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries for each of Fiscal Years 1995,
1996 and 1997 and the related consolidated statements of income, partner's
capital, and cash flows of Company and its Subsidiaries for each such Fiscal
Year and (ii) the unaudited consolidated and consolidating balance sheets of
Company and its Subsidiaries for each fiscal month and Fiscal Quarter ended
subsequent to the date of the most recent financial statements referred to in
clause (i) and the related unaudited consolidated statements of income,
partner's capital, and cash flows of Company and its Subsidiaries for each such
period
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(except for statements of cash flows for each such monthly period). All
such statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments and the absence of footnotes. On the
Closing Date, Holdings and Company do not (and will not following the funding of
the initial Loans) have any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements, in the pro forma
balance sheet delivered pursuant to subsection 4.1L, or in the financial
projections delivered pursuant to subsection 4.1M or reflected on Schedule 5.3,
------------
and which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) of Holdings and any of
its Subsidiaries, taken as a whole.
5.4 NO MATERIAL ADVERSE CHANGE.
--------------------------
Since December 31, 1997 no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
-----------------------------------------
A. TITLE TO PROPERTIES; LIENS. Holdings and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), valid leasehold interests in (in the case of leasehold interests in
real or personal property), valid licenses in (in the case of licensed
intangible properties), or (iv) good title to (in the case of all other personal
property), all of their respective material properties and assets reflected in
the most recent financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case subject to Permitted Encumbrances and Liens permitted under subsection 7.2
and except for assets described on Schedule 5.5A annexed hereto and assets
-------------
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under subsection 7.7. Except as otherwise
permitted by this Agreement, all such properties and assets are free and clear
of Liens.
B. REAL PROPERTY. As of the Closing Date, Schedule 5.5 annexed hereto
------------
contains a true, accurate and complete list of (i) all Real Property Assets
owned in fee simple by any Loan Party and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset of any
Loan Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Closing Date, except as specified in Schedule
--------
5.5 annexed hereto, each agreement referenced in clause (ii) of the immediately
- ---
preceding sentence is in full force and effect and Holdings and Company do not
have knowledge of any default that has occurred and is continuing thereunder
(except where the consequences, direct or indirect, of such default or defaults,
if any, would not reasonably be expected to have a Material Adverse Effect), and
each such material agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency,
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reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles.
5.6 LITIGATION; ADVERSE FACTS.
-------------------------
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Holdings or Company, threatened against or
affecting Holdings or any of its Subsidiaries or any property of Holdings or any
of its Subsidiaries and that, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect. Neither Holdings nor any of
its Subsidiaries (i) is in violation of any applicable laws (including
Environmental Laws) that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect, or (ii) is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
----------------
Except to the extent permitted by subsection 6.3, all federal, state and
other material tax returns and reports of Holdings and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes shown on such
tax returns to be due and payable and all assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Holdings and Company know of
no proposed material tax assessment against Holdings or any of its Subsidiaries
which is not being actively contested by Holdings or such Subsidiary in good
faith and by appropriate proceedings; provided that such reserves or other
--------
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
--------------------------------------------------------
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, obser vance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, compliance with
which could reasonably be expected to result in a Material Adverse Effect.
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5.9 GOVERNMENTAL REGULATION.
-----------------------
Neither Holdings nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
---------------------
A. Neither Holdings nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Company only or of Holdings and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
----------------------
A. Holdings and each of its Subsidiaries are in compliance in all
material respects with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each of
the respective Employee Benefit Plans, and have performed all their obligations
under each of the respective Employee Benefit Plans. Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal Revenue Code
is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur which
has or would reasonably be expected to result in a liability to Holdings or any
of its Subsidiaries in excess of $5,000,000.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, the aggregate liabilities with respect to health or welfare
benefits (through the purchase of insurance or otherwise) provided or promised
for any retired or former employee of Holdings or any of its Subsidiaries do not
exceed $5,000,000.
D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans, does not exceed
$5,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Holdings,
its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal
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from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA, does not exceed $10,000,000.
5.12 CERTAIN FEES.
------------
Except as set forth on Schedule 5.12, no broker's or finder's fee or
-------------
commission will be payable with respect to this Agreement or any of the
transactions contemplated hereby, and Holdings and Company hereby indemnifies
Lenders against, and agrees that it will hold Lenders harmless from, any claim,
demand or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
------------------------
(i) Neither Holdings nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, in the case of (a), (b) or (c),
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;
(ii) Neither Holdings nor any of its Subsidiaries has received any
letter or written request for information from any governmental agency
under Section 104 of the Comprehen sive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S) 9604) or any comparable
state law the subject of which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(iii) To Holdings' and Company's knowledge, there are no and have been
no conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Holdings or any of its Subsidiaries that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect;
(iv) Holdings and its Subsidiaries maintain an environmental
management system designed to maintain compliance in all material respects
with Environmental Laws and correct any incidents of non-compliance;
(v) Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect; and
(vi) No event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Environmental Law,
any Release of Hazardous Materials, or any Hazardous Materials Activity
which individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect.
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5.14 EMPLOYEE MATTERS.
----------------
There is no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
5.15 SOLVENCY.
--------
Each Loan Party is and, upon the incurrence of any Obligations by such Loan
Party on any date on which this representation is made, will be, Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
------------------------------
A. CREATION, PERFECTION AND PRIORITY OF LIENS. Except as otherwise set
forth therein, the execution and delivery of the Collateral Documents by Loan
Parties, together with (i) the actions taken on or prior to the date hereof
pursuant to subsections 4.1I, 4.1J, 6.8 and 6.9 or contemplated to be taken
thereby and (ii) the delivery to Collateral Agent of any Pledged Collateral not
delivered to Collateral Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral shall have been
so delivered) are effective to create in favor of Collateral Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the Collateral, and, except as
otherwise set forth in the Collateral Documents, all filings and other actions
necessary or desirable to perfect and maintain the perfection and First Priority
status of such Liens have been duly made or taken and remain in full force and
effect (other than the filing of UCC financing continuation statements).
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Collateral Agent pursuant to
any of the Collateral Documents or (ii) the exercise by Collateral Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
5.16A and except as may be required, in connection with the disposition of any
Pledged Collateral, by laws generally affecting the offering and sale of
securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed in
favor of Collateral Agent as contemplated by subsection 5.16A, (i) no effective
UCC financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office, except with respect to Permitted Encumbrances and Liens permitted under
subsection 7.2A, and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
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E. INFORMATION REGARDING COLLATERAL. All information supplied to
Collateral Agent or Administrative Agent by or on behalf of any Loan Party with
respect to any of the Collateral (in each case taken as a whole with respect to
any particular Collateral) is accurate and complete in all material respects as
of the date supplied.
5.17 RELATED AGREEMENTS.
------------------
A. DELIVERY OF RELATED AGREEMENTS. As of the Closing Date, Company has
delivered to Lenders complete and correct copies of each Related Agreement and
of all exhibits and schedules thereto.
B. SELLER'S WARRANTIES. Except to the extent otherwise set forth herein
or in the schedules hereto, each of the representations and warranties given by
the Company and those parties defined as "Current Owners" to those parties
defined as "Purchasers" in the Recapitalization Agreement is true and correct as
of the date hereof (or as of any earlier date to which such representation and
warranty specifically relates) and will be true and correct as of the Closing
Date (or as of such earlier date, as the case may be), in each case subject to
the qualifications set forth therein and in the schedules to the
Recapitalization Agreement, in each case except to the extent that the cause of
any failure of any such representation or warranty to be true and correct,
either individually or in the aggregate with the causes of the failures of any
other such representations and warranties to be true and correct, would not
reasonably be expected to have a Material Adverse Effect.
C. SURVIVAL. Notwithstanding anything in the Recapitalization Agreement
to the contrary, the representations and warranties of the Current Owners set
forth in subsection 5.17B shall, solely for purposes of this Agreement, survive
the Closing Date for the benefit of Lenders.
5.18 DISCLOSURE.
----------
All representations and warranties of Holdings or any of its Subsidiaries
and all information contained in the Confidential Information Memorandum or in
any Loan Document or Related Agreement or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries (other than budgets, projections or pro forma financial
information) for use in connection with the transactions contemplated by this
Agreement, taken as a whole, are true and correct in all material respects as of
the date made and do not omit to state a material fact (known to Holdings or
Company, in the case of any document not furnished by it) necessary in order to
make the statements contained herein or therein (taken as a whole) not
materially misleading as of the date made in light of the circumstances in which
the same were made as at the time made. Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by Holdings and Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections may materially differ from the projected
results. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to Holdings or Company (other than matters of a general
economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have not been disclosed
herein or in such
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other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.19 SUBORDINATION OF PERMITTED SELLER NOTES AND SHAREHOLDER SUBORDINATED NOTES.
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The subordination provisions of any Permitted Seller Notes and Shareholder
Subordinated Notes or other Subordinated Indebtedness are enforceable against
the holders thereof, and the Loans and other Obligations hereunder are and will
be within the definition of "Senior Indebtedness" or "Senior Debt", or similar
term, as applicable, included in such provisions.
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS
Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Holdings and Company shall perform, and shall cause each of their Subsidiaries
to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
--------------------------------------
Holdings will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent, with sufficient copies
for each Lender (and Administrative Agent will, after receipt thereof, deliver
to each Lender):
(i) Monthly Financials: as soon as available and in any event within
------------------
30 days after the end of each month ending after the date that is one month
after the Closing Date, the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such month and the related consolidated
statements of income of Holdings and its Subsidiaries, (together with
information relating to Consolidated Capital Expenditures and Asset Sales
made during such month), for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the correspond ing figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, to the extent
prepared on a monthly basis, all in reasonable detail and certified by the
principal financial officer or principal accounting officer of Holdings
that they fairly present, in all material respects, the financial condition
of Holdings and its Subsidiaries as at the dates indicated and the results
of their operations for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments and the absence of footnotes;
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(ii) Quarterly Financials: as soon as available and in any event
--------------------
within 50 days after the end of each Fiscal Quarter, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income and cash flows of
Holdings and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, all in reasonable detail and certified by the principal
financial officer or principal accounting officer of Holdings that they
fairly present, in all material respects, the financial condition of
Holdings and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments and the
absence of footnotes, and (b) a narrative report describing the operations
of Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter; provided, however, that Company may deliver to Administrative
-------- -------
Agent in lieu of such narrative report copies of the unaudited quarterly
report filed by Holdings with the Securities and Exchange Commission on
Form 10-Q in respect of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
-------------------
within 105 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income, partner's capital,
and cash flows of Holdings and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial statements,
all in reasonable detail and certified by the principal financial officer
or principal accounting officer of Holdings that they fairly present, in
all material respects, the financial condition of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, (b) a narrative report
describing the operations of Holdings and its Subsidiaries in the form
prepared for presentation to senior management for such Fiscal Year,
provided, however, that Company may deliver to Administrative Agent in lieu
-------- -------
of such narrative report copies of the report filed by Holdings with the
Securities and Exchange Commission on Form 10-K in respect of such Fiscal
Year, and (c) in the case of such consolidated financial statements, a
report thereon of an Independent Public Accountant, which report shall be
unqualified, shall express no doubts about the ability of Holdings and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects,
the consolidated financial position of Holdings and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and (d) to the
extent available, information reflecting utilization rates of the Cranes
and Lifting Equipment for such period;
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(iv) Officers' and Compliance Certificates: together with each
-------------------------------------
delivery of financial statements of Holdings and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
Holdings stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Holdings and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Holdings has taken, is taking and proposes to take with respect thereto;
and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
(except in respect of monthly financial statements) with the restrictions
contained in Section 7, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable
accounting period;
(v) Reconciliation Statements: if, as a result of any change in
-------------------------
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Holdings and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies been
made, then (1) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, consolidated financial statements of Holdings and
its Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such periods, and
(2) together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, a written statement of the principal accounting officer or
principal financial officer of Holdings setting forth the differences
(including any differences that would affect any calculations relating to
the financial covenants set forth in subsection 7.6) which would have
resulted if such financial statements had been prepared without giving
effect to such change;
(vi) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements of Holdings and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default of a financial nature has come to their attention and, if
such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
--------
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that would
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not be disclosed in the course of their audit examination, and (c) stating
that based on their audit examination nothing has come to their attention
that causes them to believe either or both that the information contained
in the certificates delivered therewith pursuant to sub division (iv) above
is not correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of subdivision (iv) above for
the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports
submitted to Holdings by inde pendent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
------------------------------
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Holdings to analysts
or its security holders or by any Subsidiary of Holdings to analysts or its
security holders other than Holdings or another Subsidiary of Holdings, (b)
all regular and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if any, filed by
Holdings or any of its Subsidi aries with any securities exchange or with
the Securities and Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other written,
publicly announced notices by Holdings or any of its Subsidiaries
concerning material developments in the business of Holdings or any of its
Subsidiaries;
(ix) Events of Default, etc.: promptly upon any Responsible Officer
-----------------------
of Holdings or Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a claimed
Event of Default or Potential Event of Default, (b) that any Person has
given any notice to Holdings or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or condition of the type
referred to in subsection 8.2, (c) of any condition or event that would be
required to be disclosed in a current report filed by Holdings or Company
with the Securities and Exchange Commission on Form 8-K (Items 1, 2, 4, 5
and 6 of such Form as in effect on the date hereof) if Holdings or Company
were required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Holdings or Company has taken, is taking and proposes to take with respect
thereto;
(x) Litigation or Other Proceedings: promptly upon any Responsible
-------------------------------
Officer of Holdings or Company obtaining knowledge of (a) the institution
of, or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental
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investigation or arbitration against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries
(collectively, "PROCEEDINGS") not previously disclosed in writing by
Holdings or Company to Lenders or (b) any material development in any
Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Holdings or Company to enable Lenders and their
counsel to evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the occurrence of
------------
or forthcoming occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
-------------
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan, as Administrative Agent shall reasonably request; (b) all notices
received by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA
Event; and (c) copies of such other documents or governmental reports or
filings relating to any Employee Benefit Plan as Administrative Agent shall
reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
---------------
later than 30 days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year and the next succeeding
Fiscal Year (the "FINANCIAL PLAN" for such Fiscal Years), including (a) a
forecasted consolidated balance sheet and forecasted consolidated
statements of income together with forecasted asset sales and capital
expenditures (prepared on a monthly basis for such Fiscal Year and on an
annual basis for the succeeding Fiscal Year) and annual cash flows of
Holdings and its Subsidiaries for each such Fiscal Year, together with a
pro forma Compliance Certificate for the first such Fiscal Year and an
--- -----
explanation of the assumptions on which such forecasts are based, and (b)
such other information regarding such projections as Administrative Agent
may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the last
---------
day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material changes made to insurance
coverage maintained as of the Closing Date or the date of the most recent
such report by Holdings and its Subsidiaries;
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(xv) New Subsidiaries: promptly upon any Person becoming a
----------------
Subsidiary of Holdings, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Holdings
and (b) the ownership and debt and equity capitalization of such
Subsidiary;
(xvi) Material Contracts: promptly, and in any event within ten
------------------
Business Days after any Material Contract of Holdings or any of its
Subsidiaries is terminated prior to its scheduled term or amended in a
manner that is materially adverse to Holdings or such Subsidiary, as the
case may be, or any new Material Contract is entered into, a written
statement describing such event with copies of such material amendments or
new contracts, and an explanation of any actions being taken with respect
thereto;
(xvii) Borrowing Base Certificate and Forward Commitments.
--------------------------------------------------
Commencing with the monthly accounting period beginning August 1, 1998, as
soon as available and in any event within 15 days after the end of each
monthly accounting period (ending on the last day of each calendar month),
furnish to the Administrative Agent (i) a Borrowing Base Certificate as at
the last day of such accounting period and (ii) information regarding any
forward purchase commitments for any Rental Equipment then in effect; and
(xviii) Other Information: with reasonable promptness, such other
-----------------
information and data with respect to Holdings or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent.
6.2 CORPORATE/PARTNERSHIP EXISTENCE, ETC.
-------------------------------------
Except as permitted under subsection 7.7, Holdings will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate or partnership existence, as applicable, and all rights and
franchises material to its business; provided, however that neither Holdings nor
-------- -------
any of its Subsidiaries shall be required to preserve any such right or
franchise if the Board of Directors of Holdings or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of Holdings or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to Holdings, such
Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
----------------------------------------------
A. Holdings will, and will cause each of its Subsidiaries to, pay all
federal, state and other material taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
material sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided that no such
--------
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(1) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien
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against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such charge or claim.
B. Holdings will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Holdings, General Partner or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
--------------------------------------------------------
INSURANCE/CONDEMNATION PROCEEDS.
-------------------------------
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained, at a general maintenance
standard at least equal to that in existence as of the Closing Date, in good
repair, working order and condition, ordinary wear and tear and damage by
casualty excepted, all material properties used or useful in the business of
Company and its Subsidiaries (including all Intellectual Property) and from time
to time will make or cause to be made all repairs, renewals and replacements
thereof which are useful, customary or appropriate for companies in similar
businesses; and Company will, and will cause each of its Subsidiaries to, keep
all such material properties, including, without limitation all Rental Equipment
in the United States, other than (i) assets located in the United States Virgin
Islands and (ii) other assets located in (y) Canada or a Caribbean jurisdiction
or (z) other jurisdictions; provided that the total value of such assets
contributed or otherwise financed by Company or a Permitted Domestic Subsidiary
with respect to a Permitted Foreign Subsidiary or invested by Company in a
Permitted Domestic Subsidiaries in such foreign jurisdictions identified in the
preceding clause (ii) above shall not exceed 3% of consolidated total assets of
Company and its Subsidiary and the total value of assets located in foreign
jurisdictions identified in the preceding clause (ii) (z) shall not exceed 1% of
consolidated total assets of Company and its Subsidiaries.
B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of Company
and its Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for Persons similarly situated in the industry. Without
limiting the generality of the foregoing, Company will maintain or cause to be
maintained (i) flood insurance with respect to each Flood Hazard Property that
is located in a community that participates in the National Flood Insurance
Program, in each case in compliance with any applicable regulations of the Board
of Governors of the Federal Reserve System, and (ii) replacement value property
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are in accordance with normal industry practice. Each such policy of
insurance related to property damage or casualty shall (a) name Collateral Agent
for the benefit of Lenders as an additional insured thereunder as its interests
may appear and (b) in the case of each business interruption and casualty
insurance policy, contain a loss payable clause or endorsement, reasonably
satisfactory in form and substance to Collateral Agent, that names Collateral
Agent for the benefit of Lenders and lenders under the Term Loan Credit
Agreement as the loss payee thereunder for any covered loss
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in excess of the greater of y) $7,500,000 or z) 2% of consolidated total assets
of Company and its Subsidiaries in any Fiscal Year and provides for at least 30
days prior written notice to Collateral Agent of any modification or
cancellation of such policy.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Casualty Insurance/Condemnation Proceeds. Within ten Business
----------------------------------------
Days of receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds, (a) so long as no Event of Default shall
have occurred and be continuing, and so long as the aggregate amount of Net
Insurance/Condemnation Proceeds received in any Fiscal Year does not exceed
an amount equal to 2% of the consolidated total assets of Holdings and its
Subsidiaries, Company may deliver to Administrative Agent an Officers'
Certificate setting forth (1) that portion of such Net
Insurance/Condemnation Proceeds (the "PROPOSED INSURANCE REINVESTMENT
PROCEEDS") that Company or such Subsidiary intends to use (or enter into a
contract to use) within 365 days of such date of receipt to pay or
reimburse the costs of repairing, restoring or replacing the assets in
respect of which such Net Insurance/Condemnation Proceeds were received or
to reinvest in assets used in the ordinary course of the business and (2)
the proposed use of the Proposed Insurance Reinvestment Proceeds and such
other information with respect to such proposed use as Administrative Agent
may reasonably request, and Company shall, or shall cause one or more of
its Subsidiaries to, promptly and diligently apply such Proposed Insurance
Reinvestment Proceeds to pay or reimburse the costs of repairing, restoring
or replacing the assets in respect of which such Proposed Insurance
Reinvestment Proceeds were received, or to reinvest in assets used in the
ordinary course of business of Company or, to the extent the aggregate
amount of Net Insurance/Condemnation Proceeds received in any Fiscal Year
exceeds an amount equal to 2% of the consolidated assets of Holdings and
its Subsidiaries and are not so applied, to prepay the Loans as provided in
subsection 2.4A(iii)(b), and (b) if an Event of Default shall have occurred
and be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans as provided in
subsection 2.4A(iii)(b).
(ii) Net Insurance/Condemnation Proceeds Received by Collateral Agent.
----------------------------------------------------------------
(a) Within ten Business Days of receipt by Collateral Agent of any Net
Insurance/Con demnation Proceeds as loss payee, if and to the extent
Company or Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them directly) to
prepay the Loans pursuant to clause (i) above, Collateral Agent shall, and
Company hereby authorizes Collateral Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans as provided in
subsection 2.4A(iii)(b), and (b) within ten Business Days of receipt by
Collateral Agent of any Net Insurance/Condemnation Proceeds as loss payee
to the extent the foregoing clause (a) does not apply, Collateral Agent
shall deliver such Net Insurance/Condemnation Proceeds to Company, and
Company shall, or shall cause one or more of its Subsidiaries to, apply
such Net Insurance/Condemnation Proceeds to the costs of repairing,
restoring, or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or to reinvestment in assets
used in the ordinary course of the business.
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6.5 INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE; LENDER
----------------------------------------------------------------------
MEETING; INTERNAL AUDIT; SUPPLEMENTAL APPRAISAL.
-----------------------------------------------
A. INSPECTION RIGHTS. Holdings shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Holdings or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Holdings or Company may, if they so choose, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested; provided, that each Lender shall coordinate with Administrative Agent
--------
the frequency and timing of such visits and inspections so as to reasonably
minimize the burden imposed on Holdings and its Subsidiaries; and provided
--------
further, that, so long as no Potential Event of Default or Event of Default
- -------
shall have occurred and be continuing, there shall be no more than one such
visit by Lenders in any calendar month.
B. AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE. Holdings shall, and
shall cause each of its Subsidiaries to, permit any authorized representatives
designated by Administrative Agent to (i) conduct one audit of all books,
records, Parts and Supplies Inventory and accounts receivable of Loan Parties
during each twelve-month period after the Closing Date, each such audit to be in
scope and substance reasonably satisfactory to Administrative Agent, and (ii) to
review the results of the initial audit referred to in subsection 6.5D, all upon
reasonable notice and at such reasonable times during normal business hours as
may reasonably be requested.
C. LENDER MEETING. Company will, upon the request of Administrative
Agent or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Holdings and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
D. INTERNAL AUDIT. Once each calendar year, Company will provide to
Administrative Agent a copy of Company's internally prepared audit of Eligible
Cranes and Lifting Equipment and Eligible Trucks and Trailers which shall
include physical confirmation of the existence and appropriate titling of each
item of such equipment with an original purchase price or Orderly Liquidation
Value in excess of $500,000.
E. SUPPLEMENTAL APPRAISAL. Once each calendar year, Company will deliver
to Administrative Agent a Supplemental Appraisal.
6.6 COMPLIANCE WITH LAWS, ETC.
--------------------------
Holdings shall comply, and shall cause each of its Subsidiaries to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all Environmental Laws), except where
noncompliance would not reasonably be expected to cause, individually or in the
aggregate, a Material Adverse Effect.
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6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; ACTIONS
-----------------------------------------------------------------
REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS AND
-------------------------------------------------------------------
VIOLATIONS OF ENVIRONMENTAL LAWS.
--------------------------------
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Holdings and Company agree
that Administrative Agent may, (i) at any time a fact, event or condition arises
that, in Administrative Agent's reasonable discretion, Administrative Agent
determines could give rise to environmental liabilities that would materially
adversely affect any material Facility, retain, at Company's expense, an
independent professional consultant to review any environmental audits,
investigations, analyses and reports relating to Hazardous Materials at such
Facility prepared by or for Company and (ii) in the event (a) Administrative
Agent reasonably believes that Company or Holdings has breached any
representation, warranty or covenant contained in subsection 5.6 (with respect
to Environmental Claims or Environmental Laws), 5.13, 6.6 (with respect to
Environmental Laws) or 6.7 in any material respect or that there has been a
material violation of Environmental Laws at any Facility or by Holdings or any
of its Subsidiaries at any other location conduct its own investigation of such
breach or violation or (b) an Event of Default has occurred and is continuing,
conduct its own investigation of any Facility; provided that, in the case of any
--------
Facility no longer owned, leased, operated or used by Holdings or any of its
Subsidiaries, Company and Holdings shall only be obligated to use their
reasonable best efforts to obtain permission for Administrative Agent's
professional consultant to conduct an investigation of such Facility. For
purposes of conducting an investigation pursuant to clause (ii) of the preceding
sentence, Company and Holdings hereby grant to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Holdings or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith (to the extent, at any Facility
leased by Holdings or any of its Subsidiaries, such actions are permitted by the
owner of such Facility). Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Holdings and 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 such Facility or
to cause any damage or loss to any property at such Facility. Holdings, Company
and Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
subsection 6.7A will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions, to monitor and
police the Loans and to protect Lenders' security interests, if any, created by
the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Company with the understanding that Company and Holdings acknowledge
and agree that (x) they will indemnify and hold harmless Administrative Agent
and each Lender from any costs, losses or liabilities relating to Holdings' or
Company's use of or reliance on such report, (y) neither Administrative Agent
nor any Lender makes any representation or warranty with respect to such report,
and (z) by delivering such report to Company, neither Administrative Agent nor
any Lender is requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
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B. ENVIRONMENTAL DISCLOSURE. Company will deliver to Administrative
Agent, with sufficient copies for each Lender (and Administrative Agent will,
after receipt thereof, deliver to each Lender):
(i) Environmental Audits and Reports. As soon as practicable
--------------------------------
following receipt thereof, copies of all material environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Holdings or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to environmental matters at any Facility that could reasonably
be expected to have a Material Adverse Effect.
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
--------------------------------------------------
upon the occurrence thereof, written notice describing in reasonable detail
(a) any Release required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws
unless such Release could not reasonably be expected to result in a
Material Adverse Effect, (b) any remedial action taken by Company, Holdings
or any other Person in response to (1) any Hazardous Materials Activities
the existence of which would reasonably be expected to result in one or
more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims of which Holdings
or any of its Subsidiaries has notice that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect, and (c) Company's or Holdings' discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any material
Facility that would reasonably be expected to cause such material Facility
or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws, unless such restrictions could not reasonably be
expected to have a Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
-----------------------------------------------------
Releases, Etc. As soon as practicable following the sending or receipt
-------------
thereof by Holdings or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, would reasonably be expected to give rise
to a Material Adverse Effect, (b) any Release required to be reported to
any federal, state or local governmental or regulatory agency unless such
Release could not reasonably be expected to result in a Material Adverse
Effect, and (c) any request for information from any governmental agency
that suggests such agency is investigating whether Holdings or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity unless such Hazardous Materials Activity could not reasonably be
expected to have a Material Adverse Effect.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
--------------------------------------------------------------
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to (1) expose Holdings or
any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability of Holdings or any of its
Subsidiaries to maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for
106
<PAGE>
their respective operations and (b) any proposed action to be taken by
Holdings or any of its Subsidiaries to modify current operations in a
manner that would reasonably be expected to subject Holdings or any of its
Subsidiaries to any material additional obligations or requirements under
any Environmental Laws where such obligations or reimbursements would
reasonably be expected to have a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
-----------------
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. HOLDINGS' AND COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS
ACTIVITIES, ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) Remedial Actions Relating to Hazardous Materials Activities.
-----------------------------------------------------------
Holdings shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim that would, in either case, reasonably be expected to
have a Material Adverse Effect. In the event Holdings or any of its
Subsidiaries undertakes any such action with respect to any Hazardous
Materials, Holdings or such Subsidiary shall conduct and complete such
action in material compliance with all applicable Environmental Laws and in
accordance an all material respects with the policies, orders and
directives of all federal, state and local governmental authorities except
when, and only to the extent that, Holdings' or such Subsidiary's liability
with respect to such Hazardous Materials Activity is being contested in
good faith by Holdings or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
--------------------------------------------------------------
Environmental Laws. Holdings shall promptly take, and shall cause each of
------------------
its Subsidiaries promptly to take, any and all reasonable actions necessary
to (i) cure any violation of applicable Environmental Laws by Holdings or
its Subsidiaries where such violation would reasonably be expected to have
a Material Adverse Effect and (ii) make an appropriate response to any
Environmental Claim against Holdings or any of its Subsidiaries (of which
Holdings or any of its Subsidiaries has notice) where such Environmental
Claim would reasonably be expected to have a Material Adverse Effect, and
discharge any material obligations it may have to any Person thereunder.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
-----------------------------------------------------------------
DOCUMENTS BY SUBSIDIARIES AND FUTURE SUBSIDIARIES.
-------------------------------------------------
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Subsidiary which is an Excluded Subsidiary as
of the Closing Date ceases to be an Excluded Subsidiary or any Person becomes a
Subsidiary (other than an Excluded Subsidiary) of Company after the date hereof,
Company will promptly notify Administrative Agent of that fact and cause such
Subsidiary to execute and deliver to Administrative Agent counterparts of the
107
<PAGE>
Subsidiary Guaranty and the Pledge and Security Agreement and to take all such
further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsection 4.1J) as may be reasonably necessary or, in the reasonable opinion of
Administrative Agent, desirable to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company shall
deliver to Administrative Agent, together with such Loan Documents pursuant to
clause A above, (i) (y) if such Subsidiary is a corporation (a) certified copies
of such Subsidiary's Certificate or Articles of Incorporation, together with a
good standing certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which such Person is qualified as a
foreign corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (b) a copy of such Subsidiary's Bylaws, certified by its
secretary or an assistant secretary as of a recent date prior to their delivery
to Administrative Agent, (c) a certificate executed by the corporate secretary
or an assistant corporate secretary of such Subsidiary as to (i) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such Loan Documents
are in full force and effect and have not been modified or amended and (ii) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, and (ii) (z) if such Subsidiary is a limited partnership, (a) from or
with respect to such Subsidiary's General Partner, each of the items required to
be delivered under item (a) of clause (x) above with respect to such General
Partner, if it is a corporation, (b) certified copies of its Certificate of
Limited Partnership, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation or formation, each dated
a recent date prior to their delivery to Administrative Agent, and (c) copies of
its limited partnership agreement, certified as true, correct and in full force
and effect as of the date of its delivery to Administrative Agent, by the
corporate secretary or an assistant secretary of its general partner or an
officer of its limited partner, and (iii) to the extent requested by
Administrative Agent, a favorable opinion of counsel to such Subsidiary, in form
and substance reasonably satisfactory to Administrative Agent and its counsel,
as to (a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of such Loan Documents against such Subsidiary, (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be reasonably satisfactory in
form and substance to Administrative Agent and its counsel.
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
-------------------------------------------------------------------
PROPERTY COLLATERAL.
-------------------
A. CONFORMING LEASEHOLD INTERESTS. If Holdings or any of its
Subsidiaries acquires any Material Leasehold Property, Holdings shall use
commercially reasonable efforts to, or shall cause such Subsidiary to use
commercially reasonable efforts to, cause such Leasehold Property to be a
Conforming Leasehold Interest and Holdings shall deliver evidence of the
foregoing to Administrative Agent.
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<PAGE>
B. ADDITIONAL MORTGAGES, ETC. From and after the Closing Date, in the
event that (i) Holdings or any Subsidiary Guarantor acquires any fee interest in
real property, except any real property acquired or refinanced with the proceeds
of any Additional Secured Indebtedness, or any Material Leasehold Property or
(ii) at the time any Person becomes a Subsidiary Guarantor, such Person owns or
holds any fee interest in any Material Real Property Asset or any Material
Leasehold Property, in either case excluding any such Material Real Property
Asset or Material Leasehold Property the encumbrancing of which requires the
consent of any applicable lessor or (in the case of clause (ii) above) then-
existing senior lienholder, where Holdings and its Subsidiaries are unable,
after exercising commercially reasonable efforts, to obtain such lessor's or
senior lienholder's consent (any such non-excluded Material Real Property Asset
described in the foregoing clause (i) or (ii) being an "ADDITIONAL MORTGAGED
PROPERTY"), Holdings or such Subsidiary Guarantor shall deliver to
Administrative Agent, as soon as practicable after such Person acquires such
Additional Mortgaged Property or becomes a Subsidiary Guarantor, as the case may
be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage
-------------------
(an "ADDITIONAL MORTGAGE"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
-------------------
Loan Party, in form and substance satisfactory to Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such
Loan Party of such Additional Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the enforceability
of such Additional Mortgage and such other matters (including any matters
governed by the laws of such state regarding personal property security
interests in respect of any Collateral related to such Additional Mortgaged
Property) as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent;
(iii) Title Insurance. (a) If required by Administrative Agent, an
---------------
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "ADDITIONAL MORTGAGE POLICY") issued by the Title Company with
respect to such Additional Mortgaged Property, in an amount reasonably
satisfactory to Administrative Agent, insuring fee simple title to, or a
valid leasehold interest in, such Additional Mortgaged Property vested in
such Loan Party and assuring Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien on
such Additional Mortgaged Property, subject only to standard survey
exceptions, which Additional Mortgage Policy (1) shall include an
endorsement for mechanics' liens, for future advances (in each case, if
available) under this Agreement and for any other matters reasonably
requested by Administrative Agent and (2) shall provide for affirmative
insurance and such reinsurance as Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably satisfactory
to Administrative Agent; and (b) evidence satisfactory to Administrative
Agent that such Loan Party has (i) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Additional Mortgage
109
<PAGE>
Policy and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Additional Mortgage Policy and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Additional Mortgage in the
appropriate real estate records; provided, however, that Administrative
Agent shall allow for such reasonable revisions to the applicable Mortgage
and shall otherwise take such steps as are reasonable and customary to
minimize recording, mortgage recording, stamp, documentary and intangible
taxes, at Company's cost;
(iv) Title Report. If no Additional Mortgage Policy is required with
------------
respect to such Additional Mortgaged Property, a title report issued by the
Title Company with respect thereto, last updated not more than 30 days
prior to the date such Additional Mortgage is to be recorded and reasonably
satisfactory in form and substance to Administrative Agent;
(v) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(vi) Matters Relating to Flood Hazard Properties. (a) To the extent
-------------------------------------------
reasonably requested by the Administrative Agent, evidence, which may be in
the form of a surveyor's note on a survey or a report from a flood hazard
search firm, as to (1) whether such Additional Mortgaged Property is a
Flood Hazard Property and (2) if so, whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgement of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program,
evidence that Holdings or Company has obtained flood insurance in respect
of such Flood Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve System; and
(vii) Environmental Audit. If required by Administrative Agent,
-------------------
reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent and prepared by environmental
consultants reasonably satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Holdings or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property.
C. REAL ESTATE APPRAISALS. To the extent reasonably requested by the
Administrative Agent, Holdings shall, and shall cause each of its Subsidiaries
to, permit an independent real estate appraiser reasonably satisfactory to
Administrative Agent, upon reasonable notice, to visit and inspect any
Additional Mortgaged Property for the purpose of preparing an appraisal of such
Additional Mortgaged Property satisfying the requirements of any applicable laws
and regulations
110
<PAGE>
(in each case to the extent required under such laws and regulations as
determined by Administrative Agent in its discretion).
6.10 INTEREST RATE PROTECTION.
------------------------
At all times after the date which is 90 days after the Closing Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the Loans, each such Interest Rate Agreement to be for a term and in
form and substance reasonably satisfactory to Administrative Agent, which
Interest Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate
Component (as hereinafter defined) of the interest costs to Company with respect
to an aggregate notional principal amount of not less than $150,000,000 (based
on the assumption that such notional principal amount was a Eurodollar Rate Loan
with an Interest Period of three months) to a rate equal to not more than 8.0%
per annum. For purposes of this subsection 6.10, the term "UNADJUSTED
EURODOLLAR RATE COMPONENT" means that component of the interest costs to Company
in respect of a Eurodollar Rate Loan that is based upon the rate obtained
pursuant to clause (i) of the definition of Adjusted Eurodollar Rate.
6.11 POST-CLOSING DELIVERIES.
-----------------------
Company shall cause any actions set forth on Schedule 6.11 annexed hereto
-------------
to be taken within the time period(s) specified on such Schedule 6.11 and in
-------------
form and substance reasonably satisfactory to Agents.
6.12 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.
--------------------------------------------
Company, and shall cause each of its Subsidiaries to, use and maintain its
Deposit Accounts and cash management systems in a manner reasonably satisfactory
to Administrative Agent and comply with limitations on cash on hand, all as set
forth on Schedule 6.12 annexed hereto.
-------------
6.13 YEAR 2000.
---------
No later than December 31, 1998, Company shall perform all acts reasonably
necessary to ensure that Company and its Subsidiaries become Year 2000
Compliant. Such acts shall include, to the extent reasonably necessary to
become Year 2000 Compliant, performing a comprehensive review and assessment of
all of Company's systems and adopting a detailed plan, with itemized budget, for
the remediation, monitoring and testing of such systems. Company shall,
immediately upon request, provide to Administrative Agent such certifications or
other evidence of Company's compliance with the terms of this paragraph as
Administrative Agent may from time to time require.
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS
Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations
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(other than inchoate indemnification obligations with respect to claims, losses
or liabilities which have not yet arisen and are not yet due and payable) and
the cancellation or expiration of all Letters of Credit, unless Requisite
Lenders shall otherwise give prior written consent, Holdings and Company shall
perform, and shall cause each of their Subsidiaries to perform, all covenants in
this Section 7.
7.1 INDEBTEDNESS.
------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Subsidiaries may become and remain liable with
respect to (a) Indebtedness in respect of Capital Leases and (b)
Indebtedness secured by Liens permitted under subsection 7.2A(viii);
provided that the aggregate amount of Indebtedness described in clauses (a)
--------
and (b), together with the amount of any purchase money Indebtedness and
Capital Lease obligations of the type permitted under subsection 7.1(ix),
shall not exceed $10,000,000 at any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any wholly-owned Permitted Subsidiary, and any wholly-owned
Permitted Subsidiary may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Subsidiary; provided that
--------
(a) all such intercompany Indebtedness shall be evidenced by promissory
notes, (b) all such intercompany Indebtedness owed by Company to any such
Subsidiary shall be subordinated in right of payment to the payment in full
of the Obligations pursuant to the terms of the applicable promissory notes
or an intercompany subordination agreement, (c) any payment by any such
Subsidiary of Company under any guaranty of the Obligations shall result in
a pro tanto reduction of the amount of any intercompany Indebtedness owed
--- -----
by such Subsidiary to Company or to any of such Subsidiary Guarantors for
whose benefit such payment is made, and (d) in the case of any Indebtedness
incurred by a Permitted Domestic Subsidiary or Permitted Foreign
Subsidiary, such Indebtedness is incurred in accordance with the
definitions thereof;
(v) Holdings and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by the Term Loan Credit Documents;
(vi) Holdings and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by, and with respect to guaranties of,
the Senior Notes and the Senior Discount Debentures;
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(vii) Holdings may become and remain liable with respect to
Shareholder Subordinated Notes issued in lieu of cash payments permitted
under subsection 7.5 to repurchase Securities of Holdings held by
terminated employees and officers;
(viii) Holdings or Company may become and remain liable with respect
to Permitted Seller Notes issued as consideration in Permitted
Acquisitions; provided that the aggregate principal amount of Permitted
--------
Seller Notes issued by both Holdings and Company shall not exceed
$10,000,000 at any time outstanding; provided that Holdings may issue
Permitted Seller Notes in amounts in excess of that otherwise permitted
under this clause (viii) so long as such Permitted Seller Notes shall not
provide for any cash call or cash payment of principal or interest prior to
the final maturity of the Loans;
(ix) Subject to the applicable restrictions of subsections 7.1(iii)
and 7.1(xv), Company or any Permitted Subsidiary acquired pursuant to a
Permitted Acquisition may become or remain liable with respect to
Indebtedness of a Subsidiary of Company existing at the time of acquisition
by Company or a Subsidiary of a Subsidiary or assets pursuant to a
Permitted Acquisition; provided that (a) such Indebtedness was not incurred
--------
in connection with or in anticipation of such Permitted Acquisition, (b)
such Indebtedness does not constitute debt for borrowed money (other than
debt for borrowed money incurred in connection with industrial revenue or
industrial development bond financings), it being understood and agreed
that Capital Lease obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (ix) and (c)
at the time of such Permitted Acquisition such Indebtedness does not exceed
10% of the total value of the assets of the Subsidiary so acquired, or of
the assets so acquired, as the case may be; provided, however, that (a) the
-------- -------
aggregate amount of any such Capital Lease obligations and purchase money
Indebtedness, together with the aggregate amount of other Indebtedness of
the type permitted under subsection 7.1(iii), in each case at any time
outstanding, shall not exceed the maximum amount set forth in such
subsection, and (ii) the aggregate amount of any such Indebtedness other
than Capital Lease obligations and purchase money Indebtedness, together
with other Indebtedness of the type permitted under subsection 7.1(xv), in
each case at any time outstanding, shall not exceed the maximum amount set
forth in such subsection;
(x) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 7.1 annexed hereto;
------------
(xi) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness incurred by the Company or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, or from guarantees or letters of
credit, surety bonds or performance bonds securing the performance of the
Company or any such Subsidiary pursuant to such agreements, in connection
with acquisitions or dispositions of any business, assets or Subsidiary of
the Company or any of its Subsidiaries;
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(xii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness which may be deemed to exist pursuant to any
guarantees, performance, surety, statutory, appeal or similar obligations
obtained in the ordinary course of business;
(xiii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(xiv) Holdings may become and remain liable with respect to
Indebtedness of Holdings in respect of any Restricted Junior Payment made
to it and permitted hereunder to the extent such Restricted Junior Payment
is recharacterized as a loan instead of a distribution;
(xv) Company and Subsidiaries may become and remain liable with
respect to Indebtedness not otherwise permitted under this subsection;
provided that the aggregate principal amount of such Indebtedness, together
--------
with the amount of any Indebtedness of the type permitted under subsection
7.1(ix) (other than Capital Lease obligations and purchase money
Indebtedness), shall not exceed $20,000,000 at any time outstanding;
provided that, any portion of such Indebtedness which is secured (x) shall
--------
not exceed $10,000,000 in the aggregate at any one time outstanding, (y)
shall only be secured by assets acquired after the Closing Date or assets
for which the Collateral Agent has agreed to release the Lien of the
Collateral Documents, provided, further that, in no event shall such assets
-------- -------
be any Collateral included in the Borrowing Base Amount, and (z) shall have
terms and provisions no more favorable to the Lender(s) of such
Indebtedness in any material respect to the term and provisions of this
Agreement and the other Loan Documents (any such secured Indebtedness, the
"ADDITIONAL SECURED INDEBTEDNESS") and; provided still further that, any
-------- ----- -------
such Indebtedness outstanding under this clause (xv) in excess of
$10,000,000 shall be unsecured and subordinated to the Loans and the Term
Loans upon terms reasonably acceptable to the Administrative Agent and no
principal payments of such Indebtedness shall be made during the term of
the Loans or the Term Loan;
(xvi) Subsidiaries of Company may become and remain liable with
respect to Indebtedness consisting of a converted equity Investment by
Company or another Subsidiary of Company in such Subsidiaries; provided
--------
that the underlying equity Investment was permitted hereunder at the time
of such conversion; and
(xvii) liabilities of Company or Permitted Subsidiaries under
Permitted Earn-Out Agreements.
Notwithstanding anything herein to the contrary, obligations incurred by
Company and its Subsidiaries in connection with the purchase of new or used
equipment in the ordinary course of business by the Company that is financed on
terms of six (6) months or less shall not be deemed Indebtedness for the purpose
of this subsection 7.1.
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7.2 LIENS AND RELATED MATTERS.
-------------------------
A. PROHIBITION ON LIENS. Holdings shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens created hereunder and pursuant to the Collateral
Documents in favor of the Collateral Agent for the benefit of the Lenders
and/or the lenders under the Term Loan Credit Agreement securing Loan
Parties' obligations under this Agreement, the Term Loan Credit Agreement
and/or under Hedge Agreements with any such Lenders and/or lenders or their
respective affiliates; provided that such Liens for the benefit of the
--------
lenders under this Agreement shall at all times secure the Obligations on a
First Priority basis;
(iii) Liens arising in connection with Capital Leases permitted under
subsection 7.1(iii)(a) and Section 7.9; provided that no such Lien shall
--------
extend to or cover any Collateral or assets other than the assets subject
to such Capital Leases;
(iv) Liens of landlords arising under lease contracts in the
ordinary course of business;
(v) Liens consisting of rights of set-off and off-set of a
customary nature or bankers' liens on amounts of deposit, whether arising
by contract or operation of law, incurred in the ordinary course of
business;
(vi) Liens solely on any cash earnest money deposits made by Company
or any of its Subsidiaries in connection with any letter of intent or
purchase agreement entered into by it;
(vii) Liens incurred in connection with the purchase or shipping of
goods or assets on the related assets and proceeds thereof in favor of the
seller or shipper of such goods or assets;
(viii) Liens securing Indebtedness permitted by subsection 7.1(iii)(b)
incurred (a) to finance the acquisition, construction or improvement of any
real property or tangible personal property assets acquired or held by
Company or any of its Subsidiaries in the ordinary course of business;
provided that (1) such Liens shall be created within 180 days after the
--------
acquisition, construction or improvement of such assets, and (2) the
principal amount of Indebtedness secured by any such Liens shall at no time
exceed 100%, and the proceeds of such Indebtedness shall be used to provide
not less than 75%, of the original
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<PAGE>
purchase price of such asset or the amount expended to construct or improve
such asset, as the case may be; or (b) to renew, extend or refinance any
Indebtedness described in clause (a); provided that the amount of any such
--------
Indebtedness does not exceed the amount of Indebtedness so renewed,
extended or refinanced which is unpaid and outstanding immediately prior to
such renewal, extension or refinancing; and provided further, that in the
-------- -------
case of clause (a) or (b), (1) such Liens attach solely to the assets
financed with such Indebtedness, (2) no recourse may be had under the
Indebtedness secured by such Lien against any Person other than the
borrower of such Indebtedness for the payment of principal, interest, fees,
costs or premium on such Indebtedness or for any claim based thereon, and
(3) the financial covenants under any Indebtedness secured by such Liens
are, in each case, no more restrictive than those set forth in this
Agreement;
(ix) Liens securing Indebtedness permitted pursuant to subsection
7.1(ix) to the extent such Liens were in existence prior to a Permitted
Acquisition;
(x) Liens incurred in connection with the sale or factoring of
accounts receivable by Permitted Foreign Subsidiaries;
(xi) Liens securing Additional Secured Indebtedness;
(xii) Liens securing reimbursement of obligations in respect of
documentary letters of credit; provided, that such Liens attach only to the
documents, the goods covered thereby and the proceeds thereof;
(xiii) Liens upon specific items of inventory or other goods and
proceeds of the Company or any of its Subsidiaries securing such Person's
obligations in respect of bankers' acceptance issued or created or the
account of such Person to facilitate the purchase, shipment or storage of
such inventory or other goods;
(xiv) Liens encumbering customary initial deposits and margin
deposits, and similar Liens attaching to commodity trading accounts or
other brokerage accounts incurred in the ordinary course of business; and
(xv) Other Liens securing Indebtedness in an aggregate amount not
to exceed $1,000,000 at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Holdings or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
--------
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
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C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an asset sale, neither Holdings nor any
of its Subsidiaries shall enter into any agreement (other than the Senior Note
Indenture, the Senior Discount Debentures, the Term Loan Credit Documents, the
Loan Documents or any other agreement evidencing acquired Indebtedness or any
agreement, note or indenture relating to any Indebtedness under any debt basket,
or any other agreement prohibiting only the creation of Liens securing
Subordinated Indebtedness) prohibiting the creation or assumption of any Lien
upon any of its properties or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO HOLDINGS OR OTHER
SUBSIDIARIES. Except as provided herein, Holdings will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Holdings or any
other Subsidiary of Holdings, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Holdings or any other Subsidiary of Holdings, (iii) make loans or
advances to Holdings or any other Subsidiary of Holdings, or (iv) transfer any
of its property or assets to Holdings or any other Subsidiary of Holdings,
except for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) this Agreement and the other Loan Documents, (c) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Company or any of its Subsidiaries, (d) customary
provisions restricting assignment of any licensing or other agreements entered
into by Company or any of its Subsidiaries in the ordinary course of business,
(e) the Senior Note Indenture, the Senior Discount Debentures, and the Term Loan
Credit Documents or any agreement evidencing acquired Indebtedness or any
agreement, note or indenture relating to any Indebtedness under any debt basket,
and (f) customary provisions restricting the transfer of assets subject to Liens
permitted under subsections 7.2A.
7.3 INVESTMENTS; JOINT VENTURES.
---------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Holdings and its Subsidiaries may make and own Investments in
Cash Equivalents ;
(ii) Holdings may continue to own the Investments owned by it as of
the Closing Date in Company, and Company and its Subsidiaries may continue
to own the Investments owned by them as of the Closing Date in any
Subsidiaries of Company, and make Investments in Permitted Subsidiaries (in
accordance with the definitions of Permitted Domestic Subsidiaries and
Permitted Foreign Subsidiaries);
(iii) Holdings and its Subsidiaries may own Investments in their
respective Subsidiaries to the extent that such Investments reflect an
increase in the value of such Subsidiaries;
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(iv) Company and its Subsidiaries may make intercompany loans to
the extent permitted under subsections 7.1(iv) and (xiv);
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
------------
(vi) Company and its Subsidiaries may make loans and advances to
employees, officers, executives or consultants to Company and its
Subsidiaries in the ordinary course of business of Company and its
Subsidiaries as presently conducted for the purpose of purchasing
Securities of Holdings so long as no cash is paid by Holdings or any of its
Subsidiaries in connection the acquisition of such Securities;
(vii) Company and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms
(including the dating of receivables) of Company or any such Subsidiary;
(viii) Company and its Subsidiaries may acquire and own Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(ix) Company and its Subsidiaries may make and own Investments
consisting of deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases and may make any
pledges or deposits permitted under subsection 7.2;
(x) Holdings may make equity contributions to the capital of
Company;
(xi) Company and its Permitted Subsidiaries may make and own
Investments in Subsidiaries pursuant to Permitted Acquisitions under
subsection 7.7(xiii);
(xii) Company and its Permitted Subsidiaries may make and own
Investments consisting of notes received in connection with any Asset Sale
or sale of other assets; provided that the aggregate principal amount of
--------
such notes at any time outstanding shall not exceed 1-1/2% of consolidated
total assets of Company and its Subsidiaries and such notes are secured by
a first priority perfected lien on such assets sold;
(xiii) Company and its Permitted Subsidiaries may make and own
Investments in any Person which (a) (1) result in the creation of an
account arising in the ordinary course of Company's or such Permitted
Subsidiary's business or (2) result from the restructure, reorganization or
similar composition of trade account obligations which arose in the
ordinary course of business and which are owing to Company or such
Permitted Subsidiary from financially distressed debtors, and (b) are, in
each case, subject to the Lien in favor of Collateral Agent under the
Collateral Documents;
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(xiv) Holdings and its Permitted Subsidiaries may make and own
Investments contemplated under subsection 7.7;
(xv) Company and its Subsidiaries may make and own Investments in
wholly-owned Permitted Domestic Subsidiaries of Company consisting of
intercompany Indebtedness of such Permitted Subsidiaries converted to
equity Investments, to the extent necessary to maintain the solvency in
accordance with applicable legal requirements of such Permitted Subsidiary,
provided that the underlying intercompany Indebtedness was permitted
--------
hereunder at the time of such conversion;
(xvi) Permitted Foreign Subsidiaries of Holdings may make and own
Investments in Foreign Cash Equivalents;
(xvii) Company and its Permitted Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $10,000,000;
and
(xviii) Company and its Subsidiaries may make and own other
Investments in a Person or business in substantially the same line of
business as the Company and its Permitted Subsidiaries in an aggregate
amount not to exceed at any time an amount equal to the sum of (1) the
lesser of (y) 50% of the amount of Net Equity Proceeds (exclusive of any
Net Equity Proceeds referred to in subsection 2.4A(iii)(d)(C)(y)) and (z)
the amount such Net Equity Proceeds that has not been applied to repay the
Loans in accordance with subsection 2.4A(iii)(d) (exclusive of any Net
Equity Proceeds referred to in subsection 2.4A(iii)(d)(C)(y)), plus (2) the
----
amount contributed to Company pursuant to subsection 2.4A(iii)(d)(C)(y).
7.4 CONTINGENT OBLIGATIONS.
----------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Holdings may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty,
and Holdings may become and remain liable with respect to Contingent
Obligations in respect of the Holdings Guaranty;
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements required under subsection
6.10 or otherwise incurred in the ordinary course of business;
(iv) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of (a) customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets, (b)
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endorsements of instruments for deposit or collection in the ordinary
course of business, and (c) standard contractual indemnities entered into
in the ordinary course of business;
(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under guarantees in the ordinary course
of business of the obligations of suppliers, customers, franchisees and
licensees of Holdings and its Subsidiaries;
(vi) Holdings and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in Schedule 7.4
------------
annexed hereto;
(vii) Holdings and the Subsidiary Guarantors may become and remain
liable with respect to Contingent Obligations arising under their
guaranties of the Senior Notes and the Term Loans as are required under the
Senior Note Indenture and the Term Loan Credit Documents, respectively;
(viii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of guarantees of obligations
of any Subsidiary of Company under any worker's compensation self-insurance
program of such Subsidiary administered in accordance with applicable law
relating to worker's compensation;
(ix) Holdings and its Subsidiaries may become and remain liable
with respect to Contingent Obligations consisting of guarantees by Holdings
and its Subsidiaries of Indebtedness, leases and other contractual
obligations permitted to be incurred by Company or its Subsidiaries; and
(x) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations not otherwise permitted under this
subsection; provided that the maximum aggregate liability, contingent or
--------
otherwise, of Company and its Subsidiaries in respect of all such
Contingent Obligations, together with the aggregate principal amount of
Indebtedness of Company and its Subsidiaries incurred pursuant to
subsection 7.1(xv), shall at no time exceed $20,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
--------------------------
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment; provided that (i) any
--------
Subsidiary of Company may pay dividends to Company or a Subsidiary of Company;
(ii) Company may make dividends to its partners necessary to consummate the
Recapitalization Transactions; (iii) Holdings and Company may make any
Restricted Junior Payments in accordance with the terms of, and only to the
extent required by, the Recapitalization Agreement; (iv) Company may make
regularly scheduled payments of principal and interest in respect of the Senior
Notes in accordance with the terms thereof; (v) Company may make Restricted
Junior Payments to Holdings to the extent required for Holdings to make, and
Holdings may make, regularly scheduled payments of interest in respect of the
Shareholder Subordinated Notes in accordance with the terms of, and only to the
extent required by, and subject to the subordination
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provisions contained in, such Shareholder Subordinated Notes, as applicable;
(vi) Holdings and Company may make or make distribution to Holdings to make
regularly scheduled principal and interest payments in respect of Permitted
Seller Notes to the extent permitted under subsection 7.1(viii) in accordance
with the terms of, and subject to the subordination provisions contained in,
such Permitted Seller Notes; (vii) Holdings may pay regularly scheduled
distributions on the Preferred Units and Qualified Preferred Units pursuant to
the terms thereof solely through the issuance of additional shares of such
units, or by an increase in the liquidation preference thereof; (viii) Company
may exchange the Senior Notes as contemplated by the Senior Note Indenture, and
Holdings may exchange the Senior Discount Debentures in accordance with the
Senior Discount Indenture; (ix) Company may make Restricted Junior Payments to
Holdings and the General Partner, and Holdings may make Restricted Junior
Payments, (a) to the extent necessary to permit Holdings to pay reasonable
accounting, legal, SEC related, and similar fees and expenses and fees, expenses
and indemnities payments to directors or members of board of managers of
Holdings or the General Partner and (b) to the partners of Holdings and the
General Partner for Permitted Tax Distributions; (x) so long as no Potential
Event of Default or Event of Default shall have occurred and be continuing,
Company may make Restricted Junior Payments to Holdings and the General Partner,
and Holdings and the General Partner may make Restricted Junior Payments, to
permit the payment of the Bain Management Fees under the Bain Advisory Services
Agreement; (xi) Company may make Restricted Junior Payments to Holdings and the
General Partner to the extent required for Holdings and General Partner to make,
and Holdings may make, Restricted Junior Payments in an aggregate amount not to
exceed $1,500,000 in any Fiscal Year to the extent necessary to make repurchases
of Securities (and options or warrants to purchase such Securities) of Holdings
from employees (a) upon termination (including by reason of death, disability or
retirement) of such employees or (b) pursuant to a contractual obligation of
Holdings or any of its Subsidiaries; provided that, such amount for any Fiscal
--------
Year shall be increased by an amount equal to the excess, if any, of such amount
for the previous Fiscal Year (as adjusted in accordance with this proviso) over
the actual amount expended for such previous Fiscal Year; provided further that,
-------- -------
such amount shall be reduced by the aggregate amount of all principal and
interest payments made on any Shareholder Subordinated Notes permitted under
subsection 7.1(vii) in such Fiscal Year; provided further that, such amount for
-------- -------
any Fiscal Year shall be increased by an amount equal to the proceeds of a
substantially concurrent sale for cash of Securities of Holdings or the Company,
(xiii) Holdings or the Company may make Restricted Junior Payments in connection
with repurchases of equity Securities deemed to occur upon the exercise of stock
options if such Securities represent a portion of the exercise price thereof;
(xiii) in the event that any letter of intent or purchase agreement entered into
pursuant to Section 7.7(xi) is terminated and the Company or any Subsidiary is
entitled to a reimbursement of any cash earnest money deposit made by it in
connection therewith, the Company may make a Restricted Junior Payment to
Holdings and the General Partner, and Holdings may make a Restricted Junior
Payment in an amount not to exceed the amount of such reimbursement payment so
long as no Event of Default then exists; (xiv) Holdings may issue Common Units
to the holders of Preferred Units upon conversion thereof; and (xvi) Holdings
may acquire its equity Securities solely in exchange for other equity Securities
permitted to be issued hereunder; provided still further, that, any Restricted
-------- ----- -------
Junior Payments by Company to Holdings permitted under this subsection shall be
applied by Holdings for the purposes specified in this subsection.
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7.6 FINANCIAL COVENANTS.
-------------------
A. MINIMUM INTEREST COVERAGE RATIO. Holdings and Company shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated
Interest Expense (excluding therefrom, for purposes of this subsection 7.6A
---------
only, the amount of any amortization of deferred financing costs, interest on
deferred compensation or payments made to obtain Interest Rate Agreements which
would otherwise be included in Consolidated Interest Expense) for any four-
Fiscal Quarter period (including any such four-quarter period commencing prior
to the Closing Date) ending during any of the periods set forth below to be less
than the correlative ratio indicated; provided that, for any measurement of
--------
Consolidated Interest Expense pursuant to this Subsection 7.6A made prior to the
completion of four Fiscal Quarters following the Closing Date, Consolidated
Interest Expense for the relevant Calculation Period shall equal the product of
(i) Consolidated Interest Expense for the period from the Closing Date to the
date of measurement multiplied by (ii) a fraction, the numerator of which is 365
---------- --
and the denominator of which is the number of days during the period from the
Closing Date to the date of measurement.
<TABLE>
<CAPTION>
======================================================
MINIMUM
INTEREST COVERAGE
PERIOD RATIO
======================================================
<S> <C>
Closing Date - 6/30/99 1.4:1.0
------------------------------------------------------
7/1/99 and thereafter 1.5:1.0
======================================================
</TABLE>
B. MAXIMUM LEVERAGE RATIO. Holdings and Company shall not permit the
Leverage Ratio as of the last day of any Fiscal Quarter ending after the Closing
Date to exceed 5.1:1.0.
C. MAXIMUM REVOLVER LEVERAGE RATIO. Holdings and Company shall not permit
the Revolver Leverage Ratio as of the last day of any Fiscal Quarter ending
after the Closing Date to Exceed 4.5:1.0.
D. CERTAIN CALCULATIONS. With respect to any period during which a
Permitted Acquisition occurs, for purposes of determining compliance with the
financial covenants set forth in this subsection 7.6 and in Section 2.4(B),
Consolidated Adjusted EBITDA and Consolidated Interest Expense shall be
calculated with respect to such periods and such New Business on a pro forma
basis (including (i) pro forma adjustments arising out of events which are
directly attributable to a specific transaction, are factually supportable and
are expected to have a continuing impact, in each case determined on a basis
consistent with Article 11 of Regulation S-X promulgated under the Securities
Act and as interpreted by the staff of the Securities and Exchange Commission as
of January 1, 1997, and (ii) cost savings resulting from head count reduction,
closure of facilities and similar restructuring charges whether (x) resulting
from decisions made by Company or (y) implemented by the management of the New
Business within the six-month period immediately preceding the closing of such
Permitted Acquisition (provided that the cost savings described in clause (y)
are supportable and quantifiable by the underlying accounting records of such
business), which pro forma adjustments shall be certified by the principal
financial officer or principal
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accounting officer of Company) using the historical financial statements of the
New Business so acquired or to be acquired and the consolidated financial
statements of Holdings and its Subsidiaries which shall be reformulated (i) as
if such Permitted Acquisition, and any acquisitions which have been consummated
during such period, and any Indebtedness or other liabilities incurred or repaid
in connection with any such acquisition had been consummated or incurred or
repaid at the beginning of such period (and assuming that such Indebtedness
bears interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans incurred during such period), and (ii) otherwise
in conformity with certain procedures to be agreed upon between Administrative
Agent and Company, all such calculations to be in form and substance reasonably
satisfactory to Administrative Agent.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
----------------------------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Holdings or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, other than in the ordinary course of business,
transfer or otherwise dispose of (other than pursuant to a lease entered into in
the ordinary course of business), in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any other Person or any division or line of
business of any other Person, except:
(i) any Subsidiary of Company may be merged with or into Company or
any Subsidiary Guarantor, or be liquidated, wound up or dissolved, or all
or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to Company or any Subsidiary Guarantor; provided
--------
that, in the case of such a merger involving Company, Company shall be the
continuing or surviving corporation, and in the case of any other such
merger, such Subsidiary Guarantor shall be the continuing or surviving
corporation;
(ii) Company and its Subsidiaries may make Consolidated Capital
Expenditures in the ordinary course of business;
(iii) Company and its Subsidiaries may dispose of obsolete,
uneconomical, negligible, worn out or surplus property (including
Intellectual Property) in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
--------
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) subject to subsection 7.12, Company and its Subsidiaries may
make Asset Sales of assets having an aggregate fair market value not in
excess of $5,000,000; provided that (y) the consideration received for such
--------
assets shall be in an amount at least equal to the
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fair market value thereof and (z) the proceeds of such Asset Sales shall be
applied as required by subsection 2.4B(iii)(a);
(vi) Company and its Subsidiaries may sell or discount, in each
case without recourse, accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection
thereof; provided that the aggregate amount of such accounts receivable
--------
sold pursuant to this clause (vi) shall not exceed in any Fiscal Year 10%
of the accounts receivable of Company and its Subsidiaries recorded for the
preceding Fiscal Year;
(vii) Company and its Subsidiaries may, in the ordinary course of
business, license as licensee or licensor patents, trademarks, copyrights
and know-how to or from third Persons, so long as any such license by
Company or any of its Subsidiaries in its capacity as licensor is permitted
to be assigned pursuant to the Collateral Documents (to the extent that a
security interest in such patents, trademarks, copyrights and know-how is
granted thereunder) and does not otherwise prohibit the granting of a Lien
by Company or any of its Subsidiaries pursuant to the Collateral Documents
in the Intellectual Property covered by such license;
(viii) Company and its Subsidiaries may dispose of any Excluded
Subsidiary or its assets;
(ix) Company and its Subsidiaries may sell non-core businesses
acquired in connection with Permitted Acquisitions;
(x) Company and its Subsidiaries may sell or dispose of Cash
Equivalents and other investments permitted under subsection 7.3;
(xi) Company and its Subsidiaries may enter into letters of intent
and purchase agreements with respect to proposed acquisitions so long as
(a) any cash earnest money deposits required to be made by the Company or
its Subsidiaries in connection therewith are funded solely with new cash
equity contributions to the Company, (b) there shall be no recourse against
the Company or any of its Subsidiaries in respect of such letters of intent
or purchase agreements other than against any such cash earnest money
deposits and (c) neither the Company nor any of its Subsidiaries shall be
permitted to consummate any acquisition relating to such letter of intent
or purchase agreement without the prior written consent of the
Administrative Agent which consent may be withheld in Administrative
Agent's reasonable discretion, except no consent shall be required with
respect to acquisitions made pursuant to subdivision (xiii) of this Section
7.7);
(xii) Holdings and its Subsidiaries may convert (whether by merger,
acquisition or otherwise, including the establishment of new corporations
to do so) from limited partnerships to "C" corporations or limited
liability companies so long as the security interests granted to the
Administrative Agent for the benefit of the Lenders pursuant to the
Collateral Documents shall remain in full force and effect and perfected
(to at least the same
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extent as in effect immediately prior to such conversion) and Holdings and
Company comply with the provisions of subsection 10.22;
(xiii) Company or any Permitted Subsidiary of Company may make other
acquisitions of assets and businesses (including acquisitions of the
capital stock or other equity interests of another Person whether by merger
or purchase), provided that:
--------
(a) immediately prior to and after giving effect to any such
acquisition, Company and its Subsidiaries shall be in compliance with
the provisions of subsection 7.13 hereof;
(b) if such acquisition is structured as a stock acquisition,
then either (A) the Person so acquired becomes a Permitted Subsidiary
of Company or (B) such Person is merged with and into Company or a
Permitted Subsidiary of Company (with Company or such Permitted
Subsidiary being the surviving corporation in such merger), and in any
case, all of the provisions of subsection 6.8 have been complied with
in respect of such Person;
(c) the only consideration paid in connection with such
acquisition shall consist of cash, Common Units, Qualified Preferred
Units or Permitted Seller Notes;
(d) (1) Company shall be in compliance, on a pro forma basis
giving effect to the proposed acquisition, with the covenants set
forth in subsection 7.6 hereof, and (2) no Event of Default or
Potential Event of Default shall have occurred and be continuing at
the time of such acquisition or shall be caused thereby; and Company
shall have delivered to Administrative Agent an Officer's Certificate
(together with supporting information therefor), in form and substance
reasonably satisfactory to Administrative Agent, certifying as to the
foregoing;
(e) any assets acquired pursuant to such acquisition by a
Loan Party shall be subject to a First Priority Lien in favor of
Collateral Agent on behalf of Lenders pursuant to the Collateral
Documents;
(f) the aggregate Acquisition Consideration paid by Company
or any such Subsidiary in any such acquisition does not exceed
$50,000,000; and
(g) Administrative Agent shall have received the following
information with regard to the Permitted Acquisition at least ten (10)
Business Days (or at such later date as such information first becomes
available) prior to the consummation thereof: (y) summary information
prepared by Company describing the nature of the business or Person to
be acquired, the current draft of the acquisition agreement and
historical financial statements with respect to the business or Person
to be acquired as delivered to the Company; and (z) pro forma
financial statements for Company and its Subsidiaries for the
immediately preceding and following four-fiscal quarter period
demonstrating compliance on a pro forma basis with the financial
covenants
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applicable during such periods pursuant to subsection 7.6 and
adjustments made to the Borrowing Base Amount in accordance with
Schedule 1.1(i).
---------------
(xiv) any Permitted Foreign Subsidiary of Company may be merged with
or into any wholly-owned Permitted Foreign Subsidiary, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to any wholly-owned
Permitted Foreign Subsidiary; provided that (i) in the case of such a
--------
merger, such wholly-owned Permitted Foreign Subsidiary shall be the
continuing or surviving corporation and (ii) in each case, the stock of
such wholly-owned Permitted Foreign Subsidiary is pledged pursuant to, and
to the extent required under, the Collateral Documents;
(xv) Holdings or its Subsidiaries may sell or issue equity
interests of the Company or any of its Subsidiaries to Holdings, the
General Partner or any of their Subsidiaries;
(xvi) Holdings and its Subsidiaries may consummate the
Recapitalization Transactions;
(xvii) Company and its Permitted Subsidiaries may make Investments
pursuant to subsection 7.3; and
(xviii) Holdings may issue Common Units, the Preferred Units and
Qualified Preferred Units to the extent not otherwise prohibited under the
provisions of this Agreement.
7.8 FISCAL YEAR
-----------
Holdings and Company shall not change their Fiscal Year-end from December
31.
7.9 SALES AND LEASE-BACKS.
---------------------
Except with respect to Permitted Sale Leaseback Transactions, Company shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any property
(whether real, personal or mixed), whether now owned or hereafter acquired, (i)
which Company or any of its Subsidiaries has sold or transferred or is to sell
or transfer to any other Person (other than Holdings or any of its Subsidiaries)
or (ii) which Company or any of its Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by Company or any of its Subsidiaries to any Person (other
than Holdings or any of its Subsidiaries) in connection with such lease.
7.10 SALE OR DISCOUNT OF RECEIVABLES.
-------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or
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accounts receivable; provided, however, that Company and its Subsidiaries may,
-------- -------
in the exercise of their reasonable business judgment in connection with efforts
to collect amounts owed thereunder, discount or sell (to the extent permitted
under subsection 7.7) for less than the face value thereof any accounts
receivable.
7.11 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
---------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Holdings or with any Affiliate of Holdings or of any such holder, on terms that
are less favorable to Holdings or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided that the foregoing restriction shall not apply to (i) any
--------
transaction between Holdings and any of its Subsidiaries or between any of its
Subsidiaries, (ii) any payment from Company to Holdings and the General Partner
expressly permitted under subsection 7.5 and any payment by Holdings permitted
under subsection 7.5, (iii) the payment of Bain Management Fees under the Bain
Advisory Services Agreement, (iv) any employment agreement entered into by
Holdings or any of its Subsidiaries in the ordinary course of business, (v) any
issuance of Common Units or Preferred Units or Qualified Preferred Units in
connection with employment arrangements, stock options and stock ownership plans
of Holdings or any of its Subsidiaries entered into in the ordinary course of
business and the performance of obligations thereunder, (vi) any of the
Recapitalization Transactions, (vii) reasonable and customary fees, expenses and
indemnities paid to members of the Boards of Directors or Board of Managers, as
the case may be, of Holdings and its Subsidiaries, (viii) the performance of
obligations under the Related Agreements, (ix) transactions with Ray Anthony;
provided that any amounts received by Ray Anthony pursuant to this clause (ix)
- --------
in excess of salary and other compensation contractually due to him from Company
shall not exceed $50,000 in any Fiscal Year, or (x) transactions described in
Schedule 7.11 annexed hereto.
- -------------
7.12 DISPOSAL OF SUBSIDIARY INTERESTS.
--------------------------------
Except as required under the Collateral Documents and except for any sale
of 100% of the capital stock, partnership interests or other equity Securities
of any of its Subsidiaries in compliance with the provisions of subsection 7.7,
Holdings shall not:
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock, partnership interests or other
equity Securities of any of its Subsidiaries, except to qualify directors
if required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock, partnership interests or other equity Securities of any of its
Subsidiaries (including such Subsidiary), except to Company, another
Subsidiary of Holdings (subject to the restrictions on such disposition
otherwise imposed hereinunder), or to qualify directors if required by
applicable law.
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7.13 CONDUCT OF BUSINESS.
-------------------
From and after the Closing Date, Company shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by Company and its Subsidiaries on the Closing Date and similar or
related or supportive businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders. From and after the Closing Date, neither
Holdings nor General Partner shall engage in any business or have any assets
(including Intellectual Property) other than (i) owning partnership interests of
Company, or equity interests of Anthony Crane Holdings Capital Corporation, (ii)
the issuance of and activities related to the maintenance and servicing of
Shareholder Subordinated Notes (or similar notes in the case of the General
Partner), Permitted Seller Notes, the Senior Discount Debentures, other debt and
guaranty obligations permitted to be incurred hereunder and the partnership or
equivalent equity interests of Holdings (or the General Partner) as permitted
hereunder, (iii) the entering into, and the performance of its obligations
under, the Pledge and Security Agreement, the Related Agreements to which it is
a party, and the Term Loan Credit Documents to which it is a party, (iv) the
receipt of Cash distributions from Company in accordance with the provisions
hereof, and (v) activities associated with expenses paid with any dividends paid
to Holdings or the General Partner which are permitted under subsection 7.5.
From after the Closing Date, Company and Holdings shall not permit any of their
respective Subsidiaries which is a corporation as of the Closing Date to engage
in any activities other than entering into and the performance of their
obligations under the Pledge and Security Agreement, the Subsidiary Guaranty and
the Related Agreements to which it is a party. Notwithstanding the foregoing,
Holdings and the General Partner (and the corporations referred to in the
immediately preceding sentence) may engage in activities incidental to (a) the
maintenance of its existence in compliance with applicable law, (b) legal, tax
and accounting matters in connection with any of the foregoing activities and
(c) entering into, and performing its obligations under, this Agreement and the
Loan Documents to which it is a party. Neither Company nor Holdings shall
create or permit to exist any Subsidiary other than Permitted Subsidiaries and
Excluded Subsidiaries.
7.14 AMENDMENTS OR WAIVERS OF CERTAIN AGREEMENTS; AMENDMENTS OF DOCUMENTS
--------------------------------------------------------------------
RELATING TO SUBORDINATED INDEBTEDNESS AND SENIOR NOTES; AMENDMENTS OF TERM
--------------------------------------------------------------------------
CREDIT DOCUMENTS.
----------------
A. AMENDMENTS OR WAIVERS OF CERTAIN AGREEMENTS. None of Holdings,
Company nor any of their respective Subsidiaries will agree to any amendment to,
or waive any of its rights under, any Related Agreement (other than any Related
Agreement evidencing or governing the Senior Notes and any other Subordinated
Indebtedness) after the Closing Date if any such amendment or waiver would,
individually or in the aggregate, reasonably be expected to be materially
adverse to Lenders without in each case obtaining the prior written consent of
Requisite Lenders to such amendment or waiver.
B. AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS OR
SENIOR NOTES. Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, amend or otherwise change the terms of any
Subordinated Indebtedness or Senior Notes, or make any payment consistent with
an amendment thereof or change thereto, if the effect of such amendment or
change is to increase the interest rate on such Subordinated Indebtedness or
Senior
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Notes, change (to earlier dates) any dates upon which payments of principal or
interest are due thereon, change any event of default or condition to an event
of default with respect thereto (other than to eliminate any such event of
default or increase any grace period related thereto), change the redemption,
prepayment or defeasance provisions thereof, change the subordination provisions
of such Subordinated Indebtedness or any guaranty of any Subordinated
Indebtedness or Senior Notes), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of the obligor thereunder or to confer any additional rights on
the holders of such Subordinated Indebtedness (or a trustee or other
representative on their behalf) which would be materially adverse to Holdings,
Company or Lenders.
C. AMENDMENTS OF TERM LOAN CREDIT DOCUMENTS. Holdings and Company shall
not, and shall not permit any of their respective Subsidiaries to, amend or
otherwise change the terms of any of the Term Loan Credit Documents, or make any
payment consistent with an amendment thereof or a change thereto, that would
have the effect of (i) changing (to earlier dates) any dates upon which payments
of principal or interest are due on the Term Loans, (ii) reducing the percentage
specified in the definition of "Requisite Lenders" in the Term Loan Credit
Agreement, or (iii) changing the prepayment provisions of the Term Loan Credit
Agreement in a manner that disproportionately disadvantages the Lenders relative
to the lenders under the Term Loan Credit Agreement or confers additional rights
on the lenders under the Term Loan Credit Agreement which would be adverse to
Lenders, without the prior written consent of Requisite Lenders under this
Agreement.
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT") shall
occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
---------------------------------
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within three Business
Days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
---------------------------
(i) Failure of Holdings or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $5,000,000
or more or with an aggregate principal amount of $10,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent Obligations
in the individual or aggregate principal amounts referred
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to in clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
---------------------------
Failure of Holdings or Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement;
provided, however, that such failure with respect to the covenants contained in
- -------- -------
subsections 7.1, 7.2, 7.3 and 7.4 shall not constitute an Event of Default for
ten days after such failure so long as Company is diligently pursuing the cure
of such failure; or
8.4 BREACH OF WARRANTY.
------------------
Any representation, warranty, certification or other statement made by any
Loan Party in any Loan Document or in any statement or certificate at any time
given by any Loan Party in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false in any material respect on the date as of
which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Holdings, Company or such Loan Party becoming aware of such
default or (ii) receipt by Holdings, Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
-----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Holdings or any of its Subsidiaries (other than
Excluded Subsidiaries) in an involuntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against Holdings or any of its Subsidiaries (other than
Excluded Subsidiaries) under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Holdings or any of its Subsidiaries (other than Excluded
Subsidiaries), or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of Holdings or any of its
Subsidiaries (other than
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Excluded Subsidiaries) for all or a substantial part of its property; or a
warrant of attachment, execution or similar process shall have been issued
against any substantial part of the property of Holdings or any of its
Subsidiaries (other than Excluded Subsidiaries), and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
---------------------------------------------------
(i) Holdings or any of its Subsidiaries (other than Excluded Subsidiaries)
shall have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Holdings or
any of its Subsidiaries (other than Excluded Subsidiaries) shall make any
assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries (other than Excluded Subsidiaries) shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Holdings or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5,000,000 or (ii)
in the aggregate at any time an amount in excess of $10,000,000 (in either case
not adequately covered by insurance from a solvent and unaffiliated insurance
company) shall be entered or filed against Holdings or any of its Subsidiaries
or any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days (or in any event later than five
days prior to the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
-----------
Any order, judgment or decree shall be entered against Holdings or any of
its Subsidiaries (other than an Excluded Subsidiary) decreeing the dissolution
or split up of Holdings or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
----------------------
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Holdings or any of its Subsidiaries in excess of $7,500,000 during the term of
this Agreement; or
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8.11 CHANGE IN CONTROL.
-----------------
(i) Holdings shall cease to own and control 100% of the limited
partnership interests of Company, or General Partner shall cease to own and
control 100% of the general partnership interests of Company; (ii) prior to an
initial public offering by Holdings (or any successor pursuant to subsection
10.22,) (x) Bain Investors and their Related Parties shall cease, directly or
indirectly, to have the right to elect or appoint a majority of the Board of
Managers of the General Partner if Holdings is a limited partnership or the
Board of Directors of Holdings if Holdings has become a "C" corporation in
accordance with the terms hereof, in either case through stock or membership
ownership, voting agreement or otherwise or (y) for so long as Holdings is a
partnership, the occurrence of any transaction which results in the General
Partner no longer being the sole general partner of Holdings; (iii) Bain
Investors and their Related Parties shall cease to beneficially own, directly or
indirectly, 71% of the economic interests of Holdings or General Partner owned
by Bain Investors and their Related Parties on Closing Date; (iv) after an
initial public offering of Holdings (or any successor thereto pursuant to
subsection 10.22,) any Person (other than Bain Investors and their Related
Parties) shall (y) have a greater economic or voting interest in Holdings or
General Partner (or any successor thereto pursuant to subsection 10.22) than
Bain Investors' and their Related Parties' economic or voting interest in
Holdings (or any successor thereto pursuant to subsection 10.22), or (z) own or
control more than 30% of the economic or voting interest of Holdings (or any
successor thereto pursuant to subsection 10.22); or (v) any "Change of Control"
shall occur under the Senior Notes; or
8.12 INVALIDITY OF GUARANTIES; FAILURE OF SECURITY; REPUDIATION OF OBLIGATIONS.
-------------------------------------------------------------------------
At any time after the execution and delivery thereof, (i) any Guaranty for
any reason, other than the satisfaction in full of all Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen and are not yet due and payable), shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Collateral Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered and required to be perfected thereby having a fair market value,
individually or in the aggregate, exceeding $2,000,000, in each case for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party; or
8.13 FAILURE TO CONSUMMATE RECAPITALIZATION.
--------------------------------------
The Recapitalization Transactions contemplated to occur on the Closing Date
shall not be consummated in accordance with this Agreement and the applicable
Related Agreements on the
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Closing Date, or the Recapitalization Transactions shall be unwound, reversed or
otherwise rescinded in whole or in part for any reason:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Holdings and Company, and the obligation of each Lender to make any
Loan, the obligation of Administrative Agent to issue any Letter of Credit and
the right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request or with
the written consent of Requisite Lenders, by written notice to Company, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
--------
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Intercreditor Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding paragraph, if at
any time within 60 days after an acceleration of the Loans pursuant to clause
(ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than non-
payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Holdings or Company, and such provisions,
shall not at any time be construed so as to grant Holdings or Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
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SECTION 9.
AGENTS
9.1 APPOINTMENT.
-----------
A. APPOINTMENT OF AGENTS. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms of this Agreement and the other Loan
Documents. Fleet is hereby appointed Administrative Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes Administrative Agent
to act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. DLJ is hereby appointed Documentation Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes Documentation Agent
to act as its agent in accordance with the terms of this Agreement and the
other Loan Documents. Each Lender hereby authorizes and confirms the
appointment by Administrative Agent of Fleet as Collateral Agent under the
Intercreditor Agreement and the other Loan Documents, and each Lender hereby
authorizes Collateral Agent to act as its agent in accordance with the terms of
the Intercreditor Agreement and the other Loan Documents. Each Agent hereby
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Agents and Lenders and Company shall have no rights as
a third party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, each Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Holdings or
any of its Subsidiaries. Each of Syndication Agent and Documentation Agent,
without consent of or notice to any party hereto, may assign any and all of its
rights or obligations hereunder to any of its Affiliates. As of the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments, all obligations of GSCP, in its
capacity as Syndication Agent hereunder, shall terminate. DLJ, in its capacity
as Documentation Agent, shall have no obligations hereunder.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Collateral Agent deems that by reason
of any present or future law of any jurisdiction it may not exercise any of the
rights, powers or remedies granted herein or in any of the other Loan Documents
or take any other action which may be desirable or necessary in connection
therewith, it may be necessary that Collateral Agent appoint an additional
individual or institution as a separate trustee, co-trustee, collateral agent or
collateral co-agent (any such additional individual or institution being
referred to herein individually as a "SUPPLEMENTAL COLLATERAL AGENT" and
collectively as "SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Collateral Agent appoints a Supplemental Collateral Agent
with respect to any Collateral, (i) each and every right, power, privilege or
duty expressed or intended by this Agreement or any of the other Loan Documents
to be exercised by or vested in or conveyed to Collateral Agent with respect to
such Collateral shall be exercisable by and vest in such
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Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by such
Supplemental Collateral Agent shall run to and be enforceable by either
Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Collateral Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Collateral Agent and/or such Supplemental Collateral Agent, as the
context may require.
Should any instrument in writing from Holdings, Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Collateral Agent for more fully and certainly vesting in and confirming to him
or it such rights, powers, privileges and duties, Holdings or Company shall, or
shall cause such Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Collateral Agent until the appointment of
a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
-----------------------------------
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Each Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. No Agent shall have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any of Agent to Lenders or by or on behalf of
Holdings or Company to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Holdings or Company or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to ascertain
or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained
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in any of the Loan Documents or as to the use of the proceeds of the Loans or as
to the existence or possible existence of any Event of Default or Potential
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.
C. EXCULPATORY PROVISIONS. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent, in the case of any Agent other than the Administrative
Agent, shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) or, in the case of the Administrative Agent, in
accordance with the Intercreditor Agreement, and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be)
or in accordance with the Intercreditor Agreement, as the case may be, such
Agent shall be entitled to act or (where so instructed) refrain from acting, or
to exercise such power, discretion or authority, in accordance with such
instructions. Without prejudice to the generality of the foregoing, (i) each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Holdings and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents, in the case of any Agent other
than the Administrative Agent, in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) or, in the case of the Administrative Agent, in
accordance with the Intercreditor Agreement.
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Holdings, Company or any of their
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Holdings and Company for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
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9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
------------------------------------------------------------------
CREDITWORTHINESS.
----------------
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Holdings and its Subsidiaries. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 RIGHT TO INDEMNITY.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company or Holdings, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature what soever which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Loan Documents or otherwise in its capacity
as such Agent in any way relating to or arising out of this Agreement or the
other Loan Documents; provided that no Lender shall be liable for any portion of
--------
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that arise from such Agent's gross
negligence or willful misconduct. If any indemnity furnished to any Agent for
any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indem nified against until such additional indemnity
is furnished; provided that in no event shall this sentence require any Lender
--------
to indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided, further, that this sentence shall not be
--------
deemed to require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement described in the proviso to the immediately preceding sentence.
9.5 SUCCESSOR ADMINISTRATIVE AGENT AND SWING LINE LENDER.
----------------------------------------------------
A. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company,
and Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent with the consent of Company (which consent shall not be unreasonably
withheld). Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent and the
retiring or removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring
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or removed Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of Fleet or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Agent in its capacity as Swing
Line Lender, (ii) upon such prepayment, the retiring or removed Administrative
Agent and Swing Line Lender shall surrender any Swing Line Note held by it to
Company for cancellation, and (iii) if so requested by the successor
Administrative Agent and Swing Line Lender in accordance with subsection 2.1E,
Company shall issue a new Swing Line Note to the successor Administrative Agent
and Swing Line Lender substantially in the form of Exhibit VIII annexed hereto,
------------
in the principal amount of the Swing Line Loan Commitment then in effect and
with other appropriate insertions.
C. ADMINISTRATIVE AGENT UNDER TERM LOAN CREDIT AGREEMENT. Any
resignation or removal of Administrative Agent pursuant to subsection 9.5A shall
also constitute the resignation or removal of Fleet for all purposes hereunder
and under the Term Loan Credit Agreement.
9.6 COLLATERAL DOCUMENTS AND GUARANTY.
---------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders, to enter into the Intercreditor Agreement, and
each Lender agrees to be bound by the terms of the Intercreditor Agreement;
provided that Administrative Agent shall not enter into or consent to any
- --------
material amendment, modification, termination or waiver of the Intercreditor
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6). Each
Lender hereby further authorizes Collateral Agent (and under the terms of the
Intercreditor Agreement Collateral Agent is authorized), on behalf of and for
the benefit of Lenders, to enter into each Collateral Document as secured party
and to be the agent for and representative of the Lenders under the Guaranties,
and each Lender agrees to be bound by the terms of each Collateral Document and
each Guaranty; provided that Collateral Agent shall not enter into or consent to
--------
any material amendment, modification, termination or waiver of the Intercreditor
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6) ; provided
--------
further, however, that, without further written consent or authorization from
- ------- -------
Lenders, Collateral Agent may execute any documents or instruments necessary to
(a) release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted by this Agreement or as permitted
or required under the Intercreditor Agreement or the Collateral Documents or to
which Requisite Lenders (or such other Lenders as may be required to give such
consent under subsection 10.6) have otherwise consented or (b) release any
Subsidiary Guarantor from the Subsidiary Guaranty if all of the capital stock of
such Subsidiary Guarantor is sold to any Person pursuant to a sale or other
disposition permitted hereunder or as permitted under the Intercreditor
Agreement or to which Requisite Lenders (or such other Lenders as may be
required to give such consent under subsection 10.6) have otherwise consented;
provided, however, that nothing in this subsection shall require
- -------- -------
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consent to release from the Subsidiary Guaranty any Person which, immediately
after such sale, shall be a Subsidiary of Holdings which is obligated to and
will enter into the Subsidiary Guaranty. Anything contained in any of the Loan
Documents to the contrary notwithstanding, Company, Administrative Agent,
Collateral Agent and each Lender hereby agree that (X) no Lender shall have any
right individually to realize upon any of the Collateral under any Collateral
Document or to enforce the Subsidiary Guaranty, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents and the
Guaranties may be exercised solely by Collateral Agent for the benefit of
Secured Parties in accordance with the terms thereof, and (Y) in the event of a
foreclosure by Collateral Agent on any of the Collateral pursuant to a public or
private sale, Collateral Agent or any Secured Party may be the purchaser of any
or all of such Collateral at any such sale and Collateral Agent, as agent for
and representative of Secured Parties (but not any Secured Party or Secured
Parties in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale.
SECTION 10.
MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
-------------------------------------------------------------
A. GENERAL. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
any Loan or Loans made by it or its Letters of Credit or participations therein
or any other interest herein or in any other Obligations owed to it; provided
--------
that no such sale, assignment, transfer or participation shall, without the
consent of Company, require Company to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided,
--------
further that no such sale, assignment or transfer described in clause (i) above
- -------
shall be effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii); provided, further
-------- -------
that no such sale, assignment, transfer or participation of any Letter of Credit
or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Revolving Loan
Commitment and the Revolving Loans of the Lender effecting such sale,
assignment, transfer or participation; and provided, further that, anything
-------- -------
contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of Swing Line Lender may not be sold, assigned or
transferred as described in clause (i) above to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated
by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender.
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B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
--------------------------------
of Credit or participation therein, or other Obligation may (a) be assigned
in any amount to another Lender, or to an Affiliate or Approved Fund of the
assigning Lender or another Lender, with the giving of notice to Company
and Administrative Agent, or (b) be assigned in an aggregate amount of not
less than $5,000,000 (or such lesser amount as shall constitute the
aggregate amount of the Commitments, Loans, Letters of Credit and
participations therein, and other Obligations of the assigning Lender and
its Affiliates) to any other Eligible Assignee with the consent of Company
and Administrative Agent (which consent of Company and Administrative Agent
shall not be unreasonably withheld or delayed); provided that, unless
--------
otherwise agreed to in writing by Company and Administrative Agent or
unless such assignment is for the assigning Lender's entire interest
hereunder and under the other Loan Documents, the assigning Lender shall
have, immediately after giving effect to such assignment, not less than an
aggregate amount of $5,000,000 in Commitments, Loans and Letter of Credit;
and provided further, however, that (x) upon the occurrence and during the
-------- ------- -------
continuance of an Event of Default, or (y) in the case of assignments by
GSCP, Fleet or DLJ, assignments may be made without the consent of Company
or Administrative Agent, upon the giving of notice to Company and
Administrative Agent. To the extent of any such assignment in accordance
with either clause (a) or (b) above, the assigning Lender shall be relieved
of its obligations with respect to its Commitments, Loans, Letters of
Credit or participations therein, or other Obligations or the portion
thereof so assigned. The parties to each such assignment shall execute and
deliver to Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing and
recordation fee of $500 in the case of assignments pursuant to clause (a)
above and assignments by GSCP, Fleet or DLJ and $2000 in the case of all
other assignments and such forms, certificates or other evidence, if any,
with respect to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver to
Administrative Agent and the Company pursuant to subsection 2.7B(iii)(a).
Upon such execution, delivery, acceptance and recordation, from and after
the effective date specified in such Assignment Agreement, (y) 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
Agreement, shall have the rights and obligations of a Lender hereunder and
(z) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination of this Agreement under subsection 10.9B) and be released from
its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto; provided that, anything contained in any of the Loan
--------
Documents to the contrary notwithstanding, if such Lender is the Issuing
Lender with respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of an Issuing Lender with
respect to such Letters of Credit until the cancellation or expiration of
such Letters of Credit and the reimbursement of any amounts drawn
thereunder). The Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment of such assigning
Lender and, if any such assignment occurs after the issuance of any Notes
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hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the assignee and/or the
assigning Lenders in accordance with Subsection 2.1E, be issued to the
assignee and/or to the assigning Lender, substantially in the form of
Exhibit IV or Exhibit V annexed hereto, as the case may be, with
---------- ---------
appropriate insertions, to reflect the new Commitments, as the case may be,
of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
-----------------------------------------------------------
Upon its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together with
the processing and recordation fee referred to in subsection 10.1B(i) and
any forms, certificates or other evidence with respect to United States
federal income tax withholding matters that such assignee may be required
to deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a),
Administrative Agent shall, if Administrative Agent has and Company have
consented to the assignment evidenced thereby (in each case to the extent
such consent is required pursuant to subsection 10.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of Administrative
Agent to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation (ii) a reduction of the principal amount of
or the rate of interest or fees payable on any Loan allocated to such
participation, and all amounts payable by Company hereunder (including amounts
payable to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) or (iii) a
release of all or substantially all of the Collateral. Company and each Lender
hereby acknowledge and agree that, solely for purposes of subsections 10.4 and
10.5, (a) any participation will give rise to a direct obligation of Company to
the participant and (b) the participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS AND FUND TRUSTEES. In addition
to the assignments and participations permitted under the foregoing provisions
of this subsection 10.1, any Lender may assign and pledge all or any portion of
its Loans, the other Obligations owed to such Lender, and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and with the consent of Company and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its Notes or Loans to its trustee in support of its obligations
to such trustee; provided that (i) no Lender shall, as between Company and such
--------
Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank or
trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
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E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (a) of the definition thereof; (ii) that it has experience
and expertise in the making of or investing in loans such as the Loans; and
(iii) that it will make its Loans for its own account in the ordinary course of
its business and without a view to distribution of such Loans within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 EXPENSES.
--------
Whether or not the transactions contemplated hereby are consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents and any consents, amendments
(requested by or for the benefit of Company), waivers or other modifications
thereto; (ii) all the costs of furnishing all opinions by counsel for Company
(including any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Syndication Agent (in each case
including allocated costs of internal counsel) in connection with the
negotiation, preparation and execution of the Loan Documents and of the
Administrative Agent in connection with any consents, amendments (requested by
or for the benefit of Company), waivers or other modifications thereto and any
other documents or matters requested by Company; (iv) all the reasonable costs
and reasonable expenses of creating and perfecting Liens in favor of Collateral
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Agents and to Administrative Agent and of counsel providing any
opinions that Agents, Administrative Agent or Requisite Lenders may request in
respect of the Collateral Documents or the Liens created pursuant thereto; (v)
all the reasonable costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Administrative Agent and its counsel) of obtaining and reviewing any appraisals
provided for under subsection 6.9C, any environmental audits or reports provided
for under subsection 4.1K or 6.9B(ix) and any audits or reports provided for
under subsection 6.5B with respect to Inventory and accounts receivable of
Holdings and its Subsidiaries; (vi) all the reasonable costs and reasonable
expenses (including the reasonable fees, expenses and disbursements of any
consultants, advisors and agents employed or retained by Administrative Agent
and its counsel) in connection with the administration of the Loan Documents,
and the custody or preservation of any
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of the Collateral as may separately be agreed to between the Administrative
Agent, Collateral Agent and Company; (vii) all other reasonable costs and
expenses incurred by any of the Agents in connection with the syndication of the
Commitments and the negotiation, preparation and execution of the Loan Documents
and any consents, amendments (requested by or for the benefit of Company),
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by any of the Agents and
Lenders in enforcing any Obligations of or in collecting any payments due from
any Loan Party hereunder or under the other Loan Documents by reason of such
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the
Guaranties) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
---------
In addition to the payment of expenses pursuant to subsection 10.2, whether
or not the transactions contemplated hereby are consummated, Company agrees to
defend (subject to Indemnitees' selection of counsel), indemnify, pay and hold
harmless Agents and Lenders, and the officers, partners, directors, trustees,
employees, agents and affiliates of any of Agents and Lenders (collectively
called the "INDEMNITEES"), from and against any and all Indemnified Liabilities
(as hereinafter defined); provided that Company shall not have any obligation to
--------
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence, bad faith
or willful misconduct of that Indemnitee as determined by a final, non-
appealable judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened
by any Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto, and any fees or expenses incurred by Indemnitees
in enforcing this indemnity), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of (i) this
Agreement or the other Loan Documents or the Related Agreements or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranties)), (ii) the statements contained in the commitment
letter executed by any Lender and the Company with respect thereto,
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or (iii) any Environmental Claim or any Hazardous Materials Activity relating to
or arising from, directly or indirectly, any past or present activity,
operation, land ownership, or practice of Holdings or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default each Lender is hereby authorized by Company
at any time or from time to time subject to the consent of Administrative Agent,
without notice to Company or to any other Person (other than Administrative
Agent), any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts or payroll accounts) and any other Indebtedness
at any time held or owing by that Lender to or for the credit or the account of
Company against and on account of the obligations and liabilities of Company
which are then due and payable to that Lender under this Agreement, the Letters
of Credit and participations therein and the other Loan Documents, including all
claims of any nature or description arising out of or connected with this
Agreement, the Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not that Lender shall have made any demand
hereunder which are then due and payable. Company hereby further grants to
Administrative Agent, Collateral Agent and each Lender a security interest in
all deposits and accounts maintained with Administrative Agent or such Lender as
security for the Obligations.
Company, the Lenders, the Administrative Agent and Collateral Agent hereby
acknowledge and agree that the provisions of this subsection 10.4 are subject to
the provisions of the Intercreditor Agreement. To the extent that any Lender is
required pursuant to the provisions of the Intercreditor Agreement to turn over
to the Administrative Agent any payments otherwise subject to the provisions of
this subsection 10.4, such payments shall not be subject to the provisions of
this subsection 10.4.
10.5 RATABLE SHARING.
---------------
Lenders hereby agree among themselves that if any of them shall, whether by
voluntary payment (other than a voluntary prepayment of Loans made and applied
in accordance with the terms of this Agreement), by realization upon security,
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to that Lender hereunder or
under the other Loan Documents (collectively, the "AGGRE-
144
<PAGE>
GATE AMOUNTS DUE" to such Lender) which is greater than the proportion received
by any other Lender in respect of the Aggregate Amounts Due to such other
Lender, then the Lender receiving such proportionately greater payment shall (i)
notify Administrative Agent and each other Lender of the receipt of such payment
and (ii) apply a portion of such payment to purchase participations (which it
shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that, if all or part of such
--------
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
Company, the Lenders and Administrative Agent hereby acknowledge and agree
that the provisions of this subsection 10.5 are subject to the provisions of the
Intercreditor Agreement. To the extent that any Lender is required pursuant to
the provisions of the Intercreditor Agreement to turn over to the Administrative
Agent any payments otherwise subject to the provisions of this subsection 10.5,
such payments shall not be subject to the provisions of this subsection 10.5.
10.6 AMENDMENTS AND WAIVERS.
----------------------
A. No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Company therefrom, shall in
any event be effective without the written concurrence of Requisite Lenders;
provided that no such amendment, modification, termination, waiver or consent
- --------
shall, without the consent of each Lender (with Obligations directly affected in
the case of the following clause (i)): (i) extend the scheduled final maturity
of any Loan or Note, or extend the stated expiration date of any Letter of
Credit beyond the Revolving Loan Commitment Termination Date, or reduce the rate
of interest on any Loan (other than any waiver of any increase in the interest
rate applicable to any Loan pursuant to subsection 2.2E; it being understood
that modification of the financial definitions herein shall not constitute a
reduction of the rate of interest for the purposes of this subsection 10.6) or
any commitment fees or letter of credit fees payable hereunder, or extend the
time for payment of any such interest or fees, or reduce the principal amount of
any Loan or any reimbursement obligation in respect of any Letter of Credit,
(ii) amend, modify, terminate or waive any provision of this subsection 10.6,
(iii) reduce the percentage specified in the definition of "Requisite Lenders"
(it being understood that, with the consent of Requisite Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of "Requisite Lenders" on substantially the same basis as the
Revolving Loan Commitments and the Revolving Loans are included on the Closing
Date), (iv) release or otherwise subordinate all or all or substantially all of
the Collateral or Holdings or General Partner from the Holdings Guaranty or all
or substantially all of the Subsidiary Guarantors from the Subsidiary Guaranty
except as expressly provided in the Loan Documents, or (v) consent to the
assignment or transfer by Company of any of its rights and obligations under
this Agreement;
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provided, further that no such amendment, modification, termination or waiver
- -------- -------
shall (1) increase the Commitments of any Lender over the amount thereof then in
effect, or extend the duration thereof, without the consent of such Lender (it
being understood that no amendment, modification or waiver of any condition
precedent, covenant, Potential Event of Default or Event of Default shall
constitute an increase or extension in the Commitment of any Lender, and that no
increase in the available portion of any Commitment of any Lender shall
constitute an increase in such Commitment of such Lender); (2) amend, modify,
terminate or waive any provision of subsection 2.1A(ii) or any other provision
of this Agreement relating to the Swing Line Loan Commitment or the Swing Line
Loans without the consent of Swing Line Lender; (3) amend, modify, terminate or
waive any obligation of Lenders relating to the purchase of participations in
Letters of Credit as provided in subsection 3.1C without the written concurrence
of Administrative Agent and of each Issuing Lender which has a Letter of Credit
then outstanding or which has not been reimbursed for a drawing under a Letter
of Credit issued it; or (4) amend, modify, terminate or waive any provision of
Section 9 or 10 as the same applies to any Agent (including the Administrative
Agent), or any other provision of this Agreement as the same applies to the
rights or obligations of any Agent (including the Administrative Agent), in each
case without the consent of such Agent (including the Administrative Agent).
B. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on Company.
10.7 INDEPENDENCE OF COVENANTS.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
--------
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Holdings, Company and Administrative Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto
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<PAGE>
and (ii) as to each other party, such other address as shall be designated by
such party in a written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company and Holdings set forth in subsections 2.6D,
2.7, 3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or Collateral
Agent or any Lender in the exercise of any power, right or privilege hereunder
or under any other Loan Document shall impair such power, right or privilege or
be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
-------------------------------
None of Administrative Agent, Collateral Agent or any Lender shall be
under any obligation to marshal any assets in favor of Company or any other
party or against or in payment of any or all of the Obligations. To the extent
that Company makes a payment or payments to Administrative Agent, Collateral
Agent, or Lenders (or to Administrative Agent or Collateral Agent for the
benefit of Lenders), or Administrative Agent, Collateral Agent or Lenders
enforce any security interests or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, any other state or federal law, common law or any
equitable cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.
10.12 SEVERABILITY.
------------
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
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10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 HEADINGS.
--------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Holdings' nor Company's rights or obligations hereunder nor any interest therein
may be assigned or delegated by Holdings or Company without the prior written
consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY OR HOLDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY AND HOLDINGS, FOR THEMSELVES AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPT GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
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(II) WAIVE ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO HOLDINGS AND COMPANY AT THEIR ADDRESSES PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREE THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREE THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
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<PAGE>
LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be filed as
a written consent to a trial by the court.
10.19 CONFIDENTIALITY.
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with prudent lending or investing practices, it being understood and
agreed by Company and Holdings that in any event a Lender may make disclosures
to Affiliates of such Lender or disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participations therein
or by any direct or indirect contractual counterparties (or the professional
advisors thereto) in swap agreements (provided that such counterparties and
--------
advisors are advised of and agree to be bound by the provisions of this
subsection 10.19) or disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
- --------
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall any Lender be
-------- -------
obligated or required to return any materials furnished by Holdings or any of
its Subsidiaries.
10.20 COUNTERPARTS; EFFECTIVENESS.
---------------------------
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
10.21 LIMITATION ON LIABILITY OF GENERAL PARTNER.
------------------------------------------
Except as set forth in the Holdings Guaranty, the Obligations shall be
nonrecourse to General Partner, except to the extent of its partnership
interests in Company and Holdings. Any liability of General Partner in respect
of the Obligations shall be specifically limited to the interests of General
Partner and in its partnership interests in Company and Holdings, and no other
assets of General Partner shall be subject to any claims as a result hereof.
Except as set forth herein or in the Loan Documents, each Lender acknowledges
and agrees that no director, officer, employee, incorporator, stockholder or
limited partner of the Company, as such, shall have any liability for any
obligations of Company or for any claim based on, in respect of, or by reason
of, such obligations or their creation.
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10.22 "C" CORPORATION CONVERSION.
--------------------------
Upon not less than thirty (30) days prior written notice from Company to
Lenders, provided no Potential Event of Default or Event of Default shall have
then occurred and be continuing, Administrative Agent, Requisite Lenders and the
other Loan Parties shall take all actions, including, without limitation, the
execution and delivery of necessary amendments, modifications and supplements to
this Agreement and the other Loan Documents, as may reasonably be necessary in
order to facilitate the conversion of Holdings or Company from a limited
liability partnership structure to a corporate structure classified as a "C"
corporation under the Internal Revenue Code and to give effect to the intent of
this Agreement and the other Loan Documents after consummation of any such
conversion. Administrative Agent shall be entitled to reimbursement by Company
of its reasonable fees and expenses incurred in connection therewith and at all
times on and after any such conversion the First Priority Lien in the Collateral
shall remain in full force and effect.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
ANTHONY CRANE RENTAL, L.P.
By: Anthony Crane Rental, Inc.
as its general partner
By: /s/ David W. Mahokey
-----------------------------
Name: David W. Mahokey
Title: Vice President
HOLDINGS:
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: Anthony Crane Rental, Inc.
as its general partner
By: /s/ David W. Mahokey
-----------------------------
Name: David W. Mahokey
Title: Vice President
Notice Address:
1165 Camp Hollow Road
-----------------------------------
West Mifflin, PA 15122
-----------------------------------
Telephone: (412) 469-3700
--------------
Telecopy: (412) 469-0691
--------------
with a copy to:
Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Paige Daly
Telephone: (617) 572-3261
Facsimile: (617) 572-3274
and:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Chris Butler
Telephone: (312) 861-2298
Facsimile: (312) 861-2200
S-1
<PAGE>
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Christopher Butler
Telephone: (312) 861-2298
Facsimile: (312) 861-2200
S-2
<PAGE>
AGENTS AND LENDERS:
GOLDMAN SACHS CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By: /s/
---------------------------------
Authorized Signatory
Notice Address:
Goldman Sachs Credit Partners L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Tracey McCaffrey
-----------------
Telephone: (212) 902-1040
-----------------
Telecopy: (212) 357-4597
-----------------
S-3
<PAGE>
FLEET NATIONAL BANK,
individually and as Administrative Agent and Collateral
Agent
By: /s/ Guy Smith
---------------------------------
Name:Guy Smith
Title:
Notice Address:
Fleet National Bank
One Federal Street MA/OF/O7C
Boston, Massachusetts 02110
Attention: Timothy Callahan
----------------
Telephone: (617) 346-0339
----------------
Telecopy: (617) 346-5833
----------------
with a copy to:
Fleet National Bank
One Federal Street MA/OF/DO3C
Boston, Massachusetts 02110
Attention: Guy Smith/Mark Pelletier
------------------------
Telephone: (617) 346-0441
------------------------
Telecopy: (617) 346-4806
------------------------
S-4
<PAGE>
DLJ CAPITAL FUNDING, INC.,
individually and as Documentation Agent
By: /s/ Howard J. Phillips
---------------------------------------------
Name: Howard J. Phillips
Title: Managing Director
Notice Address:
DLJ Capital Funding, Inc.
277 Park Ave.
------------------------------------
New York, NY 10172
------------------------------------
------------------------------------
Attention: Greg Biddle
--------------
Telephone: (212) 892-6142
--------------
Telecopy: (212) 892-6031
--------------
S-5
<PAGE>
SCHEDULE 1.1(I)
ADJUSTMENTS TO BORROWING BASE
-----------------------------
[TO BE PROVIDED]
Shedule 1.1(i)-1
<PAGE>
SCHEDULE 1.1(II)
ADDBACKS TO EBITDA
------------------
Without duplication:
(i) Items classified as unusual or nonrecurring gains and losses
(including restructuring costs, severance and relocation costs, any
one-time expenses related to (or resulting from) any merger,
recapitalization or Permitted Acquisition);
(ii) Bain Management Fees (excluding any portion thereof representing
---------
reimbursement of expenses or fees for acquisitions, financings or
divestitures) paid during such period under the Bain Advisory
Services Agreement;
(iii) Unrealized gains or losses in respect of Interest Rate Agreements
and the related tax effects;
(iv) Unrealized gains or losses due solely to fluctuations in currency
values and the related tax effects;
(v) Any write-off of deferred financing costs incurred as a result of
the refinancing of the Indebtedness existing immediately prior to
the Closing Date;
(vi) Premiums, penalties and transaction costs in connection with the
refinancing of Indebtedness existing immediately prior to the
Closing Date;
(vii) All one-time cash compensation payments made in connection with the
Recapitalization Transactions and the transaction contemplated
hereby and the Related Agreements;
(viii) Non-recurring cash restructuring charges incurred in connection with
the Recapitalization Transactions and related transactions;
(ix) Non-recurring cash restructuring charges incurred in connection with
any Permitted Acquisition to the extent incurred within six months
following the consummation of such Permitted Acquisition and
deducted in determining Consolidated Net Income, not to exceed the
actual historical EBITDA of the New Business for the immediately
preceding four-quarter period;
(x) to the extent corresponding deductions are made in Consolidated
Adjusted EBITDA, indemnification payments received from third
parties and not otherwise included in the calculation of
Consolidated Adjusted EBITDA; and
(xi) All Transaction Costs.
Shedule 1.1(ii)-1
<PAGE>
EXHIBIT 10.4
================================================================================
CREDIT AGREEMENT
DATED AS OF JULY 22, 1998
AMONG
ANTHONY CRANE RENTAL, L.P.,
AS COMPANY,
ANTHONY CRANE RENTAL HOLDINGS, L.P.,
AS GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS ARRANGER AND SYNDICATION AGENT,
DLJ CAPITAL FUNDING, INC.,
AS DOCUMENTATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
================================================================================
<PAGE>
ANTHONY CRANE RENTAL, L.P.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1.
DEFINITIONS.............................. 2
1.1 Certain Defined Terms................................................ 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement...................................................... 42
1.3 Other Definitional Provisions and Rules of Construction.............. 43
1.4 Changes in GAAP...................................................... 43
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........... 44
2.1 Commitments; Making of Loans; the Register; Notes.................... 44
2.2 Interest on the Loans................................................ 50
2.3 Fees................................................................. 54
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments; Application of
Proceeds of Collateral and Payments Under Guaranties................. 54
2.5 Use of Proceeds...................................................... 61
2.6 Special Provisions Governing Eurodollar Rate Loans................... 61
2.7 Increased Costs; Taxes; Capital Adequacy............................. 63
2.8 Obligation of Lenders and Issuing Lenders to Mitigate................ 67
2.9 Defaulting Lenders................................................... 68
2.10 Removal or Replacement of a Lender................................... 69
SECTION 3.
LETTERS OF CREDIT........................... 71
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.............................................................. 71
3.2 Letter of Credit Fees................................................ 75
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
.................................................................... 76
3.4 Obligations Absolute................................................. 79
3.5 Indemnification; Nature of Issuing Lenders' Duties................... 79
3.6 Increased Costs and Taxes Relating to Letters of Credit.............. 81
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SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT............................ 82
4.1 Conditions to Initial Loans.......................................... 82
4.2 Conditions to All Loans.............................................. 91
4.3 Conditions to Letters of Credit...................................... 92
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES..... 92
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries......................................................... 93
5.2 Authorization of Borrowing, etc...................................... 94
5.3 Financial Condition.................................................. 95
5.4 No Material Adverse Change........................................... 96
5.5 Title to Properties; Liens; Real Property............................ 96
5.6 Litigation; Adverse Facts............................................ 97
5.7 Payment of Taxes..................................................... 97
5.8 Performance of Agreements; Materially Adverse Agreements............. 98
5.9 Governmental Regulation.............................................. 98
5.10 Securities Activities................................................ 98
5.11 Employee Benefit Plans............................................... 98
5.12 Certain Fees......................................................... 99
5.13 Environmental Protection............................................. 99
5.14 Employee Matters..................................................... 100
5.15 Solvency............................................................. 100
5.16 Matters Relating to Collateral....................................... 100
5.17 Related Agreements................................................... 101
5.18 Disclosure........................................................... 102
5.19 Subordination of Permitted Seller Notes and Shareholder Subordinated
Notes................................................................ 102
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS..... 103
6.1 Financial Statements and Other Reports............................... 103
6.2 Corporate/Partnership Existence, etc................................. 108
6.3 Payment of Taxes and Claims; Tax Consolidation....................... 108
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds...................................... 109
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender
Meeting.............................................................. 111
6.6 Compliance with Laws, etc............................................ 112
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's
Actions Regarding Hazardous Materials Activities, Environmental Claims
and Violations of Environmental Laws................................. 112
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2
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6.8 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents by Subsidiaries and Future Subsidiaries.................... 115
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral.................................................. 116
6.10 Interest Rate Protection............................................. 118
6.11 Post-Closing Deliveries.............................................. 119
6.12 Deposit Accounts and Cash Management Systems......................... 119
6.13 Year 2000............................................................ 119
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS...................... 119
7.1 Indebtedness......................................................... 120
7.2 Liens and Related Matters............................................ 122
7.3 Investments; Joint Ventures.......................................... 125
7.4 Contingent Obligations............................................... 127
7.5 Restricted Junior Payments........................................... 128
7.6 Financial Covenants.................................................. 129
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions..... 130
7.8 Fiscal Year.......................................................... 134
7.9 Sales and Lease-Backs................................................ 134
7.10 Sale or Discount of Receivables...................................... 134
7.11 Transactions with Shareholders and Affiliates........................ 134
7.12 Disposal of Subsidiary Interests..................................... 135
7.13 Conduct of Business.................................................. 135
7.14 Amendments or Waivers of Certain Agreements; Amendments of
Documents Relating to Subordinated Indebtedness and Senior Notes;
Designation of "Designated Senior Debt".............................. 136
SECTION 8.
EVENTS OF DEFAULT................................... 137
8.1 Failure to Make Payments When Due.................................... 137
8.2 Default in Other Agreements.......................................... 137
8.3 Breach of Certain Covenants.......................................... 138
8.4 Breach of Warranty................................................... 138
8.5 Other Defaults Under Loan Documents.................................. 138
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc................. 138
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc................... 139
8.8 Judgments and Attachments............................................ 139
8.9 Dissolution.......................................................... 139
8.10 Employee Benefit Plans............................................... 139
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8.11 Change in Control................................................... 139
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of
Obligations .................................................... 140
8.13 Failure to Consummate Recapitalization.............................. 140
SECTION 9.
AGENTS................................. 141
9.1 Appointment......................................................... 141
9.2 Powers and Duties; General Immunity................................. 143
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.................................................... 145
9.4 Right to Indemnity.................................................. 145
9.5 Successor Administrative Agent and Swing Line Lender................ 145
9.6 Collateral Documents and Guaranty................................... 146
SECTION 10.
MISCELLANEOUS........................ 147
10.1 Assignments and Participations in Loans and Letters of Credit....... 147
10.2 Expenses............................................................ 151
10.3 Indemnity........................................................... 152
10.4 Set-Off; Security Interest in Deposit Accounts...................... 153
10.5 Ratable Sharing..................................................... 153
10.6 Amendments and Waivers.............................................. 154
10.7 Independence of Covenants........................................... 155
10.8 Notices............................................................. 155
10.9 Survival of Representations, Warranties and Agreements.............. 156
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative............... 156
10.11 Marshalling; Payments Set Aside..................................... 156
10.12 Severability........................................................ 157
10.13 Obligations Several; Independent Nature of Lenders' Rights.......... 157
10.14 Headings............................................................ 157
10.15 Applicable Law...................................................... 157
10.16 Successors and Assigns.............................................. 157
10.17 Consent to Jurisdiction and Service of Process...................... 158
10.18 Waiver of Jury Trial................................................ 158
10.19 Confidentiality..................................................... 159
10.20 Counterparts; Effectiveness......................................... 159
Signature pages S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF REVOLVING NOTE
V FORM OF SWING LINE NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF OPINIONS OF COUNSEL TO LOAN PARTIES
VIII FORM OF OPINION OF O'MELVENY & MYERS LLP
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-BANK STATUS
XI FORM OF FINANCIAL CONDITION CERTIFICATE
XII FORM OF INTERCREDITOR AGREEMENT
XIII FORM OF PLEDGE AND SECURITY AGREEMENT
XIV FORM OF SUBSIDIARY GUARANTY
XV FORM OF HOLDINGS GUARANTY
XVI FORM OF MORTGAGE
XVII FORM OF COLLATERAL ACCESS AGREEMENT
XVIII FORM OF SUBORDINATION PROVISIONS
XIX FORM OF BORROWING BASE CERTIFICATE
XX FORM OF DEPOSIT ACCOUNT AGREEMENT
5
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SCHEDULES
1.1(i) ADJUSTMENTS TO BORROWING BASE
1.1(ii) ADDBACKS TO EBITDA
1.1(iii) EXISTING INVESTORS
1.1(iv) RECAPITALIZATION TRANSACTIONS
1.1(v) ORDERLY LIQUIDATION VALUE
1.1(vi) CERTAIN SUBSIDIARIES
1.1(vii) VALUATION PERCENTAGE/VALUATION METHODOLOGY
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP
4.1I CLOSING DATE MORTGAGED PROPERTIES
4.1K CLOSING DATE ENVIRONMENTAL REPORTS
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.13 ENVIRONMENTAL MATTERS
6.11 POST-CLOSING DELIVERIES
6.12 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
6
<PAGE>
ANTHONY CRANE RENTAL, L.P.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of July 22, 1998 and entered into by and
among ANTHONY CRANE RENTAL, L.P., a Pennsylvania limited partnership
("COMPANY"), ANTHONY CRANE RENTAL HOLDINGS, L.P., a Pennsylvania limited
partnership ("HOLDINGS"), GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as
arranger and syndication agent (in such capacity, "SYNDICATION AGENT"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "LENDER" and collectively as "LENDERS"), DLJ CAPITAL
FUNDING, INC. ("DLJ"), as documentation agent (in such capacity, "DOCUMENTATION
AGENT") and FLEET NATIONAL BANK ("FLEET"), as administrative agent for Lenders
(in such capacity, "ADMINISTRATIVE AGENT") and Fleet as Collateral Agent for
Lenders (in such capacity, "COLLATERAL AGENT").
R E C I T A L S
- - - - - - - -
WHEREAS, Bain and the other Investors propose to engage in a series of
Recapitalization Transactions, (capitalized terms used herein having the
meanings assigned to those terms in subsection 1.1), whereby the Bain Investors
will acquire on the Closing Date not less than 72% of all of the partnership
interests of Holdings;
WHEREAS, Company, which pursuant to the Recapitalization Transactions will
become a Subsidiary of Holdings, has requested Lenders to extend, and Lenders
have agreed to extend, certain credit facilities in an aggregate principal
amount of $275,000,000 to Company, the proceeds of which will be used (i)
together with (a) the proceeds of $50,000,000 in aggregate principal amount of
borrowings under the Term Loan Credit Agreement, (b) approximately $41,000,000
from the Equity Contribution, (c) not less than $155,000,000 in gross cash
proceeds from the issuance and sale of the Senior Notes, (d) not less than
$25,000,000 in gross cash proceeds from the issuance and sale of the Senior
Discount Debentures and (e) the issuance of Preferred Units with a liquidation
value of approximately $22,500,000 to permit consummation of the
Recapitalization Transactions, to refinance certain existing Indebtedness of
Company and to pay related fees and expenses, and (ii) to provide financing for
working capital and other general corporate purposes of Company and its
Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien on substantially all of its real, personal and
mixed property, including a pledge of all of the equity interests of each of its
Subsidiaries.
WHEREAS, Holdings, Anthony Crane Rental Corporation and all Subsidiaries of
Holdings and Company (other than Excluded Subsidiaries) and the General Partner
desire to guarantee the Obligations hereunder and under the other Loan Documents
and to secure their guaranties by
1
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granting to Administrative Agent, on behalf of Lenders, a First Priority Lien on
substantially all of their respective real, personal and mixed property,
including, without limitation, (i) a pledge of all of their partnership
interests of Company and (ii) a pledge of all of the equity interests of each of
their Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Holdings, Lenders and Agents
agree as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
---------------------
The following terms used in this Agreement shall have the following
meanings:
"ACCOUNTS" shall mean all of Company's Permitted Subsidiaries'
accounts receivable, whether now or hereafter existing, arising in the
ordinary course of business from Company's sales or leases of goods or
rendition of services made by Company's Permitted Subsidiaries, or through
any of Company's or Permitted Subsidiaries' divisions.
"ACQUISITION CONSIDERATION" means with respect to any Permitted
Acquisition the sum, without duplication, of any of the following
consideration paid or debt assumed in connection with such Permitted
Acquisition:
(i) Cash;
(ii) Securities (including, without limitation, Permitted
Seller Notes);
(iii) any other property;
(iv) principal amount of any Indebtedness assumed in connection
with the applicable Permitted Acquisition;
(v) maximum pretax payments anticipated to be made under
Permitted Earn-Out Agreements and other contractual
arrangements entered into pursuant to a Permitted
Acquisition (as such maximum amount is determined by
Company and discounted at a discount rate equal to the
interest rate applicable to Loans outstanding under the
Revolving Facility on the date of the consummation of such
Permitted Acquisition; and
(vi) the amount of any reserves established with respect to the
contingent liabilities assumed in connection with such
Permitted Acquisition (net of escrowed portion of the
purchase price amounts and indemnification arrangements
designed to apply to such liabilities).
"ADDITIONAL MORTGAGE" has the meaning assigned to that term in
subsection 6.9.
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to that term
in subsection 6.9.
2
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"ADDITIONAL SECURED INDEBTEDNESS" has the meaning assigned to that
term in subsection 7.1(xv).
"ADJUSTED BORROWING BASE AMOUNT" means as of any date of determination
the Borrowing Base Amount reflected on the most recently delivered
Borrowing Base Certificate, as such amount may be adjusted in accordance
with Schedule 1.1(i) annexed hereto.
---------------
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the
rate per annum obtained by dividing (i) the arithmetic average (rounded
--------
upward to the nearest 1/16 of one percent) of the offered quotations, if
any, to first class banks in the interbank Eurodollar market by Reference
Lenders for U.S. dollar deposits of amounts in same day funds comparable to
the respective principal amounts of the Eurodollar Rate Loans of Reference
Lenders for which the Adjusted Eurodollar Rate is then being determined
(which principal amount shall be deemed to be $1,000,000 in the case of any
Reference Lender not making, converting to or continuing such a Eurodollar
Rate Loan) with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the stated
-- -----
maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D
(or any successor category of liabilities under Regulation D); provided
--------
that if any Reference Lender fails to provide Administrative Agent with its
aforementioned quotation then the Adjusted Eurodollar Rate shall be
determined based on the quotation(s) provided to Administrative Agent by
the other Reference Lender(s).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and
"under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.
"AGENT" means, individually, each of Syndication Agent, Administrative
Agent and Documentation Agent, and "AGENTS" means Syndication Agent,
Administrative Agent and Documentation Agent, collectively.
3
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"AGREEMENT" means this Credit Agreement dated as of July 22, 1998, as
it may be amended, supplemented or otherwise modified from time to time.
"APPLICABLE BASE RATE MARGIN" means (a) for the period from the
Closing Date up to (but excluding) the date of commencement of the first
Pricing Period, 1.25% per annum, and (b) for any date thereafter, a rate
per annum equal to the percentage set forth below opposite the Applicable
Total Leverage Ratio in effect as of such date of determination, any change
in any such Applicable Base Rate Margin to be effective on the date of any
corresponding change in the Applicable Total Leverage Ratio.
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APPLICABLE APPLICABLE
TOTAL LEVERAGE BASE RATE MARGIN
RATIO
==============================================================
<S> <C>
greater than or equal to 1.25%
5.5:1.00
--------------------------------------------------------------
less than 5.5:1.00 but 1.00 %
greater than or equal to
5.0:1.00
--------------------------------------------------------------
less than 5.0:1.00 but 0.75 %
greater than or equal to
4.5:1.00
--------------------------------------------------------------
less than 4.5:1.00 but 0.50 %
greater than or equal to
4.0:1.00
--------------------------------------------------------------
less than 4.0:1.00 but 0.25 %
greater than or equal to
3.5:1.00
--------------------------------------------------------------
less than 3.5:1.00 0.00%
==============================================================
</TABLE>
"APPLICABLE COMMITMENT FEE PERCENTAGE" means (a) for the period from
the Closing Date up to (but excluding) the date of commencement of the
first Pricing Period, 1/2 of 1% per annum and (b) at any date of
determination thereafter, a rate per annum equal to the percentage set
forth below opposite the Applicable Total Leverage Ratio in effect as of
such date of determination, any change in the Applicable Commitment Fee
Percentage to be effective on the date of any corresponding change in the
Applicable Total Leverage Ratio.
4
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APPLICABLE APPLICABLE
TOTAL LEVERAGE COMMITMENT
RATIO FEE PERCENTAGE
-------------------------------------------------------------
<S> <C>
greater than or equal to 5.0:1.00 0.500%
-------------------------------------------------------------
less than 5.0:1.00 but greater 0.375%
than or equal to 4.0:1.00
-------------------------------------------------------------
less than 4.0:1.00 0.250%
=============================================================
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"APPLICABLE EURODOLLAR RATE MARGIN" means (a) for the period from the
Closing Date up to (but excluding) the date of commencement of the first
Pricing Period, 2.25% per annum, and (b) for any date thereafter, a rate
per annum equal to the percentage set forth below opposite the Applicable
Total Leverage Ratio in effect as of such date of determination, any change
in any such Applicable Eurodollar Rate Margin to be effective on the date
of any corresponding change in the Applicable Total Leverage Ratio.
<TABLE>
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APPLICABLE APPLICABLE
TOTAL LEVERAGE EURODOLLAR RATE
RATIO MARGIN
=============================================================
<S> <C>
greater than or equal to 2.25%
5.5:1.00
-------------------------------------------------------------
less than 5.5:1.00 but 2.00%
greater than or equal to
5.0:1.00
-------------------------------------------------------------
less than 5.0:1.00 but 1.75%
greater than or equal to
4.5:1.00
-------------------------------------------------------------
less than 4.5:1.00 but 1.50%
greater than or equal to
4.0:1.00
-------------------------------------------------------------
less than 3.5:1.00 but 1.25%
greater than or equal to
3.5:1.00
-------------------------------------------------------------
less than 3.5:1.00 1.00%
==============================================================
</TABLE>
"APPLICABLE TOTAL LEVERAGE RATIO" means, with respect to any date of
determination, the Total Leverage Ratio set forth in the Pricing
Certificate (as defined below) in effect for the Pricing Period (as defined
below) in which such date of determination occurs. For purposes of this
definition, (i) "PRICING CERTIFICATE" means an Officer's Certificate of
5
<PAGE>
Company certifying as to the Total Leverage Ratio as of the last day of any
Fiscal Quarter and setting forth the calculation of such Total Leverage
Ratio in reasonable detail, which Officer's Certificate may be delivered to
Administrative Agent at any time on or after the date of delivery by
Company of the Compliance Certificate (the "RELATED COMPLIANCE
CERTIFICATE") with respect to the period ending on the last day of such
Fiscal Quarter pursuant to subsection 6.1(iv), and (ii) "PRICING PERIOD"
means each period commencing on the first Business Day after the delivery
to Administrative Agent of a Pricing Certificate and ending on the first
Business Day after the next Pricing Certificate is delivered to
Administrative Agent; provided that, anything contained in this definition
--------
to the contrary notwithstanding, (a) the first Pricing Period for purposes
of calculating the Applicable Total Leverage Ratio shall commence no
earlier than March 31, 1999, and the Pricing Certificate in respect of such
first Pricing Period may be delivered at any time on or after such date and
shall relate to the most recent financial statements delivered by Company
to Administrative Agent prior to such date pursuant to subsection 6.1(ii)
or 6.1(iii), (b) the Applicable Total Leverage Ratio for the period from
the Closing Date to but excluding the date of commencement of such first
Pricing Period shall be deemed to be 5.50:1.00 for purposes of making the
relevant calculation referred to above and (c) in the event that, after the
commencement of such first Pricing Period, (X) Company fails to deliver a
Pricing Certificate to Administrative Agent setting forth the Total
Leverage Ratio as of the last day of any Fiscal Quarter on or before the
last day on which Company is required to deliver the Related Compliance
Certificate (such last day being the "CUTOFF DATE") and (Y) Administrative
Agent determines (each such determination being an "AGENT DETERMINATION")
on or after the Cutoff Date (on the basis of the Related Compliance
Certificate or a Pricing Certificate delivered after the Cutoff Date) that
the Applicable Total Leverage Ratio that would have been in effect if
Company had delivered a Pricing Certificate on the Cutoff Date is greater
than the Total Leverage Ratio set forth in the most recent Pricing
Certificate actually delivered by Company, then (1) the Applicable Total
Leverage Ratio in effect for purposes of making the relevant calculation
referred to above for the period from the Cutoff Date to the date of
delivery by Company of the next Pricing Certificate (or, if earlier, the
next date on which an Agent Determination is made) shall be the Total
Leverage Ratio determined pursuant to the Agent Determination and (2) on
the first Business Day after Administrative Agent delivers written notice
to Company of any Agent Determination, Company shall pay to Administrative
Agent, for distribution (as appropriate) to Lenders, an aggregate amount
equal to the additional interest, letter of credit fees and commitment fees
Company would have been required to pay in respect of all applicable Loans,
Letters of Credit or Commitments in respect of which any interest or fees
have been paid by Company during the period from the Cutoff Date to the
date such notice is given by Administrative Agent to Company if the amount
of such interest and fees had been calculated using the Applicable Total
Leverage Ratio based on such Agent Determination.
"ASSET SALE" means the sale by Holdings or any of its Subsidiaries to
any Person other than Holdings or any of its wholly-owned Subsidiaries of
(i) any of the stock of any of Holdings' Subsidiaries, (ii) substantially
all of the assets of any division or line of business of Holdings or any of
its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Holdings or any of its Subsidiaries; provided, however, that
-------- -------
Asset Sales shall not include (1) equipment sold in the ordinary course of
business, (2) any such other assets
6
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to the extent that the aggregate fair market value of an asset (at the time
of sale thereof) sold in any single transaction or related series of
transactions is equal to $1,000,000 or less, (3) any sale or discount, in
each case without recourse, of accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or
collection thereof, (4) any sale or exchange of specific items of
equipment, so long as the purpose of each such sale or exchange is to
acquire (and results within 365 days of such sale or exchange in the
acquisition of) replacement items of equipment which are the functional
equivalent of the item of equipment so sold or exchanged, (5) the leasing
(pursuant to operating leases in the ordinary course of business) or
licensing of real or personal property, including intellectual property,
(6) the sale for cash in the ordinary course of business of Cash
Equivalents, and (7) disposals or replacements of obsolete, uneconomical,
negligible, worn out or surplus assets or property in the ordinary course
of business; provided however that for purposes of determining Asset Sales
-------- -------
under subsection 2.4A(iii)(a), none of the above exclusions (excluding
clause (5)) to Asset Sales shall apply in the event that the amount of
proceeds of transactions relating to such exclusions in any Fiscal Year
shall exceed $10,000,000 in the aggregate.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of Exhibit IX annexed hereto.
----------
"BAIN" means Bain Capital, Inc. and/or one or more of its Affiliates.
"BAIN ADVISORY SERVICES AGREEMENT" means that certain Advisory
Services Agreement by and among Company, Holdings and Bain, in the form
delivered to Agents prior to the Closing Date and as such agreement may
thereafter be amended, supplemented or otherwise modified from time to time
to the extent permitted under subsection 7.14A.
"BAIN INVESTORS" means collectively, Bain/ACR, L.L.C., BCIP Associates
II, BCIP Associates II-B, Bain Capital Fund VI, L.P., Bain Capital Fund VI-
B, L.P., BCIP Trust Associates II, BCIP Trust Associates II-B, and BCIP
Associates II-C.
"BAIN MANAGEMENT FEES" means the fees (including one-time fees payable
in connection with acquisitions, divestitures and financings) and expenses
payable by Holdings or the Company to Bain pursuant to the Bain Advisory
Services Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE 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:
(i) the rate of interest announced publicly by Fleet in Boston,
Massachusetts, from time to time, as Fleet's base rate; and
(ii) 1/2 of 1% per annum above the Federal Funds Effective Rate.
7
<PAGE>
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"BORROWING BASE AMOUNT" means, at any date of determination, the sum
of:
(i) 100% of the Orderly Liquidation Value of Eligible Cranes and
Lifting Equipment; plus
----
(ii) 75% of the Orderly Liquidation Value of Eligible Trucks and
Trailers; plus
----
(iii) 85% of the aggregate value of Eligible Account Receivables;
plus
----
(iv) 75% of the aggregate value of Eligible Parts and Supplies
Inventory.
"BORROWING BASE CERTIFICATE" means a certificate substantially in the
form of Exhibit XIX annexed hereto delivered to Administrative Agent by
-----------
Company pursuant to subsections 4.1U and 6.1(xvii) or as otherwise provided
under Schedule 1.1(i).
---------------
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York and
Pennsylvania or is a day on which banking institutions located in such
state are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar
Rate Loans, any day that is a Business Day described in clause (i) above
and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, would be required to be accounted for as a capital
lease on the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means: (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one
of the two highest ratings obtainable from either Standard & Poor's Ratings
Group ("S&P") or Moody's Investors Service, Inc. ("MOODY'S"); (iii)
commercial paper maturity no more than one year from the date of creation
thereof and at the time of acquisition, having a rating of at least A-l
from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances (or, with respect to foreign banks, similar
instruments) maturing within one year from the date of acquisition thereof
issued by any bank organized under the laws of the United States of America
or any state or territory thereof or the District of Columbia, Japan or any
member
8
<PAGE>
of the European Economic Community or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of
not less than $200,000,000; (v) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications
specified in clause (iv) above; and (vi) investments in money market funds
which invest substantially all of their assets in securities of the types
described in clauses (i) through (v) above.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit X annexed hereto delivered by a Lender to
---------
Administrative Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means the date on or before July 31, 1998, on which the
initial Loans are made.
"CLOSING DATE MORTGAGE" has the meaning assigned to that term in
subsection 4.1I.
"CLOSING DATE MORTGAGED PROPERTY" has the meaning assigned to that
term in subsection 4.1I.
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the
Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouseman or processor (excluding lessees
of property or equipment in the ordinary course of business) in possession
of any Collateral, substantially in the form of Exhibit XVII annexed hereto
------------
with such changes thereto as may be agreed to by Administrative Agent in
the reasonable exercise of its discretion.
"COLLATERAL AGENT" means Fleet in its capacity as Collateral Agent
under the Collateral Documents and the InterCreditor Agreement.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Intercreditor Agreement, the Mortgages and all other instruments or
documents delivered by any Loan Party pursuant to this Agreement or any of
the other Loan Documents in order to grant to Collateral Agent, on behalf
of Lenders, a Lien on any real, personal or mixed property of that Loan
Party as security for the Obligations.
"COLLATERAL WARRANTIES" shall mean the representations and warranties
made pursuant to Sections 5.5A and 5.16A and Section 5 of the Pledge and
Security Agreement.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment
mechanism in connection with the
9
<PAGE>
purchase of any materials, goods or services by Company or any of its
Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"COMMON UNITS" means common partnership interests of Holdings
(including Class A and Class L units).
"COMPANY" has the meaning assigned to such term in the introduction to
this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit VI annexed hereto delivered to Administrative Agent by Company
----------
pursuant to subsection 6.1(iv).
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain Confidential
Information Memorandum prepared by GSCP, DLJ and Fleet relating to the Term
Loans and Revolving Loans dated June 1998.
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has substantially agreed in writing for the benefit
of Administrative Agent (which writing has been delivered to Administrative
Agent), whether under the terms of the applicable lease, under the terms of
a Landlord Consent and Estoppel, or otherwise, to the matters described in
the definition of "Landlord Consent and Estoppel," which interest, if a
subleasehold or sub-subleasehold interest, is not subject to any contrary
restrictions contained in a superior lease or sublease.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income (including,
without duplication, foreign withholding taxes and any payment of Permitted
Tax Distributions), (iv) total depreciation expense, (v) total amortization
expense, (vi) other non-cash items reducing Consolidated Net Income, and
(vii) to the extent deducted in determining Consolidated Net Income, those
items described on Schedule 1.1(ii) annexed hereto, less (a) other non-cash
---------------- ----
items increasing Consolidated Net Income, (b) to the extent included in
Consolidated Net Income, net gains on sales of used equipment, all of the
foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP, and (c) to the extent not otherwise
deducted in Consolidated Adjusted EBITDA, any payments made under Permitted
Earn-Out Agreements or other contractual payment related to a Permitted
Acquisition made after the date of consummation of such Permitted
Acquisition.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases
which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period
10
<PAGE>
that, in conformity with GAAP, are included in "purchases of property,
plant or equipment" or comparable items reflected in the consolidated
statement of cash flows of Company and its Subsidiaries.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period excluding, however, any
--------- -------
interest expense not payable in Cash (including interest expense paid in
kind and amortization of discount, of deferred financing fees, of premiums
paid on Hedge Agreements and of debt issuance costs).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total cash and
non-cash interest expense (including that portion attributable to Capital
Leases in accordance with GAAP, interest expense paid in kind and
amortization or write-off of discount, of deferred financing fees, of
premiums paid on Hedge Agreements and of debt issuance costs, and accretion
of any debt discount and capitalized interest) of Company and its
Subsidiaries on a consolidated basis in accordance with GAAP with respect
to all outstanding Indebtedness of Company and its Subsidiaries, including
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, net costs under
Interest Rate Agreements, commitment fees accrued under subsection 2.3A and
any administrative agent's fees payable to Administrative Agent, but
excluding, however, any amounts referred to in subsection 2.3 payable to
--------- -------
Agents and Lenders on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
--------
Person (other than a Subsidiary of Company) in which any other Person
(other than Company or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Company or is merged into or consolidated
with Company or any of its Subsidiaries or that Person's assets are
acquired by Company or any of its Subsidiaries, (iii) the income of any
Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not
at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) any gains or
losses attributable to Asset Sales, other than of new or used Rental
Equipment (without regard to the $1,000,000 limitation set forth in the
definition thereof or reserves relating thereto and the related tax
effects) or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net
extraordinary gains or net extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and
its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
11
<PAGE>
"CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another
if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (iii) under Hedge
Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described
under subclauses (X) or (Y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to (a) the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited, or (B) if neither amount in
clause (a) is stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform)
as determined by such Person in good faith. Contingent Obligations shall
not include standard contractual indemnities entered into in the ordinary
course of business.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other material instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is
subject.
"CORPORATE LOAN PARTY" means any Loan Party which is a corporation.
"CRANES AND LIFTING EQUIPMENT" shall mean each item of equipment
identified on Schedule 1.1(d)(A) to the Pledge and Security Agreement or on
any supplement thereto.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its
Subsidiaries is a party which is entered into for the purpose of hedging
against fluctuations in currency values; provided however that such
----------------
agreements (i) relate only to the purchase or sale of equipment used in the
business of the Company and (ii) are not entered into for speculative
purposes.
12
<PAGE>
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"DEPOSIT ACCOUNT AGREEMENT" means the Deposit Account Agreement
substantially in the form of Exhibit XX annexed hereto, as such Deposit
----------
Account Agreement may be amended, supplemented or otherwise modified from
time to time as permitted thereunder and hereunder.
"DLJ." has the meaning assigned to that term in the introduction to
this Agreement.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean the aggregate face amount of
Company's and Permitted Subsidiaries' Accounts as reflected in their books
and records in accordance with GAAP, payable in Dollars, that conform to
the warranties contained in this definition and to the Collateral
Warranties. Unless otherwise approved in writing by Administrative Agent,
no Account shall be deemed to be an Eligible Account Receivable if:
(i) the Account is unpaid 90 days or more from the original
invoice date; or
(ii) such Account if from the same account debtor (or any
affiliate thereof) and fifty percent (50%) or more, in face amount, of
other Accounts from such account debtor (or any affiliate thereof) are
unpaid 90 days or more after the original invoice date; or
(iii) the Account, when aggregated with all other Accounts of
such account debtor, exceeds fifteen percent (15%) in face value of
all consolidated Accounts of Company and Permitted Subsidiaries in the
aggregate then outstanding, to the extent of such excess; or
(iv) (A) the account debtor is also a creditor of Company or
Permitted Subsidiaries, to the extent of the amount owed by Company or
Permitted Subsidiaries to the account debtor, (B) the account debtor
has disputed its liability on, or the account debtor has made any
claim with respect to, such Account or any other Account due from such
account debtor to Company or Permitted Subsidiaries, which has not
been resolved to the extent of such dispute or (C) the Account
otherwise is or may become subject to any right of setoff by the
account debtor, to the extent of the amount of such setoff; or
(v) to the knowledge of the Company, the account debtor has
commenced a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter
13
<PAGE>
amended, or made an assignment for the benefit of creditors, or if a
decree or order for relief has been entered by a court having
jurisdiction in the premises in respect to the account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or if any other petition or other application
for relief under the federal bankruptcy laws has been filed by or
against the account debtor, or if the account debtor has failed,
suspended business, ceased to be solvent, or consented to or suffered
a receiver, trustee, liquidator or custodian to be appointed for it or
for all or a significant portion of its assets or affairs; or
(vi) the sale is to an account debtor outside the continental
United States, the United States Virgin Islands, or Canada, unless the
sale is (a) on letter of credit, guaranty or acceptance terms, in each
case acceptable to Administrative Agent in its sole discretion, or (b)
otherwise approved by and acceptable to Administrative Agent in its
reasonable discretion; or
(vii) the sale to the account debtor is on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return except in accordance with ordinary course of
business dealings or customary practice; or
(viii) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless Company or a
Permitted Subsidiary duly and effectively assigns its rights to
payment of such Account to Administrative Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727
et seq.); or
-- ----
(ix) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor or the
services giving rise to such Account have not been performed by
Company or a Permitted Subsidiary and accepted by the account debtor
or the Account otherwise does not represent a final sale; or
(x) the Account is not subject to a valid, enforceable and
First Priority perfected Lien in favor of Administrative Agent; or
(xi) Administrative Agent, in the exercise of its reasonable
discretion, determines it to be ineligible.
"ELIGIBLE ASSIGNEE" means (a) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of
any other country or a political subdivision thereof; provided that (x)
--------
such bank is acting through a branch or agency located in the United States
or (y) such bank is organized under the laws of a country that is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the
14
<PAGE>
Securities Act) which extends credit or buys loans as one of its businesses
including insurance companies, funds, investment companies and lease
financing companies; and (b) any Lender, any Affiliate of any Lender and,
with respect to any Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial
loans and that is managed or advised by the same investment advisor as such
Lender or by an Affiliate of such investment advisor; provided that no
--------
Affiliate of Holdings shall be an Eligible Assignee.
"ELIGIBLE CRANES AND LIFTING EQUIPMENT" shall mean each of the Cranes
and Lifting Equipment that (i) is owned solely by Company or a Permitted
Subsidiary and with respect to which Company or a Permitted Subsidiary has
good, valid and marketable title, (ii) unless in transit, is located on
property of a customer of Company or a Permitted Subsidiary, or is stored
on property that is either owned or leased by Company or a Permitted
Subsidiary (provided, that, with respect to Cranes and Lifting Equipment
stored on property leased by Company or a Permitted Subsidiary, Company or
a Permitted Subsidiary shall have delivered in favor of Administrative
Agent a Collateral Access Agreement from the landlord of such leased
property); (iii) is subject to a valid, enforceable and perfected First
Priority Lien in favor of Collateral Agent; (iv) is located in the United
States, unless otherwise undergoing ordinary maintenance, the United States
Virgin Islands, Canada or a Caribbean jurisdiction; (v) is not obsolete;
(vi) unless otherwise undergoing ordinary maintenance, is available for
such use, rent or lease in the business of Company and its Permitted
Subsidiaries, is in a condition suitable for such use, rent or lease and is
routinely so used, rented or leased; (vii) conforms to the warranties
contained in this definition and to the Collateral Warranties; and (viii)
Administrative Agent has not determined in its reasonable judgment to be
ineligible.
"ELIGIBLE PARTS AND SUPPLIES INVENTORY" shall mean each of the Parts
and Supplies Inventory that (i) is owned solely by Company or a Permitted
Subsidiary and with respect to which Company or a Permitted Subsidiary has
good, valid and marketable title; (ii) is stored on property that is either
owned or leased by Company or a Permitted Subsidiary (provided, that, with
respect to Parts and Supplies Inventory stored on property leased by
Company or a Permitted Subsidiary, Company or Permitted Subsidiary shall
have delivered in favor of the Agent a Collateral Access Agreement from the
landlord of such leased property); (iii) is subject to a valid, enforceable
and perfected First Priority Lien in favor of Collateral Agent; (iv) is
located in the United States, the United States Virgin Islands, Canada or a
Caribbean jurisdiction; (v) is not obsolete; (vi) otherwise conforms to the
warranties contained in this definition and to the Collateral Warranties;
(vii) is subject to record keeping, valuation methodologies, and process
and reporting controls reasonably acceptable to Administrative Agent; and
(viii) Administrative Agent has not determined in its reasonable judgment
to be ineligible.
"ELIGIBLE TRUCKS AND TRAILERS" shall mean each of the Trucks and
Trailers that (i) is owned solely by Company or a Permitted Subsidiary and
with respect to which Company or a Permitted Subsidiary has good, valid and
marketable title; (ii) unless in transit, is stored on property that is
either owned or leased by Company or a Permitted Subsidiary when not rented
to an account debtor pursuant to an equipment lease (provided,
15
<PAGE>
that, with respect to Trucks and Trailers stored on property leased by such
Company, such Company shall have delivered in favor of Administrative Agent
a Collateral Access Agreement from the landlord of such leased property);
(iii) is subject to a valid, enforceable and perfected First Priority Lien
(and no other Liens other than Permitted Encumbrances) in favor of
Administrative Agent; (iv) is located in the United States, the United
States Virgin Islands, Canada or a Caribbean jurisdiction; (v) is not
obsolete; (vi) unless otherwise undergoing ordinary maintenance is used or
available for use and in a condition available for use in the ordinary
course of business in connection with Company's and its Permitted
Subsidiary's equipment rental and sales activities; (vii) otherwise
conforms to the warranties contained in this definition and to the
Collateral Warranties; and (viii) Administrative Agent has not determined
in its reasonable judgment to be ineligible.
"EMPLOYMENT AGREEMENT" means the Employment Agreements between Company
and each of Sam Anthony and Ray G. Anthony in the form provided to Agents
pursuant to subsection 4.1C on or prior to the Closing Date.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of governmental authorities
relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare from environmental hazards (including
Hazardous Materials), in any manner applicable to Holdings or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et seq.), the
-- ---
Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the
-- ---
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the
-- ---
Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean
-- ---
Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15
-- ---
U.S.C. (S) 2601 et seq.), the Federal Insecticide, Fungicide and
-- ---
Rodenticide Act (7 U.S.C. (S)136 et seq.), the Occupational Safety and
-- ---
Health Act (29 U.S.C. (S) 651 et seq.), the Oil Pollution Act (33 U.S.C.
-- ---
(S) 2701 et seq.) and the Emergency Planning and Community Right-to-Know
-- ---
Act (42 U.S.C. (S) 11001 et seq.), each as amended or supplemented, any
-- ---
analogous present or future state or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.
16
<PAGE>
"EQUITY CONTRIBUTION" means, collectively, (i) the contribution by
Bain and Other Investors to Holdings of cash in exchange for Common Units
of Holdings and (ii) the rollover equity contribution by the Existing
Investors for Common Units, as contemplated by the Recapitalization
Transactions in the aggregate amount valued at not less than $41,000,000.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto, and the regulations
promulgated and rulings issued thereunder.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning
of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person
is a member; and (iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of which that
Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member. Any former ERISA
Affiliate of Holdings or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of Holdings or such Subsidiary within the
meaning of this definition with respect to the period such entity was an
ERISA Affiliate of Holdings or such Subsidiary and with respect to
liabilities arising after such period for which Holdings or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to make by its
due date a required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure to make any
required contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination of
any such Pension Plan resulting in liability pursuant to Section 4063 or
4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason
of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is
any potential liability therefor, or the receipt by Holdings, any of its
Subsidiaries or
17
<PAGE>
any of their respective ERISA Affiliates of notice from any Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA, or that it intends to terminate or has terminated under
Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission
which could give rise to the imposition on Holdings or any of its
Subsidiaries of fines, penalties, taxes or related charges under Chapter 43
of the Internal Revenue Code or under Section 409, Section 502(c), (i) or
(l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix)
the assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or the
assets thereof, or against Holdings or any of its Subsidiaries in
connection with any Employee Benefit Plan; (x) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan
to qualify for exemption from taxation under Section 501(a) of the Internal
Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCHANGE RATE" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter
of Credit, the nominal rate of exchange of the applicable Issuing Lender in
the New York foreign exchange market for the purchase by such Issuing
Lender (by cable transfer) of such currency in exchange for Dollars at
12:00 noon (New York time) one Business Day prior to such date, expressed
as a number of units of such currency per one Dollar.
"EXCLUDED SUBSIDIARIES" means, collectively, all Subsidiaries in which
the fair market value (as reasonably determined and certified by senior
management of the Company) of that Subsidiary's assets does not exceed
$1,000,000; provided, however, that no Subsidiary shall be an Excluded
-------- -------
Subsidiary if it acquires assets with a fair market value in excess of
$1,000,000 in the aggregate or incurs Indebtedness or Contingent
Obligations in excess of $1,000,000 in the aggregate.
----------
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement dated
as of September 28, 1994, by and among Company as borrower, certain
financial institutions and Corestates Bank, N.A. as agent, as amended prior
to the Closing Date.
"EXISTING INVESTORS" means certain existing shareholders, management
officers and employees of Company and other investors identified in
Schedule 1.1(iii) annexed hereto as Existing Investors.
-----------------
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<PAGE>
"FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Holdings or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate 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 which is a Business Day, the average of the
quotations for such day on such transactions received by Administrative
Agent from three Federal funds brokers of recognized standing selected by
Administrative Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in subsection
6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral (other than
Permitted Encumbrances) and (ii) such Lien is the only Lien (other than
Permitted Encumbrances and Liens permitted pursuant to subsection 7.2) to
which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its Subsidiaries
ending on the December 31 of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to
the calendar year in which such Fiscal Year ends.
"FLEET" has the meaning assigned to that term in the introduction to
this Agreement.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"FOREIGN CASH EQUIVALENTS" means certificates of deposit or bankers
acceptances of any bank organized under the laws of Canada, or a Caribbean
jurisdiction or any country that is a member of the European Economic
Community whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof, in each case with maturities of not more than one year from the
date of acquisition.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent and Swing Line Lender located at One Federal Street, Boston,
Massachusetts or (ii) such other office of Administrative Agent and Swing
Line Lender as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent and Swing Line Lender to
Company and each Lender.
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<PAGE>
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsections 1.2 and 1.4, generally accepted accounting
principles set forth in 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 may be approved
by a significant segment of the accounting profession, in each case as the
same are applicable to the circumstances as of the date of determination.
"GENERAL PARTNER" means ACR Management LLC, a Pennsylvania limited
liability company, the sole general partner of Company.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal,
state or local governmental authority, agency or court.
"GSCP" has the meaning assigned to that term in the introduction to
this Agreement.
"GUARANTIES" means the Holdings Guaranty and the Subsidiary Guaranty.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined in any statute or regulation as or included in the
definition in any statute or regulation of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous
waste", "infectious waste", "toxic substances", or any other term or
expression intended to define, list or classify substances by reason of
properties harmful to health, safety or the indoor or outdoor environment
(including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar meaning and regulatory
effect under any applicable Environmental Laws); (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde
foam insulation; (viii) polychlorinated biphenyls, including any oil or
dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and
(x) any other chemical, material or substance which could pose a hazard to
the health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, present or future
activity, event or occurrence involving any Hazardous Materials, including
the use, manufacture, possession, storage, holding, migration, Release,
threatened Release, discharge, placement, generation, transportation,
processing, treatment, abatement, removal, remediation, disposal,
20
<PAGE>
disposition or handling of any Hazardous Materials and any corrective
action or response action with respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or
currency values.
"HOLDINGS" has the meaning assigned to that term in the introduction
to this Agreement.
"HOLDINGS GUARANTY" means the Holdings Guaranty executed and delivered
by Holdings and the General Partner on the Closing Date, substantially in
the form of Exhibit XV annexed hereto, as such Holdings Guaranty may
----------
thereafter be amended, supplemented or otherwise modified from time to time
as permitted thereunder and hereunder.
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such
obligations incurred under ERISA and any accrued expenses or trade
payables), (a) which obligation in accordance with GAAP would be shown as a
liability on the balance sheet of such Person or (b) which purchase price
is evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person. The amount of any Indebtedness which is non-recourse to the
obligor thereunder or to any other obligor and for which recourse is
limited to an identified asset or assets shall be equal to the lesser of
(1) the stated amount of such obligation and (2) the fair market value of
such asset or assets. Obligations under Interest Rate Agreements and
Currency Agreements constitute (X) in the case of Hedge Agreements,
Contingent Obligations, and (Y) in all other cases, Investments, and in
neither case constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in subsection 10.3.
"INDEPENDENT PUBLIC ACCOUNTANT" means any of the five largest public
accounting firms in the United States selected by Holdings.
"INITIAL PERIOD" means the period commencing on and including the
Closing Date and ending on (but excluding) the earlier of (i) the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments and (ii) the date which is 30 days
after the Closing Date.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes which are used in the
conduct of the business of Holdings and its Subsidiaries as currently
conducted that are material to the condition
21
<PAGE>
(financial or otherwise), business or operations of Holdings and its
Subsidiaries, taken as a whole.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement
executed and delivered by Administrative Agent, Fleet, as administrative
agent for lenders under the Term Loan Credit Agreement, and Administrative
Agent on the Closing Date, substantially in the form of Exhibit XII annexed
-----------
hereto, as such Intercreditor Agreement may thereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate Loan,
each March 15, June 15, September 15 and December 15 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
--------
Period of longer than three months, "Interest Payment Date" shall also
include each date that is three months, or an integral multiple thereof,
after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Holdings or any of its
Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any
successor statute, and the regulations promulgated by the Internal Revenue
Service thereunder.
"INVENTORY" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are
then held by such Person for sale or lease, including raw materials and
work in process.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary
of Holdings), (ii) any direct or indirect redemption, retirement, purchase
or other acquisition for value, by any Subsidiary of Holdings from any
Person other than Holdings or any of its Subsidiaries, of any equity
Securities of such Subsidiary, (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business) or capital contribution by Holdings or any of its Subsidiaries
to any other Person, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from
sales to that other Person in the ordi nary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not
22
<PAGE>
constituting Hedge Agreements. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Invest ment.
"IP COLLATERAL" means, collectively, the "Intellectual Property" as
defined in the Pledge and Security Agreement.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any Subsidiary of any Person be considered
--------
to be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, reasonably satisfactory in form and
substance to Administrative Agent, pursuant to which such lessor
substantially agrees, for the benefit of Administrative Agent, (i) that
without any further consent of such lessor or any further action on the
part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to
the purchaser at a foreclosure sale or in a transfer in lieu of such a sale
(and to a subsequent third party assignee if Administrative Agent, any
Lender, or an Affiliate of either so acquires such Leasehold Property),
(ii) that such lessor shall not terminate such lease as a result of a
default by such Loan Party thereunder without first giving Administrative
Agent notice of such default and at least 60 days (or, if such default
cannot reasonably be cured by Administrative Agent within such period, such
longer period as may reasonably be required) to cure such default, (iii) to
the matters contained in a Collateral Access Agreement, and (iv) to such
other matters relating to such Leasehold Property as Administrative Agent
may reasonably request; provided, however, that Administrative Agent may
-------- -------
determine in its reasonable discretion that any one or more of the
agreements set forth in clauses (i) through (iv) are not required to be
included in a Landlord Consent and Estoppel with respect to a particular
Leasehold Property.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its
reasonable discretion as not being required to be included in the
Collateral.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include Swing Line Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the context of a
--------
particular Commitment, shall mean Lenders having that Commitment.
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<PAGE>
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
----
Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B). For purposes of this definition, any amount
described in clause (i) or (ii) of the preceding sentence which is
denominated in a currency other than Dollars shall be valued based on the
applicable Exchange Rate for such currency as of the applicable date of
determination.
"LEVERAGE RATIO" means the ratio of (i) the average outstanding
principal amount of the Loans and the Term Loans, less cash on hand, for
----
the quarterly period ending on the last day of any Fiscal Quarter to (ii)
Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then ended,
in each case as set forth in the most recent Compliance Certificate
delivered by Company to Administrative Agent pursuant to clause (iv) of
subsection 6.1; provided, however, that with respect to any period during
-------- -------
which a Permitted Acquisition occurs, for purposes of calculating the Total
Leverage Ratio under subsections 2.4A(iii)(d), Consolidated Adjusted EBITDA
shall be determined in accordance with the provisions of subsection 7.6D,
except that any cost savings that would otherwise be given effect in
calculating Consolidated Adjusted EBITDA as a result of such provisions
shall not be given effect until such cost savings are actually realized.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the
foregoing.
"LOAN" or "LOANS" means one or more of the Revolving Loans or Swing
Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guaranties, the Deposit Account
Agreement and the Collateral Documents.
"LOAN PARTY" means each of Holdings, General Partner, Company and any
of Company's Subsidiaries from time to time executing a Loan Document, and
"LOAN PARTIES" means all such Persons, collectively.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
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<PAGE>
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or
otherwise) of Holdings and its Subsidiaries, taken as a whole, or (ii) the
impairment of the ability of any Loan Party to perform, or of
Administrative Agent, Collateral Agent or Lenders to enforce, the
Obligations; provided that consummation of the Recapitalization
--------
Transactions in accordance with the terms of the Recapitalization Agreement
shall not be deemed to have a Material Adverse Effect for purposes of
subsection 5.4.
"MATERIAL CONTRACT" means any contract or arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to
renew would reasonably be expected to have a Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, however, that no Leasehold Property with respect to
--------
which the aggregate amount of all rents payable during any one Fiscal Year
never exceeds $1,000,000 shall be a "Material Leasehold Property".
"MATERIAL REAL PROPERTY ASSET" means a Real Property Asset reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, "Material Real Property Assets" shall not include
--------
any individual Real Property Asset that does not exceed $500,000 in fair
market value and, provided, further, that Real Property Assets that do not
--------
constitute Material Real Property Assets shall not exceed $3,000,000 in
aggregate fair market value.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit XVI annexed hereto
-----------
or in such other form as may be approved by Administrative Agent in its
reasonable discretion, in each case with such changes thereto as may be
recommended by Administrative Agent's local counsel based on local laws or
customary local mortgage or deed of trust practices, or (ii) at
Administrative Agent's option, in the case of an Additional Mortgaged
Property, an amendment to an existing Mortgage, in form reasonably
satisfactory to Administrative Agent, adding such Additional Mortgaged
Property to the Real Property Assets encumbered by such existing Mortgage,
in either case as such security instrument or amendment may be amended,
supplemented or otherwise modified from time to time. "MORTGAGES" means
all such instruments, including the Closing Date Mortgages and any
Additional Mortgages, collectively.
"MORTGAGED PROPERTY" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
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<PAGE>
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means the National Association of Insurance Commissioners.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and
when so received) received from such Asset Sale, net of any bona fide costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of
such Asset Sale as a result of any gain recognized in connection with such
Asset Sale and (ii) payment of the outstanding principal amount of, premium
or penalty, if any, and interest on any Indebtedness (other than the Loans)
that is secured by a Lien on the stock or assets in question and that is
repaid as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Holdings or any of its Subsidiaries (i) under any
casualty insurance policy in respect of a covered loss thereunder or (ii)
as a result of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net
of any actual and documented costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims
of Holdings or such Subsidiary in respect thereof.
"NEW BUSINESS" means any assets or business acquired by Company or any
of its Subsidiaries in a Permitted Acquisition.
"NOTES" means one or more of the Revolving Notes or Swing Line Note or
any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent
---------
pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
----------
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the
interest rate with respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice substantially
in the form of Exhibit III annexed hereto delivered by Company to
-----------
Administrative Agent pursuant to subsection 3.1B(i) with respect to the
proposed issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Agents, Lenders or their respective Affiliates or
any of them under the Loan
26
<PAGE>
Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate executed on behalf of such Person (x) if such Person is a
partnership, by the chairman of the board (if an officer) or chief
executive officer, chief operating officer, president or vice president or
by the chief financial officer of one of its partners and (y) if such
Person is a corporation, on behalf of such corporation by its chairman of
the board (if an officer), chief executive officer, chief operating officer
or its president or one of its vice presidents and, with respect to
financial matters only, by its principal financial officer or principal
accounting officer or its treasurer; provided that every Officers'
--------
Certificate with respect to the compliance with a condition precedent to
the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion
as to whether or not such condition has been complied with, and (iii) a
statement as to whether, in the opinion of the signers, such condition has
been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"ORDERLY LIQUIDATION VALUE" shall mean with respect to each item of
Rental Equipment, an amount equal to (a) (y) with respect to each item of
Rental Equipment in existence as of the Closing Date, the appraised orderly
liquidation value (assuming liquidation within an 180-day period) of each
item of Rental Equipment as of the Closing Date specified on Schedule
--------
1.1(v) annexed hereto, and (z) with respect to each item of Rental
------
Equipment acquired subsequent to the Closing Date, the orderly liquidation
value (assuming liquidation within an 180-day period) of such Rental
Equipment (which shall not, in any event, exceed the purchase price
thereof, net of shipping costs and taxes, as determined [specify
methodology] pursuant to Schedule 1.1(vii) in form and substance reasonably
-----------------
satisfactory to Administrative Agent times (B) the Valuation Percentage.
-----
"OTHER INVESTORS" means [OPEN]
"PARTNERSHIP AGREEMENTS" means limited partnership agreements of
Holdings and Company.
"PARTNERSHIP LOAN PARTY" means any Loan Party which is a general or
limited partnership.
"PARTS AND SUPPLIES INVENTORY" shall mean as of any date of
determination Company's or a Permitted Subsidiary's inventory (valued at
the lower of book value and market value) consisting of parts and supplies
(excluding fluids and de minimus amounts of
27
<PAGE>
other parts and supplies) being used or reasonably expected to be used in
the immediately succeeding twelve months in connection with the Rental
Equipment.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ACQUISITION" means the acquisition of assets or a business
effected in accordance with the provisions of subsection 7.7(xvii).
"PERMITTED DOMESTIC SUBSIDIARY" means (y) the Subsidiaries set forth
at Schedule 1.1(vi) and (z) any wholly-owned Subsidiary of Company which is
----------------
organized under the laws of the United States or any state thereof;
provided however that all such Subsidiaries have not been capitalized in
-------- -------
Cash or other property, including equipment, of Company or another
Subsidiary of Company that exceed, in the aggregate, more than 3% of the
total assets of Company; provided however that all the assets thereof shall
-------- -------
be subject to a first priority perfected Lien in favor of the Collateral
Agent, and the Administrative Agent shall be reasonably satisfied that such
Liens are substantially similar in respect of priority, enforceability and
realization to those granted to Collateral Agent by the Company.
"PERMITTED EARN-OUT AGREEMENTS" means any other agreement by Company
to pay the seller or sellers of any Person or assets acquired in accordance
with the provisions of subsection 7.7(xiii) at any time following the
consummation of such acquisition by reference to the financial performance
of the person or assets acquired; provided that the aggregate amount of all
payments required to be made under Permitted Earn-Out Agreements shall not
exceed [15]% of the total consideration under any Permitted Acquisition.
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly
prohibited by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess
of 5 days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made
for any such contested amounts, and (2) in the case of a Lien
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<PAGE>
with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of
the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long
as no foreclosure, sale or similar proceedings have been commenced
with respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral Documents and
not interfering in any material respect with the ordinary conduct of
the business of Holdings or any of its Subsidi aries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(vi) easements, rights-of-way, restrictions, encroachments,
and other defects or irregularities in title, in each case which do
not and will not interfere in any material respect with the ordinary
conduct of the business of Holdings or any of its Subsidiaries or
result in a material diminution in the value of any Collateral as
security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease (b) restriction or encumbrance that the interest or title of
such lessor or sublessor may be subject to, or (c) subordination of
the interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause (b), so
long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to operating leases or Capital Leases permitted by
this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of
any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar
29
<PAGE>
agreements entered into in the ordinary course of business of Company
and its Subsidiaries;
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Holdings or any of its Subsidiaries in the
ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of Holdings or such
Subsidiary; and
(xiii) Liens existing on the Closing Date and described in the
Closing Date Mortgage Policies.
"PERMITTED FOREIGN SUBSIDIARY" means any wholly-owned Subsidiary of
Company which is organized under the laws of Canada or a Caribbean
jurisdiction; provided however that all such Subsidiaries have not been
-------- -------
capitalized in Cash or other property, including equipment, by Company or
another Subsidiary of Holdings that exceeds, in the aggregate, more than 3%
of the total assets of Company; provided however that all the assets
-------- -------
thereof shall be subject to a perfected First Priority Lien in favor of the
Collateral Agent, and Administrative Agent shall be reasonably satisfied
that such Liens are substantially similar in respect of priority,
enforceability and realization to those granted to Collateral Agent by the
Company.
"PERMITTED SELLER NOTE" means a promissory note containing
subordination provisions in substantially the form of, or no less favorable
to Lenders (in the reasonable judgment of Administrative Agent) than the
subordination provisions contained in, Exhibit XVIII annexed hereto,
-------------
representing any Indebtedness of Holdings or Company incurred in connection
with any Permitted Acquisition payable to the seller in connection
therewith, as such note may be amended, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.14B; provided
--------
that no Permitted Seller Note shall (i) be guarantied by any Subsidiary of
Company or secured by any property of Holdings, Company or any of its
Subsidiaries or (ii) bear cash interest at a rate greater than 15% per
annum; and provided further, that no Permitted Seller Note shall provide
-------- -------
for any prepayment or repayment of all or any portion of the principal
thereof prior to the date of the final scheduled installment of principal
of any of the Loans.
"PERMITTED SUBSIDIARIES" means, collectively, Permitted Domestic
Subsidiaries, Permitted Foreign Subsidiaries and Excluded Subsidiaries.
"PERMITTED TAX DISTRIBUTION" means, for so long as Holdings or Company
is treated as a partnership or disregarded as an entity separate from its
owners for federal income tax purposes, distributions to the partners of
Holdings or Company in an amount with respect to any period after June 30,
1998, not to exceed the amount of distributions, whether paid or accrued,
necessary to permit Holdings' and Company's partners to pay federal and
state income tax liabilities arising from income of Holdings or Company and
their respective Subsidiaries and taxable to such partners, including the
tax distributions contemplated by Holdings' and Company's respective
partnership agreements attributable to such partners solely as a result of
Holdings or Company (and any intermediate entity
30
<PAGE>
through which any such partner owns its interest in Holdings or Company)
being a partnership or similar pass-through entity for federal income tax
purposes.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments (whether federal, state or local, domestic or foreign, and
including political subdivisions thereof) and agencies or other
administrative or regulatory bodies thereof.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement substantially in the form of Exhibit XIII annexed hereto, as such
------------
Pledge and Security Agreement may be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"PLEDGED COLLATERAL" means, collectively, the "Pledged Collateral" as
defined in the Pledge and Security Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PREFERRED UNITS" means preferred interests of Holdings with an
initial liquidation value of $22,500,000, which were initially issued to
Anthony Iron and Metal Company pursuant to the Recapitalization
Transactions.
"PRINCIPALS" means any Bain Investor, any Other Investor, their
respective Related Parties, and any Affiliate of any such Person.
"PROPOSED INSURANCE REINVESTMENT PROCEEDS" has the meaning assigned to
that term in subsection 6.4C.
"PRO RATA SHARE" means (i) with respect to all payments, computations
and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or
participations therein purchased by any Lender or any participations in any
Swing Line Loans purchased by any Lender, the percentage obtained by
dividing (x) the Revolving Loan Exposure of that Lender by (y) the
-------- --
aggregate Revolving Loan Exposure of all Lenders, and (ii) for all other
purposes with respect to each Lender, the percentage obtained by dividing
--------
(x) the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, in any such case as the applicable
percentage may be adjusted by assignments permitted pursuant to subsection
10.1. The initial Pro Rata Share of each Lender for purposes of each of
clauses (i) and (ii) of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
------------
31
<PAGE>
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary in order to
create or perfect Liens on any IP Collateral.
"QUALIFIED PREFERRED UNITS" means payment-in-kind preferred units of
Holdings that have no cash-call or cash payment provision exercisable
during the term of the Loans or the Term Loan.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"RECAPITALIZATION AGREEMENT" means that certain Amended and Restated
Recapitalization Agreement dated as of July __, 1998, by and among Company,
Bain/ACR L.L.C. and ACR Management L.L.C., in the form delivered to Agents
and Lenders prior to their execution of this Agreement and as such
agreement may be amended from time to time thereafter to the extent
permitted under subsection 7.14A.
"RECAPITALIZATION FINANCING REQUIREMENTS" means the aggregate of all
amounts necessary to finance the Recapitalization Transactions.
"RECAPITALIZATION REVOLVING LOANS" has the meaning assigned to that
term in subsection 2.5A.
"RECAPITALIZATION TRANSACTIONS" means the series of transactions
described in Schedule 1.1(iv) annexed hereto.
----------------
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Administrative Agent's reasonable
judgment, to give constructive notice of such Leasehold Property to third-
party purchasers and encumbrancers of the affected real property. For
purposes of this definition, the term "RECORD DOCUMENT" means, with respect
to any Leasehold Property, (a) the lease evidencing such Leasehold Property
or a memorandum thereof, executed and acknowledged by the owner of the
affected real property, as lessor, or (b) if such Leasehold Property was
acquired or subleased from the holder of a Recorded Leasehold Interest, the
applicable assignment or sublease document, executed and acknowledged by
such holder, in each case in form sufficient to give such constructive
notice upon recordation and otherwise in form reasonably satisfactory to
Administrative Agent.
"REFERENCE LENDERS" means Fleet and [OTHER SYNDICATE MEMBER BANKS].
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(iii).
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
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<PAGE>
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means, collectively, the Recapitalization
Agreement, the Securityholders Agreement, the Bain Advisory Services
Agreement, the Partnership Agreements, the Senior Notes, the Senior Note
Indenture, the Senior Discount Debentures and the Senior Discount
Indenture.
"RELATED PARTY" means (i) with respect to any Person, any stockholder,
officer, employee or partner of such Person and (a) trusts for the benefit
of such Person or the spouses, issue, parents or other relatives of such
Person, (b) entities controlling or controlled by such Person and (c) in
the event of death of any such individual Person, heirs or testamentary
legatees of such Person and, in addition, with respect to Bain, shall
include the Bain Investors.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials),
including the migration of any Hazardous Materials through the air, soil,
surface water or groundwater.
"RENTAL EQUIPMENT" shall mean (i) all of the Cranes and Lifting
Equipment, and (ii) all of the Trucks and Trailers, that in each case is
held for resale or held for lease by Company.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the aggregate Revolving Loan Exposure of all Lenders.
"RESPONSIBLE OFFICER" means any of the chairman of the board (if an
officer), the president, any senior or executive vice president, the
general counsel, its principal financial officer or principal accounting
officer, the secretary or the treasurer of Holdings or, as applicable, any
Subsidiary of Holdings.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock, partnership interest or equivalent equity interests of Holdings or
Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock, partnership interest or equivalent equity
interests to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock of Holdings or
Company now or hereafter outstanding, (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock of Holdings or Company now
or hereafter outstanding, and (iv) any cash payment or prepayment of
principal of, premium, if any, or interest on, or
33
<PAGE>
redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, any
Subordinated Indebtedness or the Senior Notes.
"REVOLVER LEVERAGE RATIO" means the ratio of (i) average principal
amount of Revolving Loans outstanding, less cash on hand, for the quarterly
period ending on the last day of any Fiscal Quarter to (ii) Consolidated
Adjusted EBITDA for the four-Fiscal Quarter period then ended, in each case
as set forth in the most recent Compliance Certificate delivered by Company
to Administrative Agent pursuant to clause (iv) of subsection 6.1.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(i), and "REVOLVING
LOAN COMMITMENTS" means such commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earlier of (i)
July 22, 2004 or (ii) the date of termination in whole of the Revolving
Loan Commitments pursuant to subsection 2.4A or Section 8.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b)
----
in the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that Lender (in
each case net of any participations purchased by other Lenders in such
Letters of Credit or any unreimbursed drawings thereunder) plus (c) the
----
aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any
Letters of Credit plus (d) in the case of Swing Line Lender, the aggregate
----
outstanding principal amount of all Swing Line Loans (net of any
participations therein purchased by other Lenders) plus (e) the aggregate
----
amount of all participations purchased by that Lender in any outstanding
Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(i).
"REVOLVING NOTES" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Revolving Loans of any Lenders,
substantially in the form of Exhibit IV annexed hereto, as they may be
----------
amended, supplemented or otherwise modified from time to time.
"SECURED PARTIES" has the meaning assigned to that term in the
Intercreditor Agreement.
"SECURITIES" means any stock, shares, partnership interests,
membership interests, voting trust certificates, certificates of interest
or participation in any profit-sharing agreement or arrangement, options,
warrants, bonds, debentures, notes, or other evidences
34
<PAGE>
of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or
any certificates of interest, shares or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SECURITYHOLDERS AGREEMENT" means that certain securityholders
agreement among the General Partner, Holdings and various equityholders of
such entities as amended, modified and supplemented from time to time to
the extent permitted under sub section 7.14B.
"SENIOR DISCOUNT DEBENTURES" means $25,000,000 in initial aggregate
principal amount of Senior Discount Debentures of Holdings and Anthony
Crane Holdings Capital Corporation issued pursuant to the Senior Discount
Indenture, as amended from time to time as permitted pursuant to subsection
7.14.
"SENIOR DISCOUNT INDENTURE" means the indenture pursuant to which the
Senior Discount Debentures are issued, as such indenture may be amended
from time to time to the extent permitted under subsection 7.14B.
"SENIOR NOTE INDENTURE" means the indenture pursuant to which the
Senior Notes are issued, as such indenture may be amended from time to time
to the extent permitted under subsection 7.14B.
"SENIOR NOTES" means the $155,000,000 in aggregate principal amount of
Senior Notes due July, 2008 of Company and Anthony Crane Capital
Corporation issued pursuant to the Senior Note Indenture, including any
notes issued in exchange for such notes as contemplated under the Senior
Note Indenture, as amended from time to time as permitted pursuant to
subsection 7.14B.
"SHAREHOLDER SUBORDINATED NOTE" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in
any way by Company or any of its Subsidiaries) containing subordination
provisions substantially in the form of, or no less favorable to Lenders
(in the reasonable judgment of Administrative Agent) than the subordination
provisions contained in Exhibit XVIII annexed hereto, as such note may be
-------------
amended, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.14B.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property
(sold as a going concern) of such Person is (y) greater than the total
amount of liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become absolute
and matured considering all financing alternatives and potential asset
sales reasonably available to such
35
<PAGE>
Person; (ii) such Person's capital is not unreasonably small in relation to
its business or any contemplated or undertaken transaction; and (iii) such
Person does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as
they become due; and (B) such Person is "solvent" within the meaning given
that term and similar terms under applicable laws relating to fraudulent
transfers and conveyances. For purposes of this definition, the amount of
any contingent liability at any time shall be computed as the amount that,
in light of all of 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 standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Holdings or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Holdings or any of its Subsidiaries, (iii) the obligations of third party
insurers of Holdings or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers, (iv) obligations
with respect to Capital Leases or Operating Leases of Holdings or any of
its Subsidiaries, (v) performance, payment, deposit or surety obligations
of Holdings or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice
in the industry, and (vi) such other obligations of Company and its
Subsidiaries as are reasonably acceptable to Administrative Agent and the
Issuing Lender and otherwise permitted to exist pursuant to the terms of
this Agreement; provided that Standby Letters of Credit may not be issued
--------
for the purpose of supporting (a) trade payables or (b) any Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code).
"SUBORDINATED INDEBTEDNESS" means (i) any Permitted Seller Notes, (ii)
any Shareholder Subordinated Notes, and (iii) any other Indebtedness of
Holdings, or any of its Subsidiaries subordinated in right of payment to
the Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance reasonably
satisfactory to Administrative Agent and Requisite Lenders.
"SUBSIDIARY" with respect to any Person means any corporation,
partnership or limited liability company organized under the laws of the
United States of America or a jurisdiction thereof, the financial
statements of which are consolidated with the financial statements of such
Person for GAAP financial reporting purposes. The term "Subsidiary", when
used herein without reference to any particular Person, shall mean a
Subsidiary of the Company.
"SUBSIDIARY GUARANTOR" means any Subsidiary of Holdings, other than
Company, that executes and delivers a counterpart of the Subsidiary
Guaranty on the Closing Date or from time to time thereafter pursuant to
subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by all Subsidiaries of Holdings (other than Company and the
Excluded Subsidiaries) on the Closing Date and to be executed and delivered
by additional Subsidiaries of Holdings from
36
<PAGE>
time to time thereafter in accordance with subsection 6.8, substantially in
the form of Exhibit XIV
-----------
annexed hereto, as such Subsidiary Guaranty may hereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"SWING LINE LENDER" means Fleet, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(ii).
"SWING LINE LOANS" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(ii).
"SWING LINE NOTE" means any promissory note of Company issued pursuant
to subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender,
substantially in the form of Exhibit V annexed hereto, as it may be
---------
amended, supplemented or otherwise modified from time to time.
"SYNDICATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person
--------
shall be construed as a reference to a tax imposed by the jurisdiction in
which that Person is organized or in which that Person's principal office
(and/or, in the case of a Lender, its lending office) is located or in
which that Person (and/or, in the case of a Lender, its lending office) is
deemed to be doing business on all or part of the net income, profits or
gains (whether worldwide, or only insofar as such income, profits or gains
are considered to arise in or to relate to a particular jurisdiction, or
otherwise) of that Person (and/or, in the case of a Lender, its lending
office).
"TERM LOAN CREDIT AGREEMENT" means that certain Term Loan Credit
Agreement of even date herewith, by and among Company, Holdings, GSCP, as
Arranger and Syndication Agent, Fleet, as Collateral Agent and
Administrative Agent, and DLJ, as Documentation Agent, as such Term Loan
Credit Agreement may be amended, supplemented, refinanced, renewed,
extended or otherwise modified from time to time to the extent permitted
under subsection 7.14C.
"TERM LOAN CREDIT DOCUMENTS" means the Term Loan Credit Agreement, the
promissory notes issued thereunder and each other document executed in
connection with the Term Loan Credit Agreement.
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<PAGE>
"TERM LOANS" means the second priority secured term loans of Company
outstanding pursuant to the Term Loan Credit Agreement in the original
principal amount of $50,000,000.
"TITLE COMPANY" means, collectively, First American Title Insurance
Company and/or one or more other title insurance companies reasonably
satisfactory to Syndication Agent and Administrative Agent.
"TOTAL LEVERAGE RATIO" means the ratio of (i) average Consolidated
Total Debt, less cash on hand, for the quarterly period ending on the last
----
day of any Fiscal Quarter to (ii) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period then ended, in each case as set forth in the
most recent Compliance Certificate delivered by Company to Administrative
Agent pursuant to clause (iv) of subsection 6.1; provided, however, that
-------- -------
with respect to any period during which a Permitted Acquisition occurs, for
purposes of calculating the Total Leverage Ratio in the definition of
Applicable Total Leverage Ratio, Consolidated Adjusted EBITDA shall be
determined in accordance with the provisions of subsection 7.6D, except
that any cost savings that would otherwise be given effect in calculating
Consolidated Adjusted EBITDA as a result of such provisions shall not be
given effect until such cost savings are actually realized.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
----
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
----
"TRANSACTION COSTS" means the fees, costs, premiums, penalties and
expenses payable by Holdings and Company in connection with the
transactions contemplated by the Loan Documents, the Term Loan Credit
Documents and the Related Agreements.
"TRUCKS AND TRAILERS" means each item of equipment identified on
Schedule 1.1(d)B to the Pledge and Security Agreement, as it may be
supplemented from time to time.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"VALUATION PERCENTAGE" means, at any date of determination, the
percentage (which shall not be greater than 1.0) set forth on Schedule
--------
1.1(v) hereto applicable as of such date of determination with respect to
------
the item of Rental Equipment the Orderly Liquidation Value of which is then
being determined.
"WHOLLY-OWNED" means, with respect to any Subsidiary, that all of the
equity Securities of such Subsidiary are owned by one other Person;
provided, any Subsidiary that
---------
38
<PAGE>
is a limited partnership shall be deemed to be wholly-owned by another
Person so long as such other Person owns all of the limited partnership
interests of such Subsidiary.
"YEAR 2000 COMPLIANT" means with regard to any Person that by December
31, 1998 all computer applications that are material to Holdings and its
Subsidiaries' business and operations will, prior to _______________, be
able to perform properly date-sensitive functions for all dates before and
after January 1, 2000, except to the extent that a failure to do so could
not reasonably be expected to have a Material Adverse Effect.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
------------------------------------------------------------------------
AGREEMENT.
- ---------
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial state ments and other information required to
be delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and
(xiii) of subsection 6.1 shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
December 31, 1997 financial statements referred to in subsection 5.3.
Notwithstanding the foregoing, except as otherwise specifically provided herein,
all computations determining compliance with subsection 2.4 and Section 7, and
the calculation of the Total Leverage Ratio, the Leverage Ratio and Revolving
Total Leverage Ratio for all purposes set forth herein, in each case, including
the definitions used therein, shall utilize accounting principles and policies
in effect at the time of the preparation of, and in conformity with those used
to prepare, the December 31,1997 financial statements of Holdings and its
Subsidiaries delivered to the Lenders, but shall not give effect to purchase
accounting adjustments required or permitted by APB 16 and its interpretations
(including non-cash write-ups and non-cash charges relating to inventory, fixed
assets and in-process research and development, in each case arising in
connection with any Permitted Acquisitions) and APB 17 and its interpretations
(including non-cash charges relating to intangibles and goodwill arising in
connection with any Permitted Acquisitions).
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
-------------------------------------------------------
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
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D. Each reference to a "Fiscal Quarter period" of a specified number of
Fiscal Quarters shall be a reference to a period of consecutive Fiscal Quarters
of such number.
1.4 CHANGES IN GAAP.
---------------
In the event that a change in GAAP or other accounting principles and
policies after the date hereof affects in any material respect the calculations
of the compliance by Holdings and its Subsidiaries with the covenants contained
herein, Lenders, Company and Holdings agree to negotiate in good faith to amend
the affected covenants (and related definitions) to compensate for the effect of
such changes so that the restrictions, limitations and performance standards
effectively imposed by such covenants, as so amended, are substantially
identical to the restrictions, limitations and performance standards imposed by
such covenants as in effect on the date hereof; provided that if Requisite
--------
Lenders, Company and Holdings fail to reach agreement with respect to such
amendment within a reasonable period of time following the date of effectiveness
of any such change, calculation of compliance by Holdings and its Subsidiaries
with the covenants contained herein shall be determined in accordance with GAAP
as in effect immediately prior to such change.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
-------------------------------------------------
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Holdings and Company
herein set forth, each Lender hereby severally agrees to make the Loans
described in subsections 2.1A(i) and Swing Line Lender hereby agrees to make the
Loans described in subsection 2.1A(ii).
(i) Revolving Loans. Each Lender severally agrees, subject to the
---------------
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Company
from time to time during the period from the Closing Date to but excluding
the Revolving Loan Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5. The
original amount of each Lender's Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate original
------------
amount of the Revolving Loan Commitments is $275,000,000; provided that the
--------
Revolving Loan Commitments of Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further that the amount of the Revolving Loan
-------- -------
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4A(ii). Each Lender's
Revolving Loan Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than that date. Amounts
borrowed under
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this subsection 2.1A(i) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding
in no event shall the Total Utilization of Revolving Loan Commitments at
any time exceed the lesser of (y), the Revolving Loan Commitments then in
effect and (z) the Adjusted Borrowing Base Amount then in effect.
(ii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
----------------
the limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company from time to time
during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date by making Swing Line Loans to Company in an
aggregate amount not exceeding the amount of the Swing Line Loan Commitment
to be used for the purposes identified in subsection 2.5, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving Loan Commitment. The original amount of the Swing Line
Loan Commitment is $15,000,000; provided that any reduction of the
--------
Revolving Loan Commitments made pursuant to subsection 2.4A(ii) which
reduces the aggregate Revolving Loan Commitments to an amount less than the
then current amount of the Swing Line Loan Commitment shall result in an
automatic corresponding reduction of the Swing Line Loan Commitment to the
amount of the Revolving Loan Commitments, as so reduced, without any
further action on the part of Company, Administrative Agent or Swing Line
Lender. The Swing Line Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Swing Line Loans and all other amounts
owed hereunder with respect to the Swing Line Loans shall be paid in full
no later than that date. Amounts borrowed under this subsection 2.1A(ii)
may be repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4A(ii), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 11:00 A.M. (New York City
time) on the first Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Borrowing given by Company)
requesting Lenders to make Revolving Loans that are Base Rate Loans on such
Funding Date in an amount equal to the amount of such Swing Line Loans (the
"REFUNDED SWING LINE LOANS") outstanding on the date such notice is given
which Swing Line Lender requests Lenders to prepay. Anything contained in
this Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and not
to Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Revolving Loans are made, Swing
Line Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender, and such portion of the Swing Line Loans deemed to be so paid shall
no longer be outstanding as Swing Line Loans and
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shall no longer be due under the Swing Line Note, if any, of Swing Line
Lender but shall instead constitute part of Swing Line Lender's outstanding
Revolving Loans and shall be due under the Revolving Note, if any, of Swing
Line Lender. Company hereby authorizes Administrative Agent and Swing Line
Lender to charge Company's accounts with Administrative Agent and Swing
Line Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line
Loans to the extent the proceeds of such Revolving Loans made by Lenders,
including the Revolving Loan deemed to be made by Swing Line Lender, are
not sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to Swing Line Lender
should be recovered by or on behalf of Company from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the
loss of the amount so recovered shall be ratably shared among all Lenders
in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect
of any outstanding Swing Line Loans or (b) the Revolving Loan Commitments
are terminated at a time when any Swing Line Loans are outstanding, each
Lender shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans in an amount equal to
its Pro Rata Share (calculated, in the case of the foregoing clause (b),
immediately prior to such termination of the Revolving Loan Commitments) of
the unpaid amount of such Swing Line Loans together with accrued interest
thereon. Upon one Business Day's notice from Swing Line Lender, each
Lender shall deliver to Swing Line Lender an amount equal to its respective
participation in same day funds at the Funding and Payment Office. In
order to further evidence such participation (and without prejudice to the
effectiveness of the participation provisions set forth above), each Lender
agrees to enter into a separate participation agreement at the request of
Swing Line Lender in form and substance reasonably satisfactory to Swing
Line Lender. In the event any Lender fails to make available to Swing Line
Lender the amount of such Lender's participation as provided in this
paragraph, Swing Line Lender shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of errors among
banks for three Business Days and thereafter at the Base Rate. In the event
Swing Line Lender receives a payment of any amount in which other Lenders
have purchased participations as provided in this paragraph, Swing Line
Lender shall promptly distribute to each such other Lender its Pro Rata
Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and
each Lender's obligation to purchase a participation in any unpaid Swing
Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender, Company or any other
Person for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse change in
the business, operations, properties, assets, condition
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(financial or otherwise) or prospects of Holdings or any of its
Subsidiaries; (d) any breach of this Agreement or any other Loan Document
by any party thereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that
--------
such obligations of each Lender are subject to the condition that (X) Swing
Line Lender believed in good faith that all conditions under Section 4 to
the making of the applicable Refunded Swing Line Loans or other unpaid
Swing Line Loans, as the case may be, were satisfied at the time such
Refunded Swing Line Loans or unpaid Swing Line Loans were made or (Y) the
satisfaction of any such condition not satisfied had been waived in
accordance with subsection 10.6 prior to or at the time such Refunded Swing
Line Loans or other unpaid Swing Line Loans were made.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date (other
than Revolving Loans made pursuant to a request by Swing Line Lender pursuant to
subsection 2.1A(ii) for the purpose of repaying any Refunded Swing Line Loans or
Revolving Loans made pursuant to subsection 3.3B for the purpose of reimbursing
any Issuing Lender for the amount of a drawing under a Letter of Credit issued
by it) shall be in an aggregate minimum amount of $500,000 and integral
multiples of $100,000 in excess of that amount; provided that Revolving Loans
--------
made on any Funding Date as Eurodollar Rate Loans with a particular Interest
Period shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $50,000 in excess of that amount. Swing Line Loans made on any
Funding Date shall be in an aggregate minimum amount of $100,000 and integral
multiples of $100,000 in excess of that amount. Whenever Company desires that
Lenders make Revolving Loans it shall deliver to Administrative Agent a Notice
of Borrowing no later than 12:00 Noon (New York City time) at least three
Business Days in advance of the proposed Funding Date (in the case of a
Eurodollar Rate Loan) or at least one Business Day in advance of the proposed
Funding Date (in the case of a Base Rate Loan). Whenever Company desires that
Swing Line Lender make a Swing Line Loan, it shall deliver to Administrative
Agent a Notice of Borrowing no later than 12:00 Noon (New York City time) on the
proposed Funding Date. The Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount and type of Loans
requested, (iii) in the case of Swing Line Loans, that such Loans shall be Base
Rate Loans, (iv) in the case of any Revolving Loans, whether such Loans shall be
Base Rate Loans or Eurodollar Rate Loans, (v) in the case of any Loans requested
to be made as Eurodollar Rate Loans, the initial Interest Period requested
therefor and, (vi) that, after giving effect to the Loans requested thereby, the
Total Utilization of Revolving Loan Commitments will not exceed the lesser of
(y) the Revolving Loan Commitments then in effect and (z) the Adjusted Borrowing
Base Amount then in effect. Revolving Loans may be continued as or converted
into Base Rate Loans and Eurodollar Rate Loans in the manner provided in
subsection 2.2D. In lieu of delivering the above-described Notice of Borrowing,
Company may give Administrative Agent telephonic notice by the required time of
any proposed borrowing under this subsection 2.1B; provided that such notice
--------
shall be promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of
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Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being under stood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative Agent of a Notice
of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender or Swing Line Lender, as the case
may be, of the proposed borrowing. Each Lender shall make the amount of its
Loan available to Administrative Agent not later than 1:00 P.M. (New York City
time) on the applicable Funding Date, and Swing Line Lender shall make the
amount of its Swing Line Loan available to Administrative Agent not later than
2:00 P.M. (New York City time) on the applicable Funding Date, in each case in
same day funds in Dollars, at the Funding and Payment Office. Except as
provided in subsection 2.1A(ii) or subsection 3.3B with respect to Revolving
Loans used to repay Refunded Swing Line Loans or to reimburse any Issuing Lender
for the amount of a drawing under a Letter of Credit issued by it, upon
satisfaction or waiver of the conditions precedent specified in subsections 4.1
(in the case of Loans made on the Closing Date) and 4.2 (in the case of all
Loans), Administrative Agent shall make the proceeds of such Loans available to
Company on the applicable Funding Date by causing an amount of same day funds in
Dollars equal to the proceeds of all such Loans received by Administrative Agent
from Lenders or Swing Line Lender, as the case may be, to be credited to the
account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative
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Agent, at the customary rate set by Administrative Agent for the correction of
errors among banks for three Business Days and thereafter at the Base Rate. If
such Lender does not pay such corresponding amount forthwith upon Administrative
Agent's demand therefor, Administrative Agent shall promptly notify Company and
Company shall [immediately [FLEET ISSUE]] pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from time
to time (the "REGISTER"). The Register shall be available for inspection by
Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Revolving
Loan Commitment and the Revolving Loans from time to time of each Lender,
the Swing Line Loan Commitment and the Swing Line Loans from time to time
of Swing Line Lender, and each repayment or prepayment in respect of the
principal amount of the Revolving Loans of each Lender or the Swing Line
Loans of Swing Line Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided that
--------
failure to make any such recordation, or any error in such recordation,
shall not affect any Lender's Commitments or Company's Obligations in
respect of any applicable Loans.
(iii) Each Lender shall record on its internal records (including the
Notes held by such Lender) the amount of each Revolving Loan made by it and
each payment in respect thereof. Any such recordation shall be conclusive
and binding on Company, absent manifest error; provided that failure to
--------
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of any
applicable Loans; and provided, further that in the event of any
-------- -------
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern and be conclusive and binding on
such Lender, absent manifest error.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such
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authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) Company hereby designates Fleet to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent Fleet serves
in such capacity, Fleet and its officers, directors, employees, agents and
affiliates shall constitute Indemnitees for all purposes under subsection
10.3.
E. OPTIONAL NOTES. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date or at any time thereafter, Company shall execute and deliver
to such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to subsection 10.1) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company's receipt of such notice) a promissory note or promissory notes to
evidence such Lender's Revolving Loans or Swing Line Loans, substantially in the
form of Exhibit IV or Exhibit V annexed hereto, respectively, with appropriate
---------- ---------
insertions.
2.2 INTEREST ON THE LOANS.
---------------------
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Revolving Loan shall bear interest on the unpaid principal amount
thereof from the date made through but excluding the date of maturity (whether
by acceleration or otherwise) at a rate determined by reference to the Base Rate
or the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7,
each Swing Line Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Base Rate. The applicable basis for
determining the rate of interest with respect to any Revolving Loan shall be
selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B. The basis for determining the
interest rate with respect to any Revolving Loan may be changed from time to
time pursuant to subsection 2.2D. If on any day a Revolving Loan is outstanding
with respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Revolving Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
----
the Applicable Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
----
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(ii) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Base Rate
plus the Applicable Base Rate Margin.
----
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, a one-, two-, three- or six-month period or, if
deposits in the interbank Eurodollar market are generally available for such
period (as determined by each Lender making, converting to or continuing such
Eurodollar Rate Loan), a one-week, two-week or twelve-month period; provided
--------
that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
of Conversion/Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
--------
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Revolving
Loans shall extend beyond the Revolving Loan Commitment Termination Date;
(vi) Company shall not select an Interest Period of longer than one
week prior to the end of the Initial Period;
(vii) there shall be no more than twelve (12) Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
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C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to but excluding each
Interest Payment Date applicable to that Loan, upon any prepayment of that Loan
(to the extent accrued on the amount being prepaid) and at maturity (including
final maturity); provided that in the event any Swing Line Loans or any
--------
Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection
2.4A, interest accrued on such Swing Line Loans or Revolving Loans through the
date of such prepayment shall be payable on the next succeeding Interest Payment
Date applicable to Base Rate Loans (or, if earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Revolving Loans equal to $500,000 and integral multiples of
$100,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that Loans
-------- -------
may not be continued as or converted to Eurodollar Rate Loans with an Interest
Period longer than one month prior to the end of the Initial Period.
Company shall deliver a Notice of Conversion/Continuation at any time after
the Closing Date to Administrative Agent no later than 12:00 Noon (New York City
time) at least one Business Day in advance of the proposed conversion date (in
the case of a conversion to a Base Rate Loan) and at least three Business Days
in advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). A Notice of
Conversion/ Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation,
(iv) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, the requested Interest Period, and (v) in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan, that no Potential Event of Default or
Event of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, Company may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/ continuation under this subsection 2.2D; provided that such notice
--------
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
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Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/ Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. POST-MATURITY INTEREST. Any principal payments on the Loans not paid
when due and, to the extent permitted by applicable law, any interest payments
on the Loans or any fees arising pursuant to subsection 2.3 owed hereunder not
paid when due, in each case whether at stated maturity, by notice of prepayment,
by acceleration or otherwise, shall, if Requisite Lenders so elect in writing,
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate which is 2% per annum in excess of the interest rate otherwise payable
at maturity under this Agreement with respect to the applicable Loans (or, in
the case of any such fees at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Base Rate Loans);
provided that, in the case of overdue Eurodollar Rate Loans, upon the expiration
- --------
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
--------
day on which it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
----
A. COMMITMENT FEES. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the Total Utilization of
Revolving Loan Commitments multiplied by the Applicable Commitment Fee
-------------
Percentage, such commitment fees to be calculated on the basis of a 360-day year
and the actual number of days elapsed and to be payable quarterly in arrears on
March 15, June 15, September 15
49
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and December 15 of each year, commencing on the first such date to occur after
the Closing Date, and on the Revolving Loan Commitment Termination Date.
B. OTHER FEES. Company agrees to pay to Agents such fees in the amounts
and at the times separately agreed upon between Company, Syndication Agent and
Administrative Agent.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
---------------------------------------------------------------------
GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
-----------------------------------------------------------------
COLLATERAL AND PAYMENTS UNDER GUARANTIES.
----------------------------------------
A. PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon written or telephonic
---------------------
notice to Administrative Agent on or prior to 12:00 Noon (New York City
time) on the date of prepayment, which notice, if telephonic, shall be
promptly confirmed in writing, at any time and from time to time prepay any
Swing Line Loan on any Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of
that amount. Company may, upon written or telephonic notice on the date of
prepayment, in the case of Base Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate Loans, in each
case given to Administrative Agent by 12:00 Noon (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing
to Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or telephone
to each Lender), at any time and from time to time prepay any Revolving
Loans on any Business Day in whole or in part in an aggregate minimum
amount of $500,000 and integral multiples of $100,000 in excess of that
amount. Notice of prepayment having been given as aforesaid, the principal
amount of the Loans specified in such notice shall become due and payable
on the prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company may,
--------------------------------------------------
upon not less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction after giving effect to any concurrent repayment of Loans and
Letter of Credit; provided that any such partial reduction of the Revolving
--------
Loan Commitments shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount. Company's
notice to Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
50
<PAGE>
(iii) Mandatory Prepayments. The Loans shall be prepaid in the
---------------------
amounts and under the circumstances set forth below, all such prepayments
to be applied as set forth below or as more specifically provided in
subsection 2.4A(iv).
(a) Prepayments From Net Asset Sale Proceeds. No later than the
----------------------------------------
fifth Business Day following the date of receipt by Company or any of
its Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale, Company shall prepay the Loans in an aggregate amount
equal to such Net Asset Sale Proceeds. Notwithstanding the foregoing,
the Net Asset Sale Proceeds shall not be required to repay Loans as
set forth above, to the extent that and so long as such Net Asset Sale
Proceeds are (or a contract is entered into to), within 365 days of
receipt of such proceeds, reinvested in the business of the Company
and its Subsidiaries.
(b) Prepayments from Net Insurance/Condemnation Proceeds. No
----------------------------------------------------
later than the tenth Business Day following the date of receipt by
Administrative Agent or by Company or any of its Subsidiaries of any
Net Insurance/Condemnation Proceeds that are required to be applied to
prepay the Loans pursuant to the provisions of subsection 6.4C,
Company shall prepay the Loans in an aggregate amount equal to the
amount of such Net Insurance/Condemnation Proceeds minus (if (1) no
-----
Event of Default shall have occurred and be continuing and (2) Company
shall have delivered to Administrative Agent, on or before such tenth
Business Day, the Officers' Certificate described in subsection
6.4C(ii)), any Proposed Insurance Reinvestment Proceeds; provided,
--------
however, that at Company's option, such Proposed Insurance
-------
Reinvestment Proceeds may be applied to prepay outstanding Revolving
Loans to the full extent thereof. In addition, no later than 365 days
after receipt of any Proposed Insurance Reinvestment Proceeds, Company
shall prepay the Loans in an amount equal to the amount of any such
Proposed Insurance Reinvestment Proceeds that have not theretofore
been applied to the costs of repairing, restoring or replacing the
applicable assets of Company or its Subsidiaries or reinvested in
assets used in the ordinary course of business; provided that Company
--------
shall not be required to make any prepayment of the Loans to the
extent that the sum of Net Asset Sale Proceeds plus Net
----
Insurance/Condemnation Proceeds from the Closing Date through the date
of determination does not exceed 2% of total assets of Company.
(c) Prepayments Due to Issuance of Debt. On the date of receipt
-----------------------------------
by Holdings, Company or any of their respective Subsidiaries of the
Cash proceeds of any Indebtedness, including debt Securities of
Holdings, Company or any of their respective Subsidiaries (other than
the Loans and any other Indebtedness permitted under subsections 7.1
(such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being the "NET INDEBTEDNESS
PROCEEDS")), Company shall prepay the Loans in an aggregate amount
equal to such Net Indebtedness Proceeds; provided, however, that
-------- -------
payment or acceptance of the amounts provided for in this subsection
2.4A(iii)(c) shall not constitute a waiver of any Event of Default
resulting from the incurrence of such Indebtedness or otherwise
51
<PAGE>
prejudice any rights or remedies of Agents or Lenders. If Company is
otherwise required to apply any portion of Net Indebtedness Proceeds
to prepay Indebtedness evidenced by the Term Loans or the Senior
Notes, then notwithstanding anything contained in this Agreement to
the contrary Company shall apply such Net Indebtedness Proceeds to the
prepayment of the Loans so as to eliminate or minimize any obligation
to prepay the Term Loans or the Senior Notes.
(d) Prepayments Due to Issuance of Equity Securities. On the
------------------------------------------------
date of receipt by Holdings or Company of Cash proceeds (any such
proceeds, net of under writing discounts and commissions and other
reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "NET EQUITY PROCEEDS") from
the issuance of any equity Securities of Holdings or Company after the
Closing Date (other than (A) capital contributions by Holdings to
Company or any other Subsidiary, (B) issuances of Securities to the
General Partner or Holdings by the Company, or (C) issuances of
Holdings Common Units, Preferred Units or Qualified Preferred Units
(x) to employees, officers, directors and consultants of Holdings and
its Subsidiaries in the ordinary course of business in connection with
their employment by Holdings, Company or its Subsidiaries and (y) to
Bain Investors, their Related Parties or the Existing Investors to the
extent the Cash proceeds thereof are not in excess of $25,000,000 and
(z) as payment of all or any portion of the purchase price of a
business or assets in a Permitted Acquisition), Company shall prepay
the Loans in an aggregate amount equal to: (i) 50% (or, if the
Leverage Ratio is not more than 3.5 to 1.0 on the date such Net Equity
Proceeds are received, no such payment shall be made) of such Net
Equity Proceeds if such Net Equity Proceeds are derived from a non-
public sale of equity Securities or partnership interests of Holdings
or Company or (ii) 75% (or, if the Leverage Ratio is not more than 3.5
to 1.0 on the date such Net Equity Proceeds are received, no such
payment shall be made) of such Net Equity Proceeds if such Net Equity
Proceeds are derived from the sale of equity Securities or partnership
interests of Holdings or Company through a public offering. If
Company is otherwise required to apply any portion of Net Equity
Proceeds to prepay Indebtedness evidenced by the Term Loans or the
Senior Notes, then notwithstanding anything contained in this
Agreement to the contrary, Company shall apply such Net Equity
Proceeds to the prepayment of the Revolving Loans so as to eliminate
or minimize any obligation to prepay the Term Loans or the Senior
Notes.
(e) Calculations of Net Proceeds Amounts; Additional Prepayments
------------------------------------------------------------
and Reductions Based on Subsequent Calculations. Concurrently with any
-----------------------------------------------
prepayment of the Loans pursuant to subsections 2.4A(iii)(a)-(d),
Company shall deliver to Administrative Agent an Officers' Certificate
demonstrating the calculation of the amount (the "NET PROCEEDS
AMOUNT") of the applicable Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds, Net Indebtedness Proceeds or Net
Equity Proceeds (as such terms are defined in subsections
2.4A(iii)(a), (b), (c) and (d), respectively), as the case may be,
that gave rise to such prepayment. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was greater
than the amount set forth in such Officers' Certificate, Company shall
52
<PAGE>
promptly make an additional prepayment of the Loans in an amount equal
to the amount of such excess, and Company shall concurrently therewith
deliver to Administrative Agent an Officers' Certificate demonstrating
the derivation of the additional Net Proceeds Amount resulting in such
excess.
(f) Prepayments Relating to the Borrowing Base. Company shall
------------------------------------------
from time to time prior to the Revolving Loan Commitment Termination
Date, prepay Revolving Loans and Swing Line Loans (and after all Loans
have been repaid, deposit in a collateral account same day funds in an
amount equal to the Letter of Credit Usage until such time as the
Letters of Credit shall have been terminated and the Letter of Credit
Usage has been reduced to zero or until no payment is otherwise
required under this clause (f)) in such amounts as shall be necessary
so that at all times the Total Utilization of Revolving Loan
Commitments shall not exceed the Adjusted Borrowing Base Amount then
in effect.
(g) Prepayments Due to Restrictions of Revolving Loan
-------------------------------------------------
Commitments. Company shall from time to time prepay first the Swing
------------ -----
Line Loans and second the Revolving Loans to the extent necessary so
------
that the Total Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
--------------------------
(a) Application of Voluntary Prepayments by Type of Loans and
---------------------------------------------------------
Order of Maturity. Any voluntary prepayments pursuant to subsection
-----------------
2.4A(i) shall be applied as specified by Company in the applicable
notice of prepayment; provided that in the event Company fails to
--------
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding Swing Line
-----
Loans to the full extent thereof and second to repay outstanding
------
Revolving Loans to the full extent thereof.
(b) Application of Mandatory Prepayments by Type of Loans. Any
-----------------------------------------------------
amount (the "APPLIED AMOUNT") required to be applied as a mandatory
prepayment of the Loans pursuant to subsections 2.4A(iii)(a)-(d) shall
be applied first to prepay the Swing Line Loans to the full extent
-----
thereof and second to the extent of any remaining portion of the
------
Applied Amount, to prepay the Revolving Loans to the full extent
thereof.
(c) Application of Prepayments to Base Rate Loans and Eurodollar
------------------------------------------------------------
Rate Loans. Any prepayment shall be applied first to Base Rate Loans
----------
to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any
payments required to be made by Company pursuant to subsection 2.6D.
53
<PAGE>
B. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
--------------------------
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 1:00 P.M. (New York City time) on the
date due at the Funding and Payment Office for the account of Lenders;
funds received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Company on the next succeeding
Business Day. Company hereby authorizes Administrative Agent to charge its
accounts with Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest, fees and expenses
[FLEET] due hereunder (subject to sufficient funds being available in its
accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
-------------------------------------------------
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
-------------------------
payments in respect of Revolving Loans shall be apportioned among all
outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment fees of such
Lender when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of Conversion/
Continuation is withdrawn as to any Affected Lender or if any Affected
Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Subject to the provisions of
-------------------------
subsection 2.2B whenever any payment to be made hereunder shall be stated
to be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing
-------------------
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
--------
that the failure to make (or any error in the making of) a notation of any
Loan made under
54
<PAGE>
such Note shall not limit or otherwise affect the obligations of Company
hereunder or under such Note with respect to any Loan or any payments of
principal or interest on such Note.
C. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER GUARANTIES.
(i) Application of Proceeds of Collateral. Except as provided in
-------------------------------------
subsections 2.4A(iii)(a) and 2.4A(iii)(b) with respect to prepayments from
Net Asset Sale Proceeds and Net Insurance/Condemnation Proceeds, all
proceeds received by Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral under any Collateral Document during the continuation of an
Event of Default may, in the discretion of Administrative Agent, be held by
Administrative Agent as Collateral for, and/or (then or at any time
thereafter) applied in full or in part by Administrative Agent against,
the applicable Secured Obligations (as defined in such Collateral Document)
in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including all expenses, liabilities
and advances made or incurred by Administrative Agent and its agents
and counsel in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations then due and owing
for the benefit of the holders thereof in accordance with the terms of
Intercreditor Agreement; and
(c) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received
----------------------------------------
by Administrative Agent under either Guaranty shall be applied promptly
from time to time by Administrative Agent in the following order of
priority:
(a) To the payment of the costs and expenses of any collection
or other realization under such the Guaranty, including all expenses,
liabilities and advances made or incurred by Administrative Agent and
its agents and counsel in connection therewith, all in accordance with
the terms of this Agreement and Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in such
Guaranty) for the ratable benefit of the holders thereof; and
55
<PAGE>
(c) thereafter, to the extent of any excess such payments, to
the payment to Holdings or the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
---------------
A. INITIAL REVOLVING LOANS. $125,000,000 in aggregate principal amount
of Revolving Loans made on the Closing Date (the "RECAPITALIZATION REVOLVING
LOANS"), together with the proceeds of the Term Loans made on the Closing Date
under the Term Loan Credit Agreement and the proceeds of the debt and equity
capitalization of Holdings and Company described in subsections 4.1D(i), (iii),
and (iv), shall be applied by Holdings and Company to fund the Recapitalization
Financing Requirements.
B. POST CLOSING DATE REVOLVING LOANS AND SWING LINE LOANS. Revolving
Loans and Swing Line Loans made after the Closing Date may be used by Company
for working capital and general corporate purposes, which may include the making
of intercompany loans to any of Company's wholly-owned Subsidiaries, in
accordance with subsection 7.1, for their own working capital and general
corporate purposes (including Consolidated Capital Expenditure) and financing
Permitted Acquisitions.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Holdings or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such
56
<PAGE>
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/ Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "AFFECTED
LOANS") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, promptly upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain:
57
<PAGE>
(i) if for any reason (other than a default by that Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment or any conversion of
any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Subject to its obligations under
subsection 2.8, any Lender may make, carry or transfer Eurodollar Rate Loans at,
to, or for the account of any of its branch offices or the office of an
Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
- -------- -------
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of an Event of Default, (i) Company may not elect to
have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan
after the expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by Company with respect to a requested
borrowing or conversion/continuation of, or into, Eurodollar Rate Loans that has
not yet occurred shall be deemed to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
----------------------------------------
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after
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the date hereof by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
-----------------------------
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction
from or to which a payment is made by or on behalf of Company or by any
federation or organization of which the United States of America or any
such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such
Tax from any sum paid or
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payable by Company to Administrative Agent or any Lender under any of the
Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Company) for its own account or (if that liability
is imposed on Administrative Agent or such Lender, as the case may be)
on behalf of and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after
the date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(ii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form
1001 or 4224 (or any
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successor forms), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption required
under the Internal Revenue Code or the regulations issued thereunder
to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service Form
1001 or 4224 pursuant to clause (1) above, a Certificate re Non-Bank
Status together with two original copies of Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly executed
by such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under any
of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this subsection 2.7B(iii); provided that if such Lender
--------
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
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C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
-----------------------------------------------------
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
--------
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses
payable by Company pursuant to this subsection 2.8 (setting
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forth in reasonable detail the basis for requesting such amount) submitted by
such Lender or Issuing Lender to Company (with a copy to Administrative Agent)
shall be conclusive absent manifest error.
2.9 DEFAULTING LENDERS.
------------------
Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "DEFAULTING LENDER") defaults (a "FUNDING DEFAULT") in its
obligation to fund any Revolving Loan (a "DEFAULTED REVOLVING LOAN") in
accordance with subsection 2.1, then (i) during any Default Period (as defined
below) with respect to such Defaulting Lender, such Defaulting Lender shall be
deemed not to be a "Lender" for purposes of voting on any matters (including the
granting of any consents or waivers) with respect to any of the Loan Documents,
(ii) to the extent permitted by applicable law, until such time as the Default
Excess (as defined below) with respect to such Defaulting Lender shall have been
reduced to zero, (a) any voluntary prepayment of the Revolving Loans pursuant to
subsection 2.4A(i) shall, if Company so directs at the time of making such
voluntary prepayment, be applied to the Revolving Loans of other Lenders as if
such Defaulting Lender had no Revolving Loans outstanding and the Revolving Loan
Exposure of such Defaulting Lender were zero, and (b) any mandatory prepayment
of the Revolving Loans pursuant to subsection 2.4A(iii) shall, if Company so
directs at the time of making such mandatory prepayment, be applied to the
Revolving Loans of other Lenders (but not to the Revolving Loans of such
Defaulting Lender) as if such Defaulting Lender had funded all Defaulted
Revolving Loans of such Defaulting Lender, it being understood and agreed that
Company shall be entitled to retain any portion of any mandatory prepayment of
the Revolving Loans that is not paid to such Defaulting Lender solely as a
result of the operation of the provisions of this clause (b), (iii) such
Defaulting Lender's Revolving Loan Commitment and outstanding Revolving Loans
and such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage shall
be excluded for purposes of calculating the commitment fee payable to Lenders
pursuant to subsection 2.3A in respect of any day during any Default Period with
respect to such Defaulting Lender, and such Defaulting Lender shall not be
entitled to receive any commitment fee pursuant to subsection 2.3A with respect
to such Defaulting Lender's Revolving Loan Commitment in respect of any Default
Period with respect to such Defaulting Lender, and (iv) the Total Utilization of
Revolving Loan Commitments as at any date of determination shall be calculated
as if such Defaulting Lender had funded all Defaulted Revolving Loans of such
Defaulting Lender.
For purposes of this Agreement, (I) "DEFAULT PERIOD" means, with respect
to any Defaulting Lender, the period commencing on the date of the applicable
Funding Default and ending on the earliest of the following dates: (A) the date
on which all Revolving Loan Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Revolving Loans of such Defaulting Lender or by the non-pro rata
application of any voluntary or mandatory prepayments of the Revolving Loans in
accordance with the terms of this subsection 2.9 or by a combination thereof)
and (2) such Defaulting Lender shall have delivered to Company and
Administrative Agent a written reaffirmation of its intention to honor its
obligations under this Agreement with respect to its Revolving Loan Commitment,
and (C) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing, and (II)
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the excess, if
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any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Revolving Loans) over the aggregate outstanding principal
amount of Revolving Loans of such Defaulting Lender.
No Commitment of any Lender shall be increased or otherwise affected, and,
except as otherwise expressly provided in this subsection 2.9, performance by
Company of its obligations under this Agreement and the other Loan Documents
shall not be excused or otherwise modified, as a result of any Funding Default
or the operation of this subsection 2.9. The rights and remedies against a
Defaulting Lender under this subsection 2.9 are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.
2.1 REMOVAL OR REPLACEMENT OF A LENDER.
----------------------------------
A. Anything contained in this Agreement to the contrary notwithstanding,
in the event that:
(i) (a) any Lender (an "INCREASED-COST LENDER") shall give notice
to Company that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under subsection 2.7 or subsection 3.6, (b)
the circumstances which have caused such Lender to be an Affected Lender or
which entitle such Lender to receive such payments shall remain in effect,
and (c) such Lender shall fail to withdraw such notice within five Business
Days after Company's request for such withdrawal; or
(ii) (a) any Lender shall become a Defaulting Lender, (b) the
Default Period for such Defaulting Lender shall remain in effect, and (c)
such Defaulting Lender shall fail to cure the default as a result of which
it has become a Defaulting Lender within five Business Days after Company's
request that it cure such default; or
(iii) (a) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of
this Agreement as contemplated by clauses (i) through (v) of the first
provision to subsection 10.6A, the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"NON-CONSENTING LENDER") whose consent is required shall not have been
obtained, and (b) the failure to obtain Non-Consenting Lenders' consents
does not result solely from the exercise of Non-Consenting Lenders' rights
(and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the second provision to subsection 10.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "TERMINATED LENDER") to the extent permitted by
subsection 2.10B.
B. Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so:
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(i) elect to (a) terminate the Revolving Loan Commitment, if any, of
such Terminated Lender upon receipt by such Terminated Lender of such
notice and (b) prepay on the date of such termination any outstanding Loans
made by such Terminated Lender, together with accrued and unpaid interest
thereon and any other amounts payable to such Terminated Lender hereunder
pursuant to subsection 2.3, subsection 2.6, subsection 2.7 or subsection
3.6 or otherwise; provided that, in the event such Terminated Lender has
--------
any Loans outstanding at the time of such termination, the written consent
of Administrative Agent and Requisite Lenders (which consent shall not be
unreasonably withheld or delayed) shall be required in order for Company to
make the election set forth in this clause (i); or
(ii) elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Loan Commitment, if any, in full to one or more Eligible
Assignees (each a "REPLACEMENT LENDER") in accordance with the provisions
of subsection 10.1B; provided that (a) on the date of such assignment,
--------
Company shall pay any amounts payable to such Terminated Lender pursuant to
subsection 2.3, subsection 2.6, subsection 2.7 or subsection 3.6 or
otherwise as if it were a prepayment and (b) in the event such Terminated
Lender is a Non-Consenting Lender, each Replacement Lender shall consent,
at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
provided that (X) Company may not make either of the elections set forth in
- --------
clauses (i) or (ii) above with respect to any Non-Consenting Lender unless
Company also makes one of such elections with respect to each other Terminated
Lender which is a Non-Consenting Lender and (Y) Company may not make either of
such elections with respect to any Terminated Lender that is an Issuing Lender
unless, prior to the effectiveness of such election, Company shall have caused
each outstanding Letter of Credit issued by such Issuing Lender to be cancelled.
C. Upon the prepayment of all amounts owing to any Terminated Lender and
the termination of such Terminated Lender's Revolving Loan Commitment, if any,
pursuant to clause (i) of subsection 2.10B, (i) Schedule 2.1 shall be deemed
------------
modified to reflect any corresponding changes in the Revolving Loan Commitments
and (ii) such Terminated Lender shall no longer constitute a "Lender" for
purposes of this Agreement; provided that any rights of such Terminated Lender
--------
to indemnification under this Agreement (including under subsections 2.6D, 2.7,
3.6, 10.2 and 10.3) shall survive as to such Terminated Lender.
SECTION 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
---------------------------------------------------------------------
THEREIN.
- -------
A. LETTERS OF CREDIT. In addition to Company requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(ii) and that Swing Line Lender
make Swing Line Loans pursuant to subsection 2.1A(iii), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders issue Letters of Credit for the
account of
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Company for the purposes specified in the definitions of Commercial Letters of
Credit and Standby Letters of Credit; provided that all such Commercial Letters
--------
of Credit shall provide for sight drawings. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of
Company herein set forth, any one or more Lenders may, but (except as provided
in subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit
in accordance with the provisions of this subsection 3.1; provided that Company
--------
shall not request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $25,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) five Business Days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided that the
--------
immediately preceding clause (b) shall not prevent any Issuing Lender from
agreeing that a Standby Letter of Credit will automatically be extended for
one or more successive periods not to exceed one year each unless such
Issuing Lender elects not to extend for any such additional period; and
provided, further that such Issuing Lender shall elect not to extend such
-------- -------
Standby Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time such Issuing Lender must elect whether or not
to allow such extension; provided, however, that notwithstanding clause (a)
-------- -------
but subject to the other restrictions of this subsection, Company may
request the issuance (on a date prior to five Business Days prior to the
Revolving Loan Commitment Termination Date) of a Standby Letter of Credit
having an expiration date later than five Business Days prior to the
Revolving Loan Commitment Termination Date if Company, at the time of such
request, makes arrangements in form and substance satisfactory to the
Issuing Lender thereof to cash collateralize such Letter of Credit,
provided that Issuing Lender shall be under no obligation to issue such a
--------
Letter of Credit if it shall reasonably determine that such cash
collateralization arrangements could reasonably be expected to be less
favorable to Issuing Lender than the reimbursement arrangements hereunder
with respect to other Letters of Credit;
(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date which is 180
days from the date of issuance (on a date prior to 30 days prior to the
Revolving Loan Commitment Termination Date) of such Commercial Letter of
Credit or (b) that is otherwise unacceptable to the applicable Issuing
Lender in its reasonable discretion; provided, however, that
-------- -------
notwithstanding clause (X) but subject to the other restrictions of this
subsection, Company may request the issuance (on a date prior to 30 days
prior to the Revolving Loan Commitment Termination Date) of a Commercial
Letter of Credit having an expiration date later than the time set forth in
clause (X) if Company, at the time of such request, makes arrangements in
form and
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substance satisfactory to the Issuing Lender thereof to cash collateralize
such Letter of Credit, provided that Issuing Lender shall be under no
--------
obligation to issue such a Letter of Credit if it shall reasonably
determine that such cash collateralization arrangements could reasonably be
expected to be less favorable to Issuing Lender than the reimbursement
arrangements hereunder with respect to other Letters of Credit; or
(v) any Letter of Credit if, after giving effect to the issuance
thereof, the Total Utilization of Revolving Loan Commitments exceeds the
lesser of (y) the Revolving Loan Commitments then in effect and (z) the
Adjusted Borrowing Base Amount then in effect.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the issuance of a
------------------
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 11:00 A.M. (New York City time) at least three
Business Days (in the case of Standby Letters of Credit) or five Business
Days (in the case of Commercial Letters of Credit), or in each case such
shorter period as may be agreed to by the Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The Notice of
Issuance of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) whether the Letter of Credit
is to be a Standby Letter of Credit or a Commercial Letter of Credit, (c)
the face amount of the Letter of Credit, (d) in the case of a Letter of
Credit which Company requests to be denominated in a currency other than
Dollars, the currency in which Company requests such Letter of Credit to be
issued, (e) the expiration date of the Letter of Credit, (f) the name and
address of the beneficiary, and (g) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing Lender, in
--------
its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any such documents; and provided, further that no
-------- -------
Letter of Credit shall require payment against a conforming draft to be
made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such draft
is required to be presented is located) that such draft is presented if
such presentation is made after 10:00 A.M. (in the time zone of such office
of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of Issuance
of Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit Company shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Company is required to certify in
the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
-------------------------------
Agent of a Notice of Issuance of Letter of Credit pursuant to subsection
3.1B(i) requesting the
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issuance of a Letter of Credit, in the event Administrative Agent elects to
issue such Letter of Credit, Administrative Agent shall promptly so notify
Company, and Administrative Agent shall be the Issuing Lender with respect
thereto. In the event that Administrative Agent, in its sole discretion,
elects not to issue such Letter of Credit, Administrative Agent shall
promptly so notify Company, whereupon Company may request any other Lender
to issue such Letter of Credit by delivering to such Lender a copy of the
applicable Notice of Issuance of Letter of Credit. Any Lender so requested
to issue such Letter of Credit shall promptly notify Company and
Administrative Agent whether or not, in its sole discretion, it has elected
to issue such Letter of Credit, and any such Lender which so elects to
issue such Letter of Credit shall be the Issuing Lender with respect
thereto. In the event that all other Lenders shall have declined to issue
such Letter of Credit, notwithstanding the prior election of Administrative
Agent not to issue such Letter of Credit, Administrative Agent shall be
obligated to issue such Letter of Credit and shall be the Issuing Lender
with respect thereto, notwithstanding the fact that the Letter of Credit
Usage with respect to such Letter of Credit and with respect to all other
Letters of Credit issued by Administrative Agent, when aggregated with
Administrative Agent's outstanding Revolving Loans and Swing Line Loans,
may exceed Administrative Agent's Revolving Loan Commitment then in effect;
provided that Administrative Agent shall not be obligated to issue any
--------
Letter of Credit denominated in a foreign currency which in the judgment
of Administrative Agent is not readily and freely available.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
----------------------------
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
-----------------------
Credit the applicable Issuing Lender shall promptly notify Administrative
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after receipt of
such notice (or, if Administrative Agent is the Issuing Lender, together
with such notice), Administrative Agent shall notify each Lender of the
amount of such Lender's respective participation in such Letter of Credit,
determined in accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each
------------------
calendar quarter ending after the Closing Date, so long as any Letter of
Credit shall have been outstanding during such calendar quarter, each
Issuing Lender shall deliver to each other Lender a report setting forth
for such calendar quarter the daily aggregate amount available to be drawn
under the Letters of Credit issued by such Issuing Lender that were
outstanding during such calendar quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT. Immediately
upon the issuance of each Letter of Credit, each Lender having a Revolving Loan
Commitment shall be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Letter of Credit and any
drawings honored thereunder in an amount equal to such Lender's Pro Rata Share
(with respect to the Revolving Loan Commitments) of the maximum amount which
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is or at any time may become available to be drawn thereunder. On the Revolving
Loan Commitment Termination Date, the Issuing Lender shall be deemed to, and
hereby agrees to, irrevocably repurchase from each Lender such Lender's
participation in the Letters of Credit issued by such Issuing Lender pursuant to
the last proviso to subsection 3.1A(iii) or the last proviso to subsection
3.1A(iv) to the extent any such Letter of Credit remains outstanding and any
amounts remain undrawn thereunder.
3.2 LETTER OF CREDIT FEES.
---------------------
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to 1/8 of 1% per annum of the daily amount available to be drawn
under such Standby Letter of Credit and (b) a letter of credit fee, payable
to Administrative Agent for the account of Lenders having Revolving Loan
Exposure, equal to the product of (x) the Applicable Eurodollar Rate Margin
and (y) the daily amount available to be drawn under such Standby Letter of
Credit, each such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) each March 15, June 15, September 15 and
December 15 of each year and computed on the basis of a 360-day year for
the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to 1/8 of 1% per annum of the daily amount available to be drawn
under such Commercial Letter of Credit and (b) a letter of credit fee,
payable to Administrative Agent for the account of Lenders having Revolving
Loan Exposure, equal to the product of (x) the Applicable Eurodollar Rate
Margin and (y) the daily amount available to be drawn under such Commercial
Letter of Credit, each such fronting fee or letter of credit fee to be
payable in arrears on and to (but excluding) each March 15, June 15,
September 15 and December 15 of each year and computed on the basis of a
360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (2) any amount described in such clauses which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) or (ii)(b) of this subsection 3.2, Administrative Agent shall distribute
to each Lender its Pro Rata Share of such amount.
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3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
------------------------------------------------------------------
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF CREDIT. In
the event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars (which amount, in the
case of a drawing under a Letter of Credit which is denominated in a currency
other than Dollars, shall be calculated by reference to the applicable Exchange
Rate) and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
- --------
notwithstanding, (i) unless Company shall have notified Administrative Agent and
such Issuing Lender prior to 11:00 A.M. (New York City time) on the date such
drawing is honored that Company intends to reimburse such Issuing Lender for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Revolving Loans that are Base
Rate Loans on the Reimbursement Date in an amount in Dollars (which amount, in
the case of a drawing under a Letter of Credit which is denominated in a
currency other than Dollars, shall be calculated by reference to the applicable
Exchange Rate) equal to the amount of such honored drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2B, Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such honored drawing, the proceeds of which shall be applied
directly by Administrative Agent to reimburse such Issuing Lender for the amount
of such honored drawing; and provided, further that if for any reason proceeds
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of Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, Company shall
reimburse such Issuing Lender, on demand, in an amount in same day funds equal
to the excess of the amount of such honored drawing over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS OF
CREDIT.
(i) Payment by Lenders. In the event that Company shall fail for any
------------------
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount (calculated, in the case of a drawing under a Letter of Credit
denominated in a currency other than Dollars, by reference to the
applicable Exchange Rate) equal to the amount of any drawing honored by
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the unreimbursed amount
of such honored drawing and of such other Lender's respective participation
therein based on such Lender's Pro Rata Share
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of the Revolving Loan Commitments. Each Lender shall make available to such
Issuing Lender an amount equal to its respective participation, in Dollars
and in same day funds, at the office of such Issuing Lender specified in
such notice, not later than 12:00 Noon (New York City time) on the first
business day (under the laws of the jurisdiction in which such office of
such Issuing Lender is located) after the date notified by such Issuing
Lender. In the event that any Lender fails to make available to such
Issuing Lender on such business day the amount of such Lender's
participation in such Letter of Credit as provided in this subsection 3.3C,
such Issuing Lender shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the rate customarily used by
such Issuing Lender for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. Nothing in this subsection
3.3C shall be deemed to prejudice the right of any Lender to recover from
any Issuing Lender any amounts made available by such Lender to such
Issuing Lender pursuant to this subsection 3.3C in the event that it is
determined by the final judgment of a court of competent jurisdiction that
the payment with respect to a Letter of Credit by such Issuing Lender in
respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
---------------------------------------------------------------
In the event any Issuing Lender shall have been reimbursed by other Lenders
pursuant to sub section 3.3C(i) for all or any portion of any drawing
honored by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such honored
drawing such other Lender's Pro Rata Share of all payments subsequently
received by such Issuing Lender from Company in reimbursement of such
honored drawing when such payments are received. Any such distribution
shall be made to a Lender at its primary address set forth below its name
on the appropriate signature page hereof or at such other address as such
Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay to each
------------------------------
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the Base Rate
plus the Applicable Base Rate Margin for Revolving Loans and (b)
----
thereafter, if Requisite Lenders so elect in writing pursuant to the
provision of subsection 2.2E of this Agreement, a rate which is 2% per
annum in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this sub section 3.3D(i) shall be computed on
the basis of a 365-day or 366-day year, as the case may be, for the actual
number of days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which the
related drawing under a Letter of Credit is reimbursed in full.
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(ii) Distribution of Interest Payments by Issuing Lender. Promptly
---------------------------------------------------
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in respect of
the period from the date such drawing is honored to but excluding the date
on which such Issuing Lender is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B), the amount that such other Lender would have
been entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such Letter
of Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other Lenders pursuant to sub section 3.3C(i) for all or any
portion of such honored drawing, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under sub
section 3.3C(i) with respect to such honored drawing such other Lender's
Pro Rata Share of any interest received by such Issuing Lender in respect
of that portion of such honored drawing so reimbursed by other Lenders for
the period from the date on which such Issuing Lender was so reimbursed by
other Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by Company. Any such distribution shall be
made to a Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such Lender
may request.
3.4 OBLIGATIONS ABSOLUTE.
--------------------
The obligation of Company to reimburse each Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to subsection 3.3B and the obligations of Lenders
under subsection 3.3C(i) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Holdings or one
of its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any 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;
(iv) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings or any
of its Subsidiaries;
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(v) any breach of this Agreement or any other Loan Document by any
party thereto;
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(vii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
- --------
applicable Letter of Credit shall not have constituted bad faith, gross
negligence or willful misconduct of such Issuing Lender under the circumstances
in question (as determined by a final judgment of a court of competent
jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
--------------------------------------------------
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the bad faith, gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto government or governmental authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) so long as such Issuing Lender
complies with its responsibilities under subsection 3.3A, failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
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misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising out of the bad faith, gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be controlling
with respect to the matters covered thereby), in the event that any Issuing
Lender or Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that any
law, treaty or governmental rule, regulation or order, or any change therein or
in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by any Issuing Lender or
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of such Issuing Lender or Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being imposed
on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Lender for which such Issuing Lender is not
otherwise compensated hereunder; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
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and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 CONDITIONS TO INITIAL LOANS.
---------------------------
The obligations of Lenders to make the Revolving Loans to be made on the
Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company shall,
and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Company or such Loan Party, as the case may be, each, unless otherwise noted,
dated the Closing Date:
(i) Certified copies of the Agreement of Limited Partnership or
Certificate or Articles of Incorporation of such Person, together with a
good standing certificate from the Secretary of State of its jurisdiction
of formation or incorporation and each other state in which such Person is
qualified as a foreign Person to do business (except, with respect to Loan
Parties, other than Company, any such other state or states in which
failure to be qualified could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (provided that no
--------
such state shall be a state in which real property of the applicable Loan
Party is located)) and, to the extent generally available, a certificate or
other evidence of good standing or existence as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority
of each of such jurisdictions, each dated a recent date prior to the
Closing Date;
(ii) Copies of the Bylaws of each such Person that is a corporation,
certified as of the Closing Date by such Person's corporate secretary or an
assistant secretary;
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(iii) Resolutions of the Board of Directors, general partner or other
authorizing body of such Person approving and authorizing the execution,
delivery and performance of the Loan Documents and Related Agreements to
which it is a party, certified as of the Closing Date by the secretary or
an assistant secretary or general partner of such Person as being in full
force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such Person is
a party; and
(vi) Such other documents as any Agent may reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since March 31, 1998, no Material Adverse
Effect (in the opinion of any Agent) shall have occurred.
C. CORPORATE AND CAPITAL STRUCTURE, OWNERSHIP, MANAGEMENT, ETC.
(i) Corporate Structure. The organizational structure of Holdings
-------------------
and its Subsidiaries, after giving effect to the Recapitalization
Transactions, shall be as set forth on Schedule 4.1C annexed hereto.
-------------
(ii) Capital Structure and Ownership. The capital structure and
-------------------------------
ownership of Holdings and its Subsidiaries, after giving effect to the
Recapitalization Transactions, shall be reasonably satisfactory to the
Agents in all respects and as set forth on Schedule 4.1C annexed hereto.
-------------
(iii) Employment Agreement. The Agents shall have received a duly
--------------------
executed copy of, and shall be reasonably satisfied with the form and
substance of, the Employment Agreement.
D. PROCEEDS OF DEBT AND EQUITY CAPITALIZATION OF HOLDINGS AND COMPANY.
(i) Equity Capitalization. On or before the Closing Date, Bain
---------------------
Investors, their Related Parties, the Existing Investors and the Other
Investors shall have made the Equity Contribution.
(ii) Term Loans. On the Closing Date, Company shall have borrowed
----------
$50,000,000 in aggregate principal amount of Term Loans under the Term Loan
Credit Agreement.
(iii) Senior Notes. On or before the Closing Date, Company and
------------
Anthony Crane Capital Corporation shall have issued and sold for Cash not
less than $155,000,000 in aggregate principal amount of Senior Notes.
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(iv) Senior Discount Debentures. On or before the Closing Date,
--------------------------
Holdings and Anthony Crane Holdings Capital Corporation shall have issued
and sold for Cash the Senior Discount Debentures providing gross Cash
proceeds to Holdings and Anthony Crane Holdings Capital Corporation of not
less than $25,000,000.
(v) Preferred Units. On or before the Closing Date, Holdings shall
---------------
have issued Preferred Units having a liquidation value of $22,500,000 in
connection with the Recapitalization Transactions.
(vi) Use of Proceeds. Company shall have provided evidence
---------------
reasonably satisfactory to Agents that the proceeds of the debt and equity
capitalization of Holdings and Company described in the immediately
preceding clauses (i), (ii), (iii), (iv) and (v) have been irrevocably
committed, prior to the application of the proceeds of the Recapitalization
Revolving Loans, to the payment of a portion of the Recapitalization
Financing Requirements.
E. RELATED AGREEMENTS; TERM LOAN CREDIT DOCUMENTS.
(i) The Bain Advisory Services Agreement and the Related Agreements
shall each be reasonably satisfactory in form and substance to Agents.
(ii) Agents shall each have received a fully executed or conformed
copy of the Bain Advisory Services Agreement, and each Related Agreement
and any documents executed in connection therewith, and the Bain Advisory
Services Agreement, and each Related Agreement shall be in full force and
effect and no provision thereof related to payments thereunder shall have
been modified or waived in any respect determined by any of the Agents to
be material, in each case without the consent of Agents.
(iii) Agents shall each have received a fully executed or conformed
copy of the Term Loan Credit Documents, including the Term Loan Credit
Agreement (and all exhibits and schedules thereto), any promissory notes
evidencing the Term Loans and the Intercreditor Agreement, each of which
shall be in form and substance reasonably satisfactory to Agents, and each
such agreement and promissory note shall be in full force and effect.
F. MATTERS RELATING TO EXISTING INDEBTEDNESS OF HOLDINGS AND ITS
SUBSIDIARIES.
(i) Termination of Existing Credit Agreement and Related Liens;
-----------------------------------------------------------
Existing Letters of Credit. On the Closing Date, Company and its
--------------------------
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreement, (b) terminated any commitments to lend
or make other extensions of credit thereunder, (c) delivered to Agents all
documents or instruments necessary to release any Liens securing
Indebtedness or other obligations of Holdings and its Subsidiaries
thereunder, and (d) made arrangements reasonably satisfactory to Agents
with respect to the cancellation or credit support of any letters of credit
outstanding thereunder or the issuance of Letters of Credit to support the
obligations of Holdings and its Subsidiaries with respect thereto.
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(ii) No Existing Indebtedness to Remain Outstanding. Agents shall
----------------------------------------------
have received an Officers' Certificate of Company stating that, after
giving effect to the transactions described in this subsection 4.1F, the
Loan Parties shall have no Indebtedness outstanding to Persons other than
the Loan Parties, other than Indebtedness under the Loan Documents, the
Term Loans, the Senior Discount Debentures, the Senior Notes and
Indebtedness set forth on Schedule 7.1 annexed hereto.
------------
G. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Holdings and Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary in connection with the Recapitalization Transactions, and the other
transactions contemplated by the Loan Documents and the Related Agreements, and
the continued operation of the business conducted by Holdings and its
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Recapitalization Transactions, and each of the foregoing
shall be in full force and effect, in each case other than those the failure to
obtain or maintain which, either individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. All applicable
waiting periods shall have expired without any action being taken or threatened
by any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the Recapitalization Transactions or the financing
thereof. No action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.
H. CONSUMMATION OF RECAPITALIZATION TRANSACTIONS.
(i) All conditions to the Recapitalization Transactions shall have
been satisfied pursuant to documentation, including, without limitation,
the Recapitalization Agreement, reasonably satisfactory to Agents or the
fulfillment of such conditions shall have been waived with the consent of
Agents, such consent not to be unreasonably withheld;
(ii) The aggregate Cash consideration paid to the holders of equity
interests in Company in respect of such equity interests in connection with
the Recapitalization Transaction shall not exceed $130,100,000 (subject to
adjustment as set forth in the Recapitalization Agreement);
(iii) Transaction Costs shall not exceed $27,000,000; and
(iv) Agents shall have received an Officers' Certificate of Company
and Holdings to the effect set forth in clauses (i)-(iii) above and stating
that Company and Holdings will proceed to consummate the Recapitalization
Transactions immediately upon the making of the initial Loans.
I. CLOSING DATE MORTGAGES; CLOSING DATE MORTGAGE POLICIES; ETC. Agents
shall have received from Holdings, Company and each applicable Subsidiary
Guarantor:
(i) Closing Date Mortgages. Fully executed and notarized Mortgages
----------------------
(each a "CLOSING DATE MORTGAGE" and, collectively, the "CLOSING DATE
MORTGAGES"), in proper
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form for recording in all appropriate places in all applicable
jurisdictions, encumbering each Real Property Asset listed in Schedule 4.II
-------------
annexed hereto (each a "CLOSING DATE MORTGAGED PROPERTY" and, collectively,
the "CLOSING DATE MORTGAGED PROPERTIES") together with an assignment of
rents and leases with respect to each of the Closing Date Mortgaged
Properties;
(ii) Opinions of Local Counsel. An opinion of counsel (which counsel
-------------------------
shall be reasonably satisfactory to Agents) in West Virginia with respect
to the enforceability of the form(s) of Closing Date Mortgages to be
recorded in such state and such other matters as any Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Agents; provided, however, that Agents may determine in their reasonable
-------- -------
discretion that an opinion of counsel in any one or more of such states
shall not be required hereunder;
(iii) Title Insurance. (a) ALTA mortgagee title insurance policies or
---------------
unconditional commitments therefor (the "CLOSING DATE MORTGAGE POLICIES")
issued by the Title Company with respect to the Closing Date Mortgaged
Properties listed in Part A of Schedule 4.II annexed hereto, in amounts not
-------------
less than the respective amounts designated therein with respect to any
particular Closing Date Mortgaged Properties, insuring fee simple title to,
or a valid leasehold interest in, each such Closing Date Mortgaged Property
vested in such Loan Party and assuring Administrative Agent that the
applicable Closing Date Mortgages create valid and enforceable First
Priority mortgage Liens on the respective Closing Date Mortgaged Properties
encumbered thereby, subject to standard survey exceptions, which Closing
Date Mortgage Policies (1) shall include an endorsement for mechanics'
liens, for future advances (in each case, if available) under this
Agreement and for any other matters reasonably requested by any of Agents
and (2) shall provide for affirmative insurance and such reinsurance as
Administrative Agent may reasonably request, all of the foregoing in form
and substance reasonably satisfactory to Agents; and (b) evidence
reasonably satisfactory to Agents that such Loan Party has (i) delivered to
the Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Closing Date Mortgage
Policies and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Closing Date Mortgage Policies and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Closing Date Mortgages in
the appropriate real estate records;
(iv) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Closing Date Mortgage Policies or in the title reports delivered
pursuant to subsection 4.II(iii); and
(v) Matters Relating to Flood Hazard Properties. (a) Evidence,
-------------------------------------------
which may be in the form of a surveyor's note on a survey or a report from
a flood hazard search firm, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the community in which any such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard Properties, such
Loan Party's written acknowledgement of receipt of written notification
from Administrative Agent (1) as to the existence of each such Flood Hazard
Property and (2) as to whether the
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community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and (c) in the event
any such Flood Hazard Property is located in a community that participates
in the National Flood Insurance Program, evidence that Company has obtained
flood insurance in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of Governors of the
Federal Reserve System.
J. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the extent not
otherwise satisfied pursuant to subsection 4.1I, Agents shall have received
evidence satisfactory to it that Holdings, Company and Subsidiary Guarantors
shall have taken or caused to be taken all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the reasonable opinion of Agents,
desirable in order to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
---------------------------------
Agent of accurate and complete schedules to all of the applicable
Collateral Documents.
(ii) Stock Certificates, Instruments and Certificates of Title.
---------------------------------------------------------
Delivery to Administrative Agent of (a) certificates (which certificates
shall be accompanied by irrevocable undated stock powers, duly endorsed in
blank and otherwise satisfactory in form and substance to Administrative
Agent) representing all capital stock pledged pursuant to the Pledge and
Security Agreement, (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Administrative
Agent) evidencing any Collateral and (c) except as otherwise set forth in
the Pledge and Security Agreement, certificates of title, indicating
thereon the Lien created under the Pledge and Security Agreement with
respect to any item of equipment covered by a certificate of title issued
under a statute of any state requiring such indication of such security
interest as a condition of perfection thereof;
(iii) Lien Searches and UCC Termination Statements. Delivery to
--------------------------------------------
Administrative Agent of (a) the results of a recent search, by a Person
reasonably satisfactory to Agents, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which
may have been made with respect to any personal or mixed property of any
Loan Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
--------------------------------------------
Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed
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by each applicable Loan Party with respect to all personal and mixed
property Collateral of such Loan Party, for filing in all jurisdictions as
may be necessary or, in the opinion of Agents, desirable to perfect the
security interests created in such Collateral pursuant to the Collateral
Documents;
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
---------------------
cover sheets or other documents or instruments required to be recorded with
the PTO in order to create or perfect Liens in respect of any U.S. patents,
federally registered trademarks or copyrights, or applications for any of
the foregoing, included among the IP Collateral; and
(vi) Opinions of Local Counsel. Delivery to Agents of an opinion of
-------------------------
counsel under the laws of each jurisdiction for which an opinion is
delivered under subsection 4.1I(ii) and in which any Loan Party or any
personal or mixed property Collateral is located with respect to the
creation and perfection of the security interests in favor of
Administrative Agent in such Collateral and such other matters governed by
the laws of such jurisdiction regarding such security interests as
Syndication Agent and Administrative Agent may reasonably request, in each
case in form and substance reasonably satisfactory to Syndication Agent and
Administrative Agent.
K. ENVIRONMENTAL REPORTS. Agents shall have received an environmental
assessment report in form and substance reasonably satisfactory to Agents
addressing each of the Facilities listed in Schedule 4.1K annexed hereto
-------------
prepared by ENVIRON Corporation (or another firm reasonably satisfactory to
Agents).
L. FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or before the
Closing Date, Lenders shall have received from Company (i) audited consolidated
financial statements of Company and its Subsidiaries for Fiscal Years 1995, 1996
and 1997, consisting of consolidated balance sheets and the related consolidated
statements of income, partners capital and cash flows for such Fiscal Years,
(ii) unaudited consolidated financial statements of Company and its Subsidiaries
for each fiscal month and Fiscal Quarter ended subsequent to the date of the
most recent financial statements delivered pursuant to clause (i), consisting of
consolidated balance sheets and the related consolidated statements of income,
partner's capital, and cash flows for such periods, all in reasonable detail and
certified by the principal financial officer or principal accounting officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments and the
absence of footnotes, and (iii) pro forma consolidated balance sheets of Company
and its Subsidiaries as at the date of the most recent consolidated balance
sheet delivered pursuant to clause (ii), prepared in accordance with GAAP and
reflecting the consummation of the Recapitalization Transactions, the related
financings and the other transactions contemplated by the Loan Documents and the
Related Agreements as if such transactions had occurred on such date, which pro
forma financial statements shall be in form and substance reasonably
satisfactory to Lenders.
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M. FINANCIAL PROJECTIONS. Lenders shall have received financial
projections reasonably satisfactory in form and substance to Agents and Lenders
for Company and its Subsidiaries for the period from the Closing Date through
December 2006.
N. SOLVENCY ASSURANCES. On the Closing Date, Agents and Lenders shall
have received (i) a letter from Murray Devine & Co., dated the Closing Date and
addressed to Agents and Lenders, in form and substance reasonably satisfactory
to Agents and with appropriate attachments, and (ii) a Financial Condition
Certificate dated the Closing Date, substantially in the form of Exhibit XI
----------
annexed hereto (with such changes thereto as shall be approved by Agents in the
exercise of their reasonable discretion) and with appropriate attachments, in
each case demonstrating that, after giving effect to the consummation of the
Recapitalization Transactions, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, Holdings and its
Subsidiaries will be Solvent.
O. EVIDENCE OF INSURANCE. Agents shall have received a certificate from
Company's insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to subsection 6.4 is in full force
and effect and that Administrative Agent on behalf of Lenders has been named as
additional insured and/or loss payee thereunder to the extent required under
subsection 6.4.
P. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Kirkland & Ellis, counsel for Loan Parties, and of
Williams Coulson Johnson Lloyd Parker & Tedesco, LLC, special Pennsylvania
counsel for Loan Parties, in form and substance reasonably satisfactory to
Agents and their counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit VII annexed
-----------
hereto and as to such other matters as or Agents and acting on behalf of Lenders
may reasonably request and (ii) evidence satisfactory to Agents that Loan
Parties have requested such counsel to deliver such opinions to Lenders.
Q. OPINIONS OF AGENT'S COUNSEL. Lenders shall have received originally
executed copies of one or more favorable written opinions of O'Melveny & Myers
LLP, counsel to Agents, dated as of the Closing Date, substantially in the form
of Exhibit VIII annexed hereto and as to such other matters as Agents may
------------
reasonably request.
R. OPINIONS OF COUNSEL DELIVERED UNDER RELATED AGREEMENTS. Agents and
their counsel shall have received copies of each of the opinions of counsel
delivered to the parties under the Related Agreements, together with a letter
from each such counsel (to the extent not inconsistent with such counsel's
established internal policies) authorizing Lenders to rely upon such opinion to
the same extent as though it were addressed to Lenders.
S. FEES AND EXPENSES. Company shall have paid to Agents and
Administrative Agent, for distribution (as appropriate) to Agents, the fees
payable on the Closing Date referred to in subsection 2.3 and all reasonable
expenses for which invoices have been presented on or before the Closing Date.
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T. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Agents an Officers' Certificate, in form and substance
reasonably satisfactory to Agents, to the effect that the representations and
warranties in Section 5 hereof are true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and
as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that Holdings and Company shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by them on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by Agents and
Requisite Lenders.
U. BORROWING BASE CERTIFICATE; APPRAISALS. Company shall have delivered
(a) a Borrowing Base Certificate dated as of the Closing Date demonstrating a
Borrowing Base Amount as of such date of not less than $275,000,000 and (b)
appraisals from independent third-party appraiser in form and substance
reasonably satisfactory to Agents confirming the valuations of assets to be
included in the calculation of the Borrowing Base Amount.
V. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Agents and their
counsel shall be reasonably satisfactory in form and substance to Agents and
such counsel, and Agents and such counsel shall have received all such
counterpart originals or certified copies of such documents as Agents may
reasonably request.
Notwithstanding anything herein to the contrary, it is understood and
agreed that the documents and other items set forth on Schedule 6.11 annexed
-------------
hereto shall be delivered after the Closing Date in accordance with and to the
extent required under subsection 6.11.
Each Lender, by delivering its signature page to this Agreement and funding
its Recapitalization Revolving Loan on the Closing Date, shall be deemed to have
acknowledged receipt of, and consented to and approved, each Loan Document and
each other document required to be approved by Agents, Requisite Lenders or
Lenders, as applicable.
4.2 CONDITIONS TO ALL LOANS.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are subject
to the following further conditions precedent:
A. Administrative Agent shall have received on or before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, chief operating officer, president, the principal financial officer,
the principal accounting officer or the treasurer of Company or by any
authorized employee of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
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B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
(iii) After making the Loans requested on such Funding Date, the
Total Utilization of Revolving Loan Commitments shall not exceed the lesser
of (y) the Revolving Loan Commitments then in effect and (z) the Adjusted
Borrowing Base Amount then in effect;
(iv) The making of the Loans requested on such Funding Date shall
not violate any law including Regulation T, Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System; and
(v) There shall not be pending or, to the knowledge of Holdings or
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries that
has not been disclosed by Holdings or Company in writing pursuant to
subsection 5.6 or 6.1(x) prior to the making of the last preceding Loans
(or, in the case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development not so disclosed
in any such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the reasonable opinion
of Administrative Agent or of Requisite Lenders, would be expected to have
a Material Adverse Effect or be inconsistent with the financial statements,
balance sheets or financial projections delivered in accordance with
subsection 4.1L or 4.1M; and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any action,
suit or proceeding seeking to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
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B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions
of subsection 3.1B(i), an originally executed Notice of Issuance of Letter
of Credit, in each case signed by the chief executive officer, chief
operating officer, president, the principal financial officer, the
principal accounting officer or the treasurer of Company or by any
authorized employee of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative
Agent, together with all other information specified in subsection 3.1B(i)
and such other documents or information as the applicable Issuing Lender
may reasonably require in connection with the issuance of such Letter of
Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lenders to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Holdings and Company represent and
warrant to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
----------------------------------------------------------------
SUBSIDIARIES.
- ------------
A. ORGANIZATION AND POWERS. Each Corporate Loan Party is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and each Partnership Loan Party is a duly
organized and validly existing limited partnership under the laws of its
jurisdiction of formation and is in good standing in such jurisdiction in each
case as of the Closing Date as specified in Schedule 5.1 annexed hereto. Each
------------
Loan Party has all requisite corporate or partnership (as applicable) power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents and
Related Agreements to which it is a party and to carry out the transactions
contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Corporate Loan Party is
qualified to do business and in good standing, and each Partnership Loan Party
is authorized as a foreign partnership to do business, in every jurisdiction
where its assets are located and wherever necessary to carry out its business
and operations, except in jurisdictions where the failure to be so qualified or
in good standing has not had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Holdings and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.13.
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D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of the Closing
Date are identified in Schedule 5.1 annexed hereto. The capital stock or other
------------
equity interests of each of Holdings' Subsidiaries any portion of which is
pledged under the Collateral Documents is duly authorized, validly issued, fully
paid and nonassessable and none of such capital stock or other equity interests
constitutes Margin Stock. The limited and general partnership interests of each
of the Subsidiaries identified in Schedule 5.1 annexed hereto which are limited
------------
partnerships are duly and validly issued. Each of the Subsidiaries of Holdings
is duly organized or formed, validly existing and in good standing under the
laws of its respective jurisdiction of organization or formation, has all
requisite corporate, limited liability company or partnership power and
authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified to do business and
in good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate,
limited liability company or partnership power and authority has not had and
will not have a Material Adverse Effect. Schedule 5.1 annexed hereto (as so
------------
supplemented) correctly sets forth, as of the Closing Date, the ownership
interest of Holdings and each of its Subsidiaries in each of the Subsidiaries of
Holdings identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
--------------------------------
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents and the Related Agreements have been duly authorized by
all necessary corporate, limited liability company and/or partnership (as
applicable) action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan Parties
of the Loan Documents and the Related Agreements to which they are parties and
the consummation of the transactions contemplated by the Loan Documents and such
Related Agreements do not (i) violate any provision of any law or any
governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws (or other
analogous organizational document) of Holdings or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Holdings or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Holdings or any of its Subsidiaries; provided that
--------
with respect to only the Related Agreements, any such conflict or default could
not be reasonably expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Holdings or any of its Subsidiaries (other than any Permitted
Encumbrances or Liens, created under any of the Loan Documents in favor of
Collateral Agent on behalf of Lenders and lenders under the Term Loan Credit
Agreement), or (iv) require any approval of stockholders or partners or any
approval or consent of any Person under any Contractual Obligation of Holdings
or any of its Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to Lenders or
the failure of which to obtain could not reasonably be expected to have a
Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions
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contemplated by the Loan Documents do not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body except to the extent obtained
or made and except for those filings necessary to perfect Liens under the
Collateral Documents, other filings to effect releases of Liens on the Closing
Date and other filings made in the ordinary conduct of business. The execution,
delivery and performance by Loan Parties of the Related Agreements to which they
are parties and the consummation of the transactions contemplated by such
Related Agreements in the manner set forth therein do not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body except (i) to the extent obtained or made or (ii) where the failure to
obtain or make any of the foregoing, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect.
D. BINDING OBLIGATION. Each of the Loan Documents and Related Agreements
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
E. VALID ISSUANCE OF PARTNERSHIP UNITS, SENIOR NOTES AND SENIOR DISCOUNT
DEBENTURES.
(i) Common Units and Preferred Units. The Common Units and
--------------------------------
Preferred Units to be issued on the Closing Date have been duly and validly
issued and fully paid on such date. The issuance and sale of such Common
Units and Preferred Units have either (a) been registered or qualified
under applicable federal and state securities laws or (b) are exempt
therefrom.
(ii) Senior Notes. Company has the power and authority to issue the
------------
Senior Notes. The Senior Notes, when issued and paid for, will be the
legally valid and binding obligations of Company, enforceable against
Company in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability. The Senior Notes, when issued and
sold in the manner contemplated by the Related Agreements on the Closing
Date, will either (a) have been registered or qualified under applicable
federal and state securities laws or (b) be exempt therefrom.
(iii) Senior Discount Debentures. Holdings has the power and
--------------------------
authority to issue the Senior Discount Debentures. The Senior Discount
Debentures, when issued and paid for, will be the legally valid and binding
obligations of Holdings, enforceable against Holdings in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The Senior Discount Debentures, when issued and sold in the
manner contemplated by the Related Agreements
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on the Closing Date, will either (a) have been registered or qualified
under applicable federal and state securities laws or (b) be exempt
therefrom.
5.3 FINANCIAL CONDITION.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries for each of Fiscal Years 1995,
1996 and 1997 and the related consolidated statements of income, partner's
capital, and cash flows of Company and its Subsidiaries for each such Fiscal
Year and (ii) the unaudited consolidated and consolidating balance sheets of
Company and its Subsidiaries for each fiscal month and Fiscal Quarter ended
subsequent to the date of the most recent financial statements referred to in
clause (i) and the related unaudited consolidated statements of income,
partner's capital, and cash flows of Company and its Subsidiaries for each such
period (except for statements of cash flows for each such monthly period). All
such statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments and the absence of footnotes. On the
Closing Date, Holdings and Company do not (and will not following the funding of
the initial Loans) have any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements or the notes thereto
or in the financial projections delivered pursuant to subsection 4.1M and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) of Holdings and any of
its Subsidiaries, taken as a whole.
5.4 NO MATERIAL ADVERSE CHANGE.
--------------------------
Since December 31, 1997 no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
-----------------------------------------
A. TITLE TO PROPERTIES; LIENS. Holdings and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), valid leasehold interests in (in the case of leasehold interests in
real or personal property), valid licenses in (in the case of licensed
intangible properties), or (iv) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the most
recent financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case subject
to Permitted Encumbrances and Liens permitted under subsection 7.2 and except
for assets described on Schedule 5.5A annexed hereto assets disposed of since
the date of such financial statements in the ordinary course of business or as
otherwise permitted under subsection 7.7. Except as otherwise permitted by this
Agreement, all such properties and assets are free and clear of Liens.
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B. REAL PROPERTY. As of the Closing Date, Schedule 5.5 annexed hereto
------------
contains a true, accurate and complete list of (i) all Real Property Assets
owned in fee simple by any Loan Party and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset of any
Loan Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Closing Date, except as specified in Schedule
--------
5.5 annexed hereto, each agreement referenced in clause (ii) of the immediately
- ---
preceding sentence is in full force and effect and Holdings and Company do not
have knowledge of any default that has occurred and is continuing thereunder
(except where the consequences, direct or indirect, of such default or defaults,
if any, would not reasonably be expected to have a Material Adverse Effect), and
each such material agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles.
5.6 LITIGATION; ADVERSE FACTS.
-------------------------
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Holdings or Company, threatened against or
affecting Holdings or any of its Subsidiaries or any property of Holdings or any
of its Subsidiaries and that, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect. Neither Holdings nor any of
its Subsidiaries (i) is in violation of any applicable laws (including
Environmental Laws) that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect, or (ii) is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
----------------
Except to the extent permitted by subsection 6.3, all federal, state and
other material tax returns and reports of Holdings and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes shown on such
tax returns to be due and payable and all assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Holdings and Company know of
no proposed material tax assessment against Holdings or any of its Subsidiaries
which is not being actively contested by Holdings or such Subsidiary in good
faith and by appropriate proceedings; provided that such reserves or other
--------
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
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5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
--------------------------------------------------------
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, compliance with
which could reasonably be expected to result in a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
-----------------------
Neither Holdings nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
---------------------
A. Neither Holdings nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Company only or of Holdings and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
----------------------
A. Holdings and each of its Subsidiaries are in compliance in all
material respects with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each of
the respective Employee Benefit Plans, and have performed all their obligations
under each of the respective Employee Benefit Plans. Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal Revenue Code
is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur which
has or would reasonably be expected to result in a liability to Holdings or any
of its Subsidiaries in excess of $5,000,000.
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C. Except to the extent required under Section 4980B of the Internal
Revenue Code, the aggregate liabilities with respect to health or welfare
benefits (through the purchase of insurance or otherwise) provided or promised
for any retired or former employee of Holdings or any of its Subsidiaries do not
exceed $5,000,000.
D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans, does not exceed
$5,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Holdings,
its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $10,000,000 required to be made to Company or its
Subsidiaries.
5.12 CERTAIN FEES.
------------
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby, and Holdings and
Company hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
------------------------
Except as set forth on Schedule 5.13 annexed hereto:
-------------
(i) Neither Holdings nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, in the case of (a), (b) or (c),
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;
(ii) Neither Holdings nor any of its Subsidiaries has received any
letter or written request for information from any governmental agency
under Section 104 of the Comprehen sive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S) 9604) or any comparable
state law the subject of which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(iii) To Holdings' and Company's knowledge, there are no and have
been no conditions, occurrences, or Hazardous Materials Activities which
could reasonably be expected to form the basis of an Environmental Claim
against Holdings or any of its
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Subsidiaries that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect;
(iv) Holdings and its Subsidiaries maintain an environmental
management system designed to maintain compliance in all material respects
with Environmental Laws and correct any incidents of non-compliance;
(v) Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect; and
(vi) No event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Environmental Law,
any Release of Hazardous Materials, or any Hazardous Materials Activity
which individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
----------------
There is no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
5.15 SOLVENCY.
--------
Each Loan Party is and, upon the incurrence of any Obligations by such Loan
Party on any date on which this representation is made, will be, Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
------------------------------
A. CREATION, PERFECTION AND PRIORITY OF LIENS. Except as otherwise set
forth in the Pledge and Security Agreement, the execution and delivery of the
Collateral Documents by Loan Parties, together with (i) the actions taken on or
prior to the date hereof pursuant to subsections 4.1I, 4.1J, 6.8 and 6.9 and
(ii) the delivery to Administrative Agent of any Pledged Collateral not
delivered to Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements or certificate of title documents delivered to Administrative Agent
for filing or endorsement as the case may be (but not yet filed or endorsed, as
the case may be) and the periodic filing of UCC continuation statements in
respect of UCC financing statements filed by or on behalf of Administrative
Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either
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(i) the pledge or grant by any Loan Party of the Liens purported to be created
in favor of Administrative Agent pursuant to any of the Collateral Documents or
(ii) the exercise by Administrative Agent of any rights or remedies in respect
of any Collateral (whether specifically granted or created pursuant to any of
the Collateral Documents or created or provided for by applicable law), except
for filings or recordings contemplated by subsection 5.16A and except as may be
required, in connection with the disposition of any Pledged Collateral, by laws
generally affecting the offering and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed in
favor of Administrative Agent as contemplated by subsection 5.16A, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office, except with respect to Permitted Encumbrances and Liens
permitted under subsection 7.2A, and (ii) no effective filing covering all or
any part of the IP Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to
Administrative Agent or Administrative Agent by or on behalf of any Loan Party
with respect to any of the Collateral (in each case taken as a whole with
respect to any particular Collateral) is accurate and complete in all material
respects as of the date supplied.
5.17 RELATED AGREEMENTS.
------------------
A. DELIVERY OF RELATED AGREEMENTS. As of the Closing Date, Company has
delivered to Lenders complete and correct copies of each Related Agreement and
of all exhibits and schedules thereto.
B. SELLER'S WARRANTIES. Except to the extent otherwise set forth herein
or in the schedules hereto, each of the representations and warranties given by
the Company and those parties defined as "Current Owners" to those parties
defined as "Purchasers" in the Recapitalization Agreement is true and correct as
of the date hereof (or as of any earlier date to which such representation and
warranty specifically relates) and will be true and correct as of the Closing
Date (or as of such earlier date, as the case may be), in each case subject to
the qualifications set forth therein and in the schedules to the
Recapitalization Agreement, in each case except to the extent that the cause of
any failure of any such representation or warranty to be true and correct,
either individually or in the aggregate with the causes of the failures of any
other such representations and warranties to be true and correct, would not
reasonably be expected to have a Material Adverse Effect.
C. SURVIVAL. Notwithstanding anything in the Recapitalization Agreement
to the contrary, the representations and warranties of the Current Owners set
forth in subsection 5.17B shall, solely for purposes of this Agreement, survive
the Closing Date for the benefit of Lenders.
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5.18 DISCLOSURE.
----------
All representations and warranties of Holdings or any of its Subsidiaries
and all information contained in the Confidential Information Memorandum or in
any Loan Document or Related Agreement or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries (other than budgets, projections or pro forma financial
information) for use in connection with the transactions contemplated by this
Agreement, taken as a whole, are true and correct in all material respects as of
the date made and do not omit to state a material fact (known to Holdings or
Company, in the case of any document not furnished by it) necessary in order to
make the statements contained herein or therein (taken as a whole) not
materially misleading as of the date made in light of the circumstances in which
the same were made as at the time made. Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by Holdings and Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. There
are no facts known (or which should upon the reasonable exercise of diligence be
known) to Holdings or Company (other than matters of a general economic nature)
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect and that have not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.19 SUBORDINATION OF PERMITTED SELLER NOTES AND SHAREHOLDER SUBORDINATED NOTES.
--------------------------------------------------------------------------
The subordination provisions of any Permitted Seller Notes and Shareholder
Subordinated Notes or other Subordinated Indebtedness are enforceable against
the holders thereof, and the Loans and other Obligations hereunder are and will
be within the definition of "Senior Indebtedness" or "Senior Debt", or similar
term, as applicable, included in such provisions.
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS
Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Holdings and Company shall perform, and shall cause each of their Subsidiaries
to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
--------------------------------------
Holdings will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to
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Administrative Agent, with sufficient copies for each Lender (and Administrative
Agent will, after receipt thereof, deliver to each Lender):
(i) Monthly Financials: as soon as available and in any event
------------------
within 30 days after the end of each month ending after the date that is
one month after the Closing Date, the consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such month and the related
consolidated statements of income of Holdings and its Subsidiaries,
(together with information relating to Consolidated Capital Expenditures
and Asset Sales), for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, to the extent
prepared on a monthly basis, all in reasonable detail and certified by the
principal financial officer or principal accounting officer of Holdings
that they fairly present, in all material respects, the financial condition
of Holdings and its Subsidiaries as at the dates indicated and the results
of their operations for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments and the absence of footnotes;
(ii) Quarterly Financials: as soon as available and in any event
--------------------
within 50 days after the end of each Fiscal Quarter, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income and cash flows of
Holdings and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, all in reasonable detail and certified by the principal
financial officer or principal accounting officer of Holdings that they
fairly present, in all material respects, the financial condition of
Holdings and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments and the
absence of footnotes, and (b) a narrative report describing the operations
of Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter; provided, however, that Company may deliver to Administrative
-------- -------
Agent in lieu of such narrative report copies of the unaudited quarterly
report filed by Holdings with the Securities and Exchange Commission on
Form 10-Q in respect of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
-------------------
within 105 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income, partner's capital,
and cash flows of Holdings and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial statements,
all in reasonable detail and certified by the principal financial officer
or principal accounting officer of Holdings that they fairly present,
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in all material respects, the financial condition of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, (b) a narrative report
describing the operations of Holdings and its Subsidiaries in the form
prepared for presentation to senior management for such Fiscal Year,
provided, however, that Company may deliver to Administrative Agent in lieu
-------- -------
of such narrative report copies of the report filed by Holdings with the
Securities and Exchange Commission on Form 10-K in respect of such Fiscal
Year, and (c) in the case of such consolidated financial statements, a
report thereon of an Independent Public Accountant, which report shall be
unqualified, shall express no doubts about the ability of Holdings and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects,
the consolidated financial position of Holdings and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with each
-------------------------------------
delivery of financial statements of Holdings and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
Holdings stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Holdings and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Holdings has taken, is taking and proposes to take with respect thereto;
and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
(except in respect of monthly financial statements) with the restrictions
contained in Section 7, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable
accounting period;
(v) Reconciliation Statements: if, as a result of any change in
-------------------------
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Holdings and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies been
made, then (1) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, consolidated financial statements of Holdings and
its Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such periods, and
(2) together with
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each delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiii) of this subsection 6.1 following such change, a written
statement of the principal accounting officer or principal financial
officer of Holdings setting forth the differences (including any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such
change;
(vi) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements of Holdings and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default of a financial nature has come to their attention and, if
such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
--------
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination, and (c) stating that
based on their audit examination nothing has come to their attention that
causes them to believe either or both that the information contained in the
certificates delivered therewith pursuant to sub division (iv) above is
not correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of subdivision (iv) above for
the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports
submitted to Holdings by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
------------------------------
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Holdings to analysts
or its security holders or by any Subsidiary of Holdings to analysts or its
security holders other than Holdings or another Subsidiary of Holdings, (b)
all regular and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if any, filed by
Holdings or any of its Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other written,
publicly announced notices by Holdings or any of its Subsidiaries
concerning material developments in the business of Holdings or any of its
Subsidiaries;
(ix) Events of Default, etc.: promptly upon any Responsible Officer
-----------------------
of Holdings or Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
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claimed Event of Default or Potential Event of Default, (b) that any Person
has given any notice to Holdings or any of its Subsidiaries or taken any
other action with respect to a claimed default or event or condition of the
type referred to in subsection 8.2, (c) of any condition or event that
would be required to be disclosed in a current report filed by Holdings or
Company with the Securities and Exchange Commission on Form 8-K (Items 1,
2, 4, 5 and 6 of such Form as in effect on the date hereof) if Holdings or
Company were required to file such reports under the Exchange Act, or (d)
of the occurrence of any event or change that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect, an
Officers' Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Holdings or Company has taken, is taking and proposes to take with respect
thereto;
(x) Litigation or Other Proceedings: promptly upon any Responsible
-------------------------------
Officer of Holdings or Company obtaining knowledge of (a) the institution
of, or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries or any
property of Holdings or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Holdings or Company
to Lenders or (b) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Holdings or Company to enable Lenders and their
counsel to evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the occurrence
------------
of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
-------------
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan, as Administrative Agent shall reasonably request; (b) all notices
received by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA
Event; and (c) copies
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of such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
---------------
later than 30 days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year and the next succeeding
Fiscal Year (the "FINANCIAL PLAN" for such Fiscal Years), including (a) a
forecasted consolidated balance sheet and forecasted consolidated
statements of income and cash flows of Holdings and its Subsidiaries for
each such Fiscal Year, together with a pro forma Compliance Certificate for
--- -----
the first such Fiscal Year and an explanation of the assumptions on which
such forecasts are based, and (b) such other information regarding such
projections as Administrative Agent may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the
---------
last day of each Fiscal Year, a report in form and substance satisfactory
to Administrative Agent outlining all material changes made to insurance
coverage maintained as of the Closing Date or the date of the most recent
such report by Holdings and its Subsidiaries;
(xv) New Subsidiaries: promptly upon any Person becoming a
----------------
Subsidiary of Holdings, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Holdings
and (b) the ownership and debt and equity capitalization of such
Subsidiary;
(xvi) Material Contracts: promptly, and in any event within ten
------------------
Business Days after any Material Contract of Holdings or any of its
Subsidiaries is terminated prior to its scheduled term or amended in a
manner that is materially adverse to Holdings or such Subsidiary, as the
case may be, or any new Material Contract is entered into, a written
statement describing such event with copies of such material amendments or
new contracts, and an explanation of any actions being taken with respect
thereto;
(xvii) Borrowing Base Certificate. Commencing August 1998, as soon
--------------------------
as available and in any event within 15 days after the end of each monthly
accounting period (ending on the last day of each calendar month), furnish
to the Administrative Agent a Borrowing Base Certificate as at the last day
of such accounting period; and
(xviii) Other Information: with reasonable promptness, such other
-----------------
information and data with respect to Holdings or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent.
6.2 CORPORATE/PARTNERSHIP EXISTENCE, ETC.
-------------------------------------
Except as permitted under subsection 7.7, Holdings will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate or partnership existence, as applicable, and all rights and
franchises material to its business; provided, however that neither Holdings nor
-------- -------
any of its Subsidiaries shall be required to preserve any such right or
franchise if the Board of Directors of Holdings or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of Holdings or such Subsidiary, as the case may
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be, and that the loss thereof is not disadvantageous in any material respect to
Holdings, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
----------------------------------------------
A. Holdings will, and will cause each of its Subsidiaries to, pay all
federal, state and other material taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
material sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided that no such
--------
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(1) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such contest proceedings conclusively operate to stay the sale of any portion of
the Collateral to satisfy such charge or claim.
B. Holdings will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Holdings or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
--------------------------------------------------------
INSURANCE/CONDEMNATION PROCEEDS.
- -------------------------------
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained, at a general maintenance
level at least equal to that in existence as of the Closing Date, in good
repair, working order and condition, ordinary wear and tear and damage by
casualty excepted, all material properties used or useful in the business of
Company and its Subsidiaries (including all Intellectual Property) and from time
to time will make or cause to be made all repairs, renewals and replacements
thereof which are useful, customary or appropriate for companies in similar
businesses; and Company will, and will cause each of its Subsidiaries to, keep
all such material properties, including, without limitation, all Rental
Equipment in the United States other than (i) assets located in the United
States Virgin Islands and (ii) other assets located in Canada or a Caribbean
jurisdiction; provided that the total value of such assets contributed or
otherwise financed by Company or a Permitted Domestic Subsidiary with respect to
a Permitted Foreign Subsidiary or invested by Company and Permitted Domestic
Subsidiaries in such foreign jurisdictions shall not exceed 3% of consolidated
total assets of Company and its Subsidiaries.
B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of Company
and its Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for Persons similarly situated
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in the industry. Without limiting the generality of the foregoing, Company will
maintain or cause to be maintained (i) flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, and (ii)
replacement value property insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are in accordance with normal industry
practice. Each such policy of insurance related to property damage or casualty
shall (a) name Administrative Agent for the benefit of Lenders as an additional
insured thereunder as its interests may appear and (b) in the case of each
business interruption and casualty insurance policy, contain a loss payable
clause or endorsement, reasonably satisfactory in form and substance to
Administrative Agent, that names Administrative Agent for the benefit of Lenders
and lenders under the Term Loan Credit Agreement as the loss payee thereunder
for any covered loss in excess of $5,000,000 in any Fiscal Year and provides for
at least 30 days prior written notice to Administrative Agent of any
modification or cancellation of such policy.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Casualty Insurance/Condemnation Proceeds. Within ten Business
----------------------------------------
Days of receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds, (a) so long as no Event of Default shall
have occurred and be continuing, and so long as the aggregate amount of Net
Insurance/Condemnation Proceeds received in any Fiscal Year does not exceed
an amount equal to 2% of the consolidated assets of Holdings and its
Subsidiaries, Company may deliver to Administrative Agent an Officers'
Certificate setting forth (1) that portion of such Net
Insurance/Condemnation Proceeds (the "PROPOSED INSURANCE REINVESTMENT
PROCEEDS") that Company or such Subsidiary intends to use (or enter into a
contract to use) within 365 days of such date of receipt to pay or
reimburse the costs of repairing, restoring or replacing the assets in
respect of which such Net Insurance/Condemnation Proceeds were received or
to reinvest in assets used in the ordinary course of the business and (2)
the proposed use of the Proposed Insurance Reinvestment Proceeds and such
other information with respect to such proposed use as Administrative Agent
may reasonably request, and Company shall, or shall cause one or more of
its Subsidiaries to, promptly and diligently apply such Proposed Insurance
Reinvestment Proceeds to pay or reimburse the costs of repairing, restoring
or replacing the assets in respect of which such Proposed Insurance
Reinvestment Proceeds were received, or to reinvest in assets used in the
ordinary course of business of Company or, to the extent the aggregate
amount of Net Insurance/Condemnation Proceeds received in any Fiscal Year
exceeds an amount equal to 2% of the consolidated assets of Holdings and
its Subsidiaries and are not so applied, to prepay the Loans as provided in
subsection 2.4A(iii)(b), and (b) if an Event of Default shall have occurred
and be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans as provided in
subsection 2.4A(iii)(b).
(ii) Net Insurance/Condemnation Proceeds Received by Administrative
--------------------------------------------------------------
Agent. (a) Within ten Business Days of receipt by Administrative Agent of
-----
any Net Insurance/Condemnation Proceeds as loss payee, if and to the
extent Company or Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them
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directly) to prepay the Loans pursuant to clause (i) above, Administrative
Agent shall, and Company hereby authorizes Administrative Agent to, apply
such Net Insurance/Condemnation Proceeds to prepay the Loans as provided
in subsection 2.4A(iii)(b), and (b) within ten Business Days of receipt by
Administrative Agent of any Net Insurance/Condemnation Proceeds as loss
payee to the extent the foregoing clause (a) does not apply, Administrative
Agent shall deliver such Net Insurance/Condemnation Proceeds to Company,
and Company shall, or shall cause one or more of its Subsidiaries to, apply
such Net Insurance/Condemnation Proceeds to the costs of repairing,
restoring, or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or to reinvestment in assets
used in the ordinary course of the business.
6.5 INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE; LENDER
----------------------------------------------------------------------
MEETING.
-------
A. INSPECTION RIGHTS. Holdings shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Holdings or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Holdings or Company may, if they so choose, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested; provided, however, that each Lender shall coordinate with
-------- -------
Administrative Agent the frequency and timing of such visits and inspections so
as to reasonably minimize the burden imposed on Holdings and its Subsidiaries;
and provided further, however, that provided no Potential Event of Default or
-------- ------- -------
Event of Default shall have occurred, there shall be no more than one such visit
by Lenders in any calendar month.
B. AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE. Holdings shall, and
shall cause each of its Subsidiaries to, permit any authorized representatives
designated by Administrative Agent to (i) conduct one audit of all books,
records, Parts and Supplies Inventory and accounts receivable of Loan Parties
during each twelve-month period after the Closing Date, each such audit to be in
scope and substance reasonably satisfactory to Administrative Agent, and (ii) to
review the results of the initial audit referred to in subsection 6.5D, all upon
reasonable notice and at such reasonable times during normal business hours as
may reasonably be requested.
C. LENDER MEETING. Company will, upon the request of Administrative
Agent or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Holdings and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
D. INTERNAL AUDIT. Once each calendar year, Company will provide to
Administrative Agent a copy of Company's internally prepared audit of Eligible
Cranes and Lifting Equipment and Eligible Trucks and Trailers which shall
include physical confirmation of the existence and appropriate titling of each
item of such equipment with an original purchase price or Orderly Liquidation
Value in excess of $250,000.
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6.6 COMPLIANCE WITH LAWS, ETC.
--------------------------
Holdings shall comply, and shall cause each of its Subsidiaries to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all Environmental Laws), except where
noncompliance would not reasonably be expected to cause, individually or in the
aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; COMPANY'S
-------------------------------------------------------------------
ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS AND
--------------------------------------------------------------------------
VIOLATIONS OF ENVIRONMENTAL LAWS.
--------------------------------
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Holdings and Company agree
that Administrative Agent may, (i) at any time a fact, event or condition arises
that, in Administrative Agent's reasonable discretion, Administrative Agent
determines could give rise to environmental liabilities that would materially
adversely affect any material Facility, retain, at Company's expense, an
independent professional consultant to review any environmental audits,
investigations, analyses and reports relating to Hazardous Materials at such
Facility prepared by or for Company and (ii) in the event (a) Administrative
Agent reasonably believes that Company or Holdings has breached any
representation, warranty or covenant contained in subsection 5.6 (with respect
to Environmental Claims or Environmental Laws), 5.13, 6.6 (with respect to
Environmental Laws) or 6.7 in any material respect or that there has been a
material violation of Environmental Laws at any Facility or by Holdings or any
of its Subsidiaries at any other location conduct its own investigation of such
breach or violation or (b) an Event of Default has occurred and is continuing,
conduct its own investigation of any Facility; provided that, in the case of any
--------
Facility no longer owned, leased, operated or used by Holdings or any of its
Subsidiaries, Company and Holdings shall only be obligated to use their
reasonable best efforts to obtain permission for Administrative Agent's
professional consultant to conduct an investigation of such Facility. For
purposes of conducting an investigation pursuant to clause (ii) of the preceding
sentence, Company and Holdings hereby grant to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Holdings or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith (to the extent, at any Facility
leased by Holdings or any of its Subsidiaries, such actions are permitted by the
owner of such Facility). Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Holdings and 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 such Facility or
to cause any damage or loss to any property at such Facility. Holdings, Company
and Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
subsection 6.7A will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions, to monitor and
police the Loans and to protect Lenders' security interests, if any, created by
the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Company with the understanding that Company and Holdings acknowledge
and agree that (x) they will indemnify and hold harmless Administrative Agent
and each Lender from any costs, losses or liabilities relating to Holdings' or
Company's use of or reliance on such report, (y) neither Administrative Agent
nor any Lender makes any representation or
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warranty with respect to such report, and (z) by delivering such report to
Company, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
B. ENVIRONMENTAL DISCLOSURE. Company will deliver to Administrative
Agent, with sufficient copies for each Lender (and Administrative Agent will,
after receipt thereof, deliver to each Lender):
(i) Environmental Audits and Reports. As soon as practicable
--------------------------------
following receipt thereof, copies of all material environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Holdings or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to environmental matters at any Facility that could reasonably
be expected to have a Material Adverse Effect.
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
--------------------------------------------------
upon the occurrence thereof, written notice describing in reasonable detail
(a) any Release required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws
unless such Release could not reasonably be expected to result in a
Material Adverse Effect, (b) any remedial action taken by Company, Holdings
or any other Person in response to (1) any Hazardous Materials Activities
the existence of which would reasonably be expected to result in one or
more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims of which Holdings
or any of its Subsidiaries has notice that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect, and (c) Company's or Holdings' discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any material
Facility that would reasonably be expected to cause such material Facility
or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws, unless such restrictions could not reasonably be
expected to have a Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
------------------------------------------------------
Releases, Etc. As soon as practicable following the sending or receipt
-------------
thereof by Holdings or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, would reasonably be expected to give rise
to a Material Adverse Effect, (b) any Release required to be reported to
any federal, state or local governmental or regulatory agency unless such
Release could not reasonably be expected to result in a Material Adverse
Effect, and (c) any request for information from any governmental agency
that suggests such agency is investigating whether Holdings or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity unless such Hazardous Materials Activity could not reasonably be
expected to have a Material Adverse Effect.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
--------------------------------------------------------------
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to (1)
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expose Holdings or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (2) affect the ability of Holdings
or any of its Subsidiaries to maintain in full force and effect all
material Governmental Authorizations required under any Environmental Laws
for their respective operations and (b) any proposed action to be taken by
Holdings or any of its Subsidiaries to modify current operations in a
manner that would reasonably be expected to subject Holdings or any of its
Subsidiaries to any material additional obligations or requirements under
any Environmental Laws where such obligations or reimbursements would
reasonably be expected to have a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
-----------------
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. HOLDINGS' AND COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS
ACTIVITIES, ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) Remedial Actions Relating to Hazardous Materials Activities.
-----------------------------------------------------------
Holdings shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim that would, in either case, reasonably be expected to
have a Material Adverse Effect. In the event Holdings or any of its
Subsidiaries undertakes any such action with respect to any Hazardous
Materials, Holdings or such Subsidiary shall conduct and complete such
action in material compliance with all applicable Environmental Laws and in
accordance an all material respects with the policies, orders and
directives of all federal, state and local governmental authorities except
when, and only to the extent that, Holdings' or such Subsidiary's liability
with respect to such Hazardous Materials Activity is being contested in
good faith by Holdings or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
--------------------------------------------------------------
Environ mental Laws. Holdings shall promptly take, and shall cause each of
-------------------
its Subsidiaries promptly to take, any and all reasonable actions necessary
to (i) cure any violation of applicable Environmental Laws by Holdings or
its Subsidiaries where such violation would reasonably be expected to have
a Material Adverse Effect and (ii) make an appropriate response to any
Environmental Claim against Holdings or any of its Subsidiaries (of which
Holdings or any of its Subsidiaries has notice) where such Environmental
Claim would reasonably be expected to have a Material Adverse Effect, and
discharge any material obligations it may have to any Person thereunder.
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6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
-----------------------------------------------------------------
DOCUMENTS BY SUBSIDIARIES AND FUTURE SUBSIDIARIES.
-------------------------------------------------
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Subsidiary which is an Excluded Subsidiary as
of the Closing Date ceases to be an Excluded Subsidiary or any Person becomes a
Subsidiary (other than an Excluded Subsidiary) of Company after the date hereof,
Company will promptly notify Administrative Agent of that fact and cause such
Subsidiary to execute and deliver to Administrative Agent counterparts of the
Subsidiary Guaranty and the Pledge and Security Agreement and to take all such
further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsection 4.1J) as may be reasonably necessary or, in the reasonable opinion of
Administrative Agent, desirable to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company shall
deliver to Administrative Agent, together with such Loan Documents pursuant to
clause A above, (i) (y) if such Subsidiary is a corporation (a) certified copies
of such Subsidiary's Certificate or Articles of Incorporation, together with a
good standing certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which such Person is qualified as a
foreign corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (b) a copy of such Subsidiary's Bylaws, certified by its
secretary or an assistant secretary as of a recent date prior to their delivery
to Administrative Agent, (c) a certificate executed by the corporate secretary
or an assistant corporate secretary of such Subsidiary as to (i) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such Loan Documents
are in full force and effect and have not been modified or amended and (ii) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, and (ii) (z) if such Subsidiary is a limited partnership, (a) from or
with respect to such Subsidiary's General Partner, each of the items required to
be delivered under item (a) of clause (x) above with respect to such General
Partner, if it is a corporation, (b) certified copies of its Certificate of
Limited Partnership, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation or formation, each dated
a recent date prior to their delivery to Administrative Agent, and (c) copies of
its limited partnership agreement, certified as true, correct and in full force
and effect as of the date of its delivery to Administrative Agent, by the
corporate secretary or an assistant secretary of its general partner or an
officer of its limited partner, and (iii) to the extent requested by
Administrative Agent, a favorable opinion of counsel to such Subsidiary, in form
and substance reasonably satisfactory to Administrative Agent and its counsel,
as to (a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of such Loan Documents against such Subsidiary, (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be reasonably satisfactory in
form and substance to Administrative Agent and its counsel.
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6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
-------------------------------------------------------------------
PROPERTY COLLATERAL.
-------------------
A. CONFORMING LEASEHOLD INTERESTS. If Holdings or any of its
Subsidiaries acquires any Material Leasehold Property, Holdings shall use
commercially reasonable efforts to, or shall cause such Subsidiary to use
commercially reasonable efforts to, cause such Leasehold Property to be a
Conforming Leasehold Interest and Holdings shall deliver evidence of the
foregoing to Administrative Agent.
B. ADDITIONAL MORTGAGES, ETC. From and after the Closing Date, in the
event that (i) Holdings or any Subsidiary Guarantor acquires any fee interest in
real property or any Material Leasehold Property or (ii) at the time any Person
becomes a Subsidiary Guarantor, such Person owns or holds any fee interest in
any Material Real Property Asset or any Material Leasehold Property, in either
case excluding any such Material Real Property Asset or Material Leasehold
Property the encumbrancing of which requires the consent of any applicable
lessor or (in the case of clause (ii) above) then-existing senior lienholder,
where Holdings and its Subsidiaries are unable, after exercising commercially
reasonable efforts, to obtain such lessor's or senior lienholder's consent (any
such non-excluded Material Real Property Asset described in the foregoing clause
(i) or (ii) being an "ADDITIONAL MORTGAGED PROPERTY"), Holdings or such
Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Additional Mortgaged Property or
becomes a Subsidiary Guarantor, as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage
-------------------
(an "ADDITIONAL MORTGAGE"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to
-------------------
such Loan Party, in form and substance satisfactory to Administrative Agent
and its counsel, as to the due authorization, execution and delivery by
such Loan Party of such Additional Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the enforceability
of such Additional Mortgage and such other matters (including any matters
governed by the laws of such state regarding personal property security
interests in respect of any Collateral related to such Additional Mortgaged
Property) as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent;
(iii) Title Insurance. (a) If required by Administrative Agent, an
---------------
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "ADDITIONAL MORTGAGE POLICY") issued by the Title Company with
respect to such Additional Mortgaged Property, in an amount reasonably
satisfactory to Administrative Agent, insuring fee simple title to, or a
valid leasehold interest in, such Additional Mortgaged Property vested in
such Loan Party and assuring Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien on
such Additional Mortgaged Property,
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subject only to standard survey exceptions, which Additional Mortgage
Policy (1) shall include an endorsement for mechanics' liens, for future
advances (in each case, if available) under this Agreement and for any
other matters reasonably requested by Administrative Agent and (2) shall
provide for affirmative insurance and such reinsurance as Administrative
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Administrative Agent; and (b) evidence
satisfactory to Administrative Agent that such Loan Party has (i) delivered
to the Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Additional Mortgage Policy
and (ii) paid to the Title Company or to the appropriate governmental
authorities all expenses and premiums of the Title Company in connection
with the issuance of the Additional Mortgage Policy and all recording and
stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Additional Mortgage in the appropriate real
estate records; provided, however, that Administrative Agent shall allow
for such reasonable revisions to the applicable Mortgage and shall
otherwise take such steps as are reasonable and customary to minimize
recording, mortgage recording, stamp, documentary and intangible taxes, at
Company's cost;
(iv) Title Report. If no Additional Mortgage Policy is required
------------
with respect to such Additional Mortgaged Property, a title report issued
by the Title Company with respect thereto, last updated not more than 30
days prior to the date such Additional Mortgage is to be recorded and
reasonably satisfactory in form and substance to Administrative Agent;
(v) Copies of Documents Relating to Title Exceptions. Copies of
------------------------------------------------
all recorded documents listed as exceptions to title or otherwise referred
to in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(vi) Matters Relating to Flood Hazard Properties. (a) To the extent
-------------------------------------------
reasonably requested by the Administrative Agent, evidence, which may be in
the form of a surveyor's note on a survey or a report from a flood hazard
search firm, as to (1) whether such Additional Mortgaged Property is a
Flood Hazard Property and (2) if so, whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgement of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program,
evidence that Holdings or Company has obtained flood insurance in respect
of such Flood Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve System; and
(vii) Environmental Audit. If required by Administrative Agent,
-------------------
reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent and prepared by environmental
consultants reasonably satisfactory to Administrative Agent,
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concerning any environmental hazards or liabilities to which Holdings or
any of its Subsidiaries may be subject with respect to such Additional
Mortgaged Property.
C. REAL ESTATE APPRAISALS. To the extent reasonably requested by the
Administrative Agent, Holdings shall, and shall cause each of its Subsidiaries
to, permit an independent real estate appraiser reasonably satisfactory to
Administrative Agent, upon reasonable notice, to visit and inspect any
Additional Mortgaged Property for the purpose of preparing an appraisal of such
Additional Mortgaged Property satisfying the requirements of any applicable laws
and regulations (in each case to the extent required under such laws and
regulations as determined by Administrative Agent in its discretion).
6.10 INTEREST RATE PROTECTION.
------------------------
At all times after the date which is 90 days after the Closing Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the Loans, each such Interest Rate Agreement to be for a term and in
form and substance reasonably satisfactory to Administrative Agent, which
Interest Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate
Component (as hereinafter defined) of the interest costs to Company with respect
to an aggregate notional principal amount of not less than $150,000,000 (based
on the assumption that such notional principal amount was a Eurodollar Rate Loan
with an Interest Period of three months) to a rate equal to not more than 7.5%
per annum. For purposes of this subsection 6.10, the term "UNADJUSTED
EURODOLLAR RATE COMPONENT" means that component of the interest costs to Company
in respect of a Eurodollar Rate Loan that is based upon the rate obtained
pursuant to clause (i) of the definition of Adjusted Eurodollar Rate.
6.11 POST-CLOSING DELIVERIES.
-----------------------
Company shall cause any actions set forth on Schedule 6.11 annexed hereto
-------------
to be taken within the time period(s) specified on such Schedule 6.11 and in
-------------
form and substance reasonably satisfactory to Agents.
6.12 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.
--------------------------------------------
Company, and shall cause each of its Subsidiaries to, use and maintain its
Deposit Accounts and cash management systems in a manner reasonably satisfactory
to Administrative Agent and comply with limitations on cash on hand, all as set
forth on Schedule 6.12 annexed hereto.
-------------
6.13 YEAR 2000.
---------
No later than December 31, 1998, Company shall perform all acts reasonably
necessary to ensure that Company and its Subsidiaries become Year 2000
Compliant. Such acts shall include, to the extent reasonably necessary to
become Year 2000 Complaint, performing a comprehensive review and assessment of
all of Company's systems and adopting a detailed plan, with itemized budget, for
the remediation, monitoring and testing of such systems. Company shall,
immediately upon request, provide to Administrative Agent such certifications or
other evidence of Company's
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compliance with the terms of this paragraph as Administrative Agent may from
time to time require.
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS
Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Holdings and Company shall perform, and shall cause each of their Subsidiaries
to perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Permitted Subsidiaries may become and remain
liable with respect to (a) Indebtedness in respect of Capital Leases and
(b) Indebtedness secured by Liens permitted under subsection 7.2A(ix);
provided that the aggregate amount of Indebtedness described in clauses (a)
--------
and (b), together with the amount of any purchase money Indebtedness and
Capital Lease obligations of the type permitted under subsection 7.1(x),
shall not exceed $10,000,000 at any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any wholly-owned Permitted Subsidiary, and any wholly-owned
Permitted Subsidiary may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Subsidiary; provided that
--------
(a) all such intercompany Indebtedness shall be evidenced by promissory
notes, (b) all such intercompany Indebtedness owed by Company to any such
Subsidiary shall be subordinated in right of payment to the payment in full
of the Obligations pursuant to the terms of the applicable promissory notes
or an intercompany subordination agreement, (c) any payment by any such
Subsidiary of Company under any guaranty of the Obligations shall result in
a pro tanto reduction of the amount of any intercompany Indebtedness owed
--- -----
by such Subsidiary to Company or to any of such Subsidiary Guarantors for
whose benefit such payment is made in the case of any Indebtedness incurred
by a
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Permitted Domestic Subsidiary or Permitted Foreign Subsidiary, such
Indebtedness is incurred in accordance with the definitions thereof.
(v) Holdings and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by the Term Loan Credit Documents;
(vi) Holdings and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by, and with respect to guaranties of,
the Senior Notes and the Senior Discount Debentures;
(vii) Holdings may become and remain liable with respect to
Shareholder Subordinated Notes issued in lieu of cash payments permitted
under subsection 7.5 to repurchase Securities of Holdings held by
terminated employees and officers;
(viii) Holdings or Company may become and remain liable with respect
to Permitted Seller Notes issued as consideration in Permitted
Acquisitions; provided that the aggregate principal amount of Permitted
--------
Seller Notes issued by both Holdings and Company shall not exceed
$10,000,000 at any time outstanding; provided that Holdings may issue
Permitted Seller Notes in amounts in excess of that otherwise permitted
under this clause (viii) so long as such Permitted Seller Notes shall not
provide for any cash call or cash payment of principal interest prior to
the final maturity of the Loans;
(ix) Subject to the applicable restrictions of subsections 7.1(iii)
and 7.1(xvii), Company or any Permitted Subsidiary acquired pursuant to a
Permitted Acquisition may become or remain liable with respect to
Indebtedness of a Subsidiary of Company existing at the time of acquisition
by Company or a Subsidiary of a Subsidiary or assets pursuant to a
Permitted Acquisition; provided that (a) such Indebtedness was not incurred
--------
in connection with or in anticipation of such Permitted Acquisition, (b)
such Indebtedness does not constitute debt for borrowed money (other than
debt for borrowed money incurred in connection with industrial revenue or
industrial development bond financings), it being understood and agreed
that Capital Lease obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (ix) and (c)
at the time of such Permitted Acquisition such Indebtedness does not exceed
10% of the total value of the assets of the Subsidiary so acquired, or of
the assets so acquired, as the case may be; provided, however, that (a) the
-------- -------
aggregate amount of any such Capital Lease obligations and purchase money
Indebtedness, together with the aggregate amount of other Indebtedness of
the type permitted under subsection 7.1(iii), in each case at any time
outstanding, shall not exceed the maximum amount set forth in such
subsection, and (ii) the aggregate amount of any such Indebtedness other
than Capital Lease obligations and purchase money Indebtedness, together
with other Indebtedness of the type permitted under subsection 7.1(xv), in
each case at any time outstanding, shall not exceed the maximum amount set
forth in such subsection;
(x) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 7.1 annexed hereto;
------------
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(xi) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness incurred by the Company or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, or from guarantees or letters of
credit, surety bonds or performance bonds securing the performance of the
Company or any such Subsidiary pursuant to such agreements, in connection
with acquisitions or dispositions of any business, assets or Subsidiary of
the Company or any of its Subsidiaries;
(xii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness which may be deemed to exist pursuant to any
guarantees, performance, surety, statutory, appeal or similar obligations
obtained in the ordinary course of business;
(xiii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(xiv) Holdings may become and remain liable with respect to
Indebtedness of Holdings in respect of any Restricted Junior Payment made
to it and permitted hereunder to the extent such Restricted Junior Payment
is recharacterized as a loan instead of a distribution;
(xv) Company and Permitted Subsidiaries may become and remain liable
with respect to Indebtedness not otherwise permitted under this subsection;
provided that the aggregate principal amount of such Indebtedness, together
--------
with the amount of any Indebtedness of the type permitted under subsection
7.1(ix) (other than Capital Lease obligations and purchase money
Indebtedness), shall not exceed $20,000,000 at any time outstanding,
provided further that any portion of such Indebtedness which is secured x)
--------
shall not exceed $10 million in the aggregate, y) shall only be secured by
assets acquired after the Closing Date or assets for which the
Administrative Agent has agreed to release the Lien of the Collateral
Documents, provided, in no event shall such assets be Trucks and Trailers,
--------
Cranes and Lifting Equipment, Accounts or Parts and Supplies Inventory, and
z) shall have terms and provisions no more favorable to the Lender(s) of
such Indebtedness in any material respect to the term and provisions of
this Agreement and the other Loan Documents (any such secured Indebtedness,
the "ADDITIONAL SECURED INDEBTEDNESS") and; provided still further that,
-------- ----- -------
any such Indebtedness outstanding under this clause (xv) in excess of
$10,000,000 shall be unsecured and subordinated to the Loans and the Term
Loan upon terms reasonably acceptable to the Administrative Agent and no
principal payments of such Indebtedness shall be made during the term of
the Loans or the Term Loan; and
(xvi) Subsidiaries of Company may become and remain liable with
respect to Indebtedness consisting of a converted equity Investment by
Company or another Subsidiary of Company in such Subsidiaries; provided
--------
that the underlying equity Investment was permitted hereunder at the time
of such conversion.
Notwithstanding anything herein to the contrary, y) obligations incurred by
Company and its Subsidiaries in connection with the purchase of new or used
equipment in the ordinary course of
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business by the Company that is financed on terms of six (6) months or less
shall not be deemed Indebtedness for the purpose of this subsection 7.1 and z)
any Permitted Foreign Subsidiary that does not execute the Subsidiary Guaranty
and the Pledge and Security Agreement may not incur any indebtedness (other that
pursuant to clause (iv) above) pursuant to the foregoing except in connection
with ordinary working capital financing.
7.2 LIENS AND RELATED MATTERS.
-------------------------
A. PROHIBITION ON LIENS. Holdings shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens created pursuant to the Collateral Documents in favor of
the Administrative Agent for the benefit of the Lenders and/or the lenders
under the Term Loan Credit Agreement securing Loan Parties' obligations
under this Agreement, the Term Loan Credit Agreement and/or under Hedge
Agreements with any such Lenders and/or lenders or their respective
affiliates; provided that such Liens for the benefit of the lenders under
--------
this Agreement shall at all times secure the Obligations on a First
Priority basis;
(iii) Liens arising in connection with Capital Leases permitted under
subsection 7.1(iii)(a); provided that no such Lien shall extend to or cover
--------
any Collateral or assets other than the assets subject to such Capital
Leases;
(iv) Liens of landlords arising under lease contracts in the
ordinary course of business;
(v) Liens consisting of rights of set-off and off-set of a
customary nature or bankers' liens on amounts of deposit, whether arising
by contract or operation of law, incurred in the ordinary course of
business;
(vi) Liens solely on any cash earnest money deposits made by Company
or any of its Subsidiaries in connection with any letter of intent or
purchase agreement entered into by it;
(vii) Liens incurred in connection with the purchase or shipping of
goods or assets on the related assets and proceeds thereof in favor of the
seller or shipper of such goods or assets.
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(viii) Liens securing Indebtedness permitted by subsection 7.1(iii)(b)
incurred (a) to finance the acquisition, construction or improvement of any
real property or tangible personal property assets acquired or held by
Company or any of its Subsidiaries in the ordinary course of business;
provided that (1) such Liens shall be created within 180 days after the
--------
acquisition, construction or improvement of such assets, and (2) the
principal amount of Indebtedness secured by any such Liens shall at no time
exceed 100%, and the proceeds of such Indebtedness shall be used to provide
not less than 75%, of the original purchase price of such asset or the
amount expended to construct or improve such asset, as the case may be; or
(b) to renew, extend or refinance any Indebtedness described in clause (a);
provided that the amount of any such Indebtedness does not exceed the
--------
amount of Indebtedness so renewed, extended or refinanced which is unpaid
and outstanding immediately prior to such renewal, extension or
refinancing; and provided further, that in the case of clause (a) or (b),
-------- -------
(1) such Liens attach solely to the assets financed with such Indebtedness,
(2) no recourse may be had under the Indebtedness secured by such Lien
against any Person other than the borrower of such Indebtedness for the
payment of principal, interest, fees, costs or premium on such Indebtedness
or for any claim based thereon, and (3) the financial covenants under any
Indebtedness secured by such Liens are, in each case, no more restrictive
than those set forth in this Agreement;
(ix) Liens securing Indebtedness permitted pursuant to subsection
7.1(ix) to the extent such Liens were in existence prior to a Permitted
Acquisition;
(x) Liens incurred in connection with the sale or factoring of
accounts receivable by Permitted Foreign Subsidiaries;
(xi) Liens securing Additional Secured Indebtedness;
(xii) Liens securing reimbursement of obligations in respect of
documentary letters of credit; provided, that such Liens attach only to the
documents, the goods covered thereby and the proceeds thereof;
(xiii) Liens upon specific items of inventory or other goods and
proceeds of the Company or any of its Subsidiaries securing such Person's
obligations in respect of bankers' acceptance issued or created or the
account of such Person to facilitate the purchase, shipment or storage of
such inventory or other goods;
(xiv) Liens encumbering customary initial deposits and margin
deposits, and similar Liens attaching to commodity trading accounts or
other brokerage accounts incurred in the ordinary course of business; and
(xv) Other Liens securing Indebtedness in an aggregate amount not to
exceed $1,000,000 at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Holdings or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to
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be made effective provision whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided that, notwithstanding the
--------
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not permitted by the
provisions of subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither Holdings nor any
of its Subsidiaries shall enter into any agreement (other than the Senior Note
Indenture, the Senior Discount Debentures, the Term Loan Credit Agreement or any
other agreement evidencing acquired Indebtedness or any agreement, note or
indenture relating to any Indebtedness under any debt basket, or any other
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO HOLDINGS OR OTHER
SUBSIDIARIES. Except as provided herein, Holdings will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Holdings or any
other Subsidiary of Holdings, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Holdings or any other Subsidiary of Holdings, (iii) make loans or
advances to Holdings or any other Subsidiary of Holdings, or (iv) transfer any
of its property or assets to Holdings or any other Subsidiary of Holdings,
except for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) this Agreement and the other Credit Documents, (c) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Company or any of its Subsidiaries, (d) customary
provisions restricting assignment of any licensing or other agreements entered
into by Company or any of its Subsidiaries in the ordinary course of business,
(e) the Senior Note Indenture, the Senior Discount Debentures, and the Term Loan
Documents or any agreement evidencing acquired Indebtedness and (f) customary
provisions restricting the transfer of assets subject to Liens permitted under
subsections 7.2A.
7.3 INVESTMENTS; JOINT VENTURES.
---------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Holdings and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Holdings may continue to own the Investments owned by it as of
the Closing Date in Company, and Company and its Subsidiaries may continue
to own the Investments owned by them as of the Closing Date in any
Subsidiaries of Company and make additional Investments in Permitted
Subsidiaries (in accordance with the definitions of Permitted Domestic
Subsidiaries and Permitted Foreign Subsidiaries;
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(iii) Holdings and its Subsidiaries may own Investments in their
respective Subsidiaries to the extent that such Investments reflect an
increase in the value of such Subsidiaries;
(iv) Company and its Subsidiaries may make intercompany loans to the
extent permitted under subsections 7.1(iv);
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
------------
(vi) Company and its Subsidiaries may make loans and advances to
employees, officers, executives or consultants to Company and its
Subsidiaries in the ordinary course of business of Company and its
Subsidiaries as presently conducted for the purpose of purchasing
Securities of Holdings so long as no cash is paid by Holdings or any of its
Subsidiaries in connection the acquisition of such Securities;
(vii) Company and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms
(including the dating of receivables) of Company or any such Subsidiary;
(viii) Company and its Subsidiaries may acquire and own Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(ix) Company and its Subsidiaries may make and own Investments
consisting of deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases and may make any
pledges or deposits permitted under subsection 7.2;
(x) Holdings may make equity contributions to the capital of
Company;
(xi) Company and its Permitted Subsidiaries may make and own
Investments in Subsidiaries pursuant to Permitted Acquisitions under
subsection 7.7(xviii);
(xii) Company and its Permitted Subsidiaries may make and own
Investments consisting of notes received in connection with any Asset Sale
or sale of other assets; provided that the aggregate principal amount of
--------
such notes at any time outstanding shall not exceed 1-1/2% of consolidated
total assets of Company and its Subsidiaries and such notes are secured by
a first priority perfected lien on such assets sold;
(xiii) Company and its Permitted Subsidiaries may make and own
Investments in any Person which (a) (1) result in the creation of an
account arising in the ordinary course of Company's or such Permitted
Subsidiary's business or (2) result from the restructure, reorganization or
similar composition of trade account obligations which arose in the
ordinary course of business and which are owing to Company or such
Permitted Subsidiary
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from financially distressed debtors, and (b) are, in each case, subject to
the Lien in favor of Administrative Agent under the Collateral Documents;
(xiv) Holdings and its Permitted Subsidiaries may make and own
Investments permitted under subsection 7.7;
(xv) Company and its Subsidiaries may make and own Investments in
wholly-owned Permitted Domestic Subsidiaries of Company consisting of
intercompany Indebtedness of such Permitted Subsidiaries converted to
equity Investments, to the extent necessary to maintain the solvency in
accordance with applicable legal requirements of such Permitted Subsidiary,
provided that the underlying intercompany Indebtedness was permitted
--------
hereunder at the time of such conversion;
(xvi) Permitted Foreign Subsidiaries of Holdings may make and own
Investments in Foreign Cash Equivalents;
(xvii) Company and its Permitted Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $10,000,000;
and
(xviii) Company and its Subsidiaries may make and own other
Investments in a Person or business in substantially the same line of
business as the Company and its Permitted Subsidiaries in an aggregate
amount not to exceed at any time an amount equal to the lesser of (y) 50%
of the amount of Net Equity Proceeds and (z) the amount such Net Equity
Proceeds that has not been applied to repay the Loans in accordance with
subsection 2.4A(iii)(d).
7.4 CONTINGENT OBLIGATIONS.
----------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty,
and Holdings may become and remain liable with respect to Contingent
Obligations in respect of the Holdings Guaranty;
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements required under subsection
6.10 or otherwise incurred in the ordinary course of business;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of (a) customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets, (b)
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endorsements of instruments for deposit or collection in the ordinary
course of business, and (c) standard contractual indemnities entered into
in the ordinary course of business;
(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under guarantees in the ordinary course
of business of the obligations of suppliers, customers, franchisees and
licensees of Holdings and its Subsidiaries;
(vi) Holdings and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
------------
hereto;
(vii) Holdings and the Subsidiary Guarantors may become and remain
liable with respect to Contingent Obligations arising under their
guaranties of the Senior Notes and the Term Loans as are required under the
Senior Note Indenture and the Term Loan Credit Documents, respectively;
(viii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of guarantees of obligations
of any Subsidiary of Company under any worker's compensation self-insurance
program of such Subsidiary administered in accordance with applicable law
relating to worker's compensation;
(ix) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of guarantees by Holdings and
its Subsidiaries of Indebtedness, leases and other contractual obligations
permitted to be incurred by Company or its Subsidiaries; and
(x) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations not otherwise permitted under this
subsection; provided that the maximum aggregate liability, contingent or
--------
otherwise, of Company and its Subsidiaries in respect of all such
Contingent Obligations, together with the aggregate principal amount of
Indebtedness of Company and its Subsidiaries incurred pursuant to
subsection 7.1(xv), shall at no time exceed $20,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
--------------------------
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment; provided that (i) any
--------
Subsidiary of Company may pay dividends to its equityholders, (ii) Company may
make dividends to its partners necessary to consummate the Recapitalization
Transactions, (iii) Holdings and Company may make any Restricted Junior
Payments in accordance with the terms of, and only to the extent required by,
the Recapitalization Agreement (iv) Company may make regularly scheduled
payments of principal and interest in respect of the Senior Notes in accordance
with the terms thereof, (v) Company may make Restricted Junior Payments to
Holdings to the extent required for Holdings to make, and Holdings may make,
regularly scheduled payments of interest in respect of the Shareholder
Subordinated Notes in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions contained in, such
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Shareholder Subordinated Notes, as applicable, (vi) Company may make regularly
scheduled principal and interest payments in respect of Permitted Seller Notes
to the extent permitted under subsection 7.1(viii) in accordance with the terms
of, and subject to the subordination provisions contained in, such Permitted
Seller Notes; (vii) Holdings may pay regularly scheduled distributions on the
Preferred Units and Qualified Preferred Units pursuant to the terms thereof
solely through the issuance of additional shares of such units, or by an
increase in the liquidation preference thereof; (viii) Company may exchange the
Senior Notes as contemplated by the Senior Note Indenture, and Holdings may
exchange the Senior Discount Debentures in accordance with the Senior Discount
Debentures; (ix) Company may make Restricted Junior Payments to Holdings, and
Holdings may make Restricted Junior Payments, (a) in an aggregate amount not to
exceed $1,000,000 in any Fiscal Year, to the extent necessary to permit Holdings
to pay accounting, legal, SEC related, and similar fees and expenses and (b) to
the partners of Holdings and the General Partner for Permitted Tax
Distributions; (x) so long as no Potential Event of Default or Event of Default
shall have occurred and be continuing, Company may make Restricted Junior
Payments to Holdings, and Holdings may make Restricted Junior Payments, to
permit the payment of the Bain Management Fees under the Bain Advisory Services
Agreement and (xi) Company may make Restricted Junior Payments to Holdings to
the extent required for Holdings to make, and Holdings may make, Restricted
Junior Payments in an aggregate amount not to exceed $1,500,000 in any Fiscal
Year to the extent necessary to make repurchases of Securities (and options or
warrants to purchase such Securities) of Holdings from employees (a) upon
termination (including by reason of death, disability or retirement) of such
employees or (b) pursuant to a contractual obligation of Holdings or any of its
Subsidiaries; provided however that, such amount for any Fiscal Year shall be
-------- -------
increased by an amount equal to the excess, if any, of such amount for the
previous Fiscal Year (as adjusted in accordance with this proviso) over the
actual amount expended for such previous Fiscal Year; provided further that such
--------
amount shall be reduced by the aggregate amount of all principal and interest
payments made on any Shareholder Subordinated Notes permitted under subsection
7.1(vii) in such Fiscal Year; and, provided still further, that any Restricted
-------- ----- -------
Junior Payments by Company to Holdings permitted under this subsection shall be
applied by Holdings for the purposes specified in this subsection.
7.6 FINANCIAL COVENANTS.
-------------------
A. MINIMUM INTEREST COVERAGE RATIO. Holdings and Company shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated
Interest Expense (excluding therefrom, for purposes of this subsection 7.6A
---------
only, the amount of any amortization of deferred financing costs, interest on
deferred compensation or payments made to obtain Interest Rate Agreements which
would otherwise be included in Consolidated Interest Expense) for any four-
Fiscal Quarter period (including any such four-quarter period commencing prior
to the Closing Date) ending during any of the periods set forth below to be less
than the correlative ratio indicated; provided that, for any measurement of
--------
Consolidated Interest Expense pursuant to this Subsection 7.6A made prior to the
completion of four Fiscal Quarters following the Closing Date, Consolidated
Interest Expense for the relevant Calculation Period shall equal the product of
(i) Consolidated Interest Expense for the period from the Closing Date to the
date of measurement multiplied by (ii) a fraction, the numerator of which is 365
---------- --
and the denominator of which is the number of days during the period from the
Closing Date to the date of measurement.
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=============================================
MINIMUM
INTEREST COVERAGE
PERIOD RATIO
=============================================
Closing Date - 6/30/99 1.4:1.0
7/1/99 and thereafter 1.5:1.0
=============================================
B. MAXIMUM LEVERAGE RATIO. Holdings and Company shall not permit the
Leverage Ratio as of the last day of any Fiscal Quarter ending after the Closing
Date to exceed 5.1:1.0.
C. MAXIMUM REVOLVER LEVERAGE RATIO. Holdings and Company shall not
permit the Revolver Leverage Ratio as of the last day of any Fiscal Quarter
ending after the Closing Date to Exceed 4.5:1.0.
D. CERTAIN CALCULATIONS. With respect to any period during which a
Permitted Acquisition occurs, for purposes of determining compliance with the
financial covenants set forth in this subsection 7.6, Consolidated Adjusted
EBITDA and Consolidated Interest Expense shall be calculated with respect to
such periods and such New Business on a pro forma basis (including (i) pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission as of January 1, 1997, and (ii)
cost savings resulting from head count reduction, closure of facilities and
similar restructuring charges whether (x) resulting from decisions made by
Company or (y) implemented by the management of the New Business within the six-
month period immediately preceding the closing of such Permitted Acquisition
(provided that the cost savings described in clause (y) are supportable and
quantifiable by the underlying accounting records of such business), which pro
forma adjustments shall be certified by the principal financial officer or
principal accounting officer of Company) using the historical financial
statements of the New Business so acquired or to be acquired and the
consolidated financial statements of Holdings and its Subsidiaries which shall
be reformulated (i) as if such Permitted Acquisition, and any acquisitions which
have been consummated during such period, and any Indebtedness or other
liabilities incurred or repaid in connection with any such acquisition had been
consummated or incurred at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding Loans incurred during such period), and (ii)
otherwise in conformity with certain procedures to be agreed upon between
Administrative Agent and Company, all such calculations to be in form and
substance reasonably satisfactory to Administrative Agent.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
----------------------------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Holdings or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, other than in the ordinary course of business,
transfer or otherwise dispose of (other
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than pursuant to a lease entered into in the ordinary course of business), in
one transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any other
Person or any division or line of business of any other Person, except:
(i) any Subsidiary of Company may be merged with or into Company or
any Subsidiary Guarantor, or be liquidated, wound up or dissolved, or all
or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to Company or any Subsidiary Guarantor; provided
--------
that, in the case of such a merger involving Company, Company shall be the
continuing or surviving corporation, and in the case of any other such
merger, such Subsidiary Guarantor shall be the continuing or surviving
corporation;
(ii) Company and its Subsidiaries may make Consolidated Capital
Expenditures in the ordinary course of business;
(iii) Company and its Subsidiaries may dispose of obsolete,
uneconomical, negligible, worn out or surplus property (including
Intellectual Property) in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
--------
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) subject to subsection 7.12, Company and its Subsidiaries may
make Asset Sales of assets having an aggregate fair market value not in
excess of $5,000,000; provided that the consideration received for such
--------
assets shall be in an amount at least equal to the fair market value
thereof and the proceeds of such Asset Sales shall be applied as required
by subsection 2.4B(iii)(a);
(vi) Company and its Subsidiaries may sell or discount, in each case
without recourse, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof;
provided that the aggregate amount of such accounts receivable sold
--------
pursuant to this clause (vi) shall not exceed in any Fiscal Year 10% of the
accounts receivable of Company and its Subsidiaries recorded for the
preceding Fiscal Year;
(vii) Company and its Subsidiaries may, in the ordinary course of
business, license as licensee or licensor patents, trademarks, copyrights
and know-how to or from third Persons, so long as any such license by
Company or any of its Subsidiaries in its capacity as licensor is permitted
to be assigned pursuant to the Collateral Documents (to the extent that a
security interest in such patents, trademarks, copyrights and know-how is
granted thereunder) and does not otherwise prohibit the granting of a Lien
by Company or any of its Subsidiaries pursuant to the Collateral Documents
in the Intellectual Property covered by such license;
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(viii) Company and its Subsidiaries may dispose of any Excluded
Subsidiary or its assets;
(ix) Company and its Subsidiaries may sell non-core businesses
acquired in connection with Permitted Acquisitions permitted pursuant to
subsection 7.3;
(x) Company and its Subsidiaries may sell or dispose of Cash
Equivalents and other investments permitted under subsection 7.3;
(xi) Company and its Subsidiaries may enter into letters of intent
and purchase agreements with respect to proposed acquisitions so long as
(a) any cash earnest money deposits required to be made by the Company or
its Subsidiaries in connection therewith are funded solely with new cash
equity contributions to the Company, (b) there shall be no recourse against
the Company or any of its Subsidiaries in respect of such letters of intent
or purchase agreements other than against any such cash earnest money
deposits and (c) neither the Company nor any of its Subsidiaries shall be
permitted to consummate any acquisition relating to such letter of intent
or purchase agreement without the prior written consent of the
Administrative Agent which consent may be withheld in Administrative
Agent's reasonable discretion except no consent shall be required with
respect to acquisitions made pursuant to subdivision (xiii) of this Section
7.7);
(xii) Holdings and its Subsidiaries may convert (whether by merger,
acquisition or otherwise, including the establishment of new corporations
to do so) from limited partnerships to "C" corporations or limited
liability companies so long as the security interests granted to the
Administrative Agent for the benefit of the Lenders pursuant to the
Collateral Documents shall remain in full force and effect and perfected
(to at least the same extent as in effect immediately prior to such
conversion);
(xiii) Company or any Subsidiary of Company may make other
acquisitions of assets and businesses (including acquisitions of the
capital stock or other equity interests of another Person whether by merger
or purchase), provided that:
--------
(a) immediately prior to and after giving effect to any such
acquisition, Company and its Subsidiaries shall be in compliance with
the provisions of subsection 7.13 hereof;
(b) if such acquisition is structured as a stock acquisition,
then either (A) the Person so acquired becomes a Subsidiary of Company
or (B) such Person is merged with and into Company or a Subsidiary of
Company (with Company or such Subsidiary being the surviving
corporation in such merger), and in any case, all of the provisions of
subsection 6.8 have been complied with in respect of such Person;
(c) the only consideration paid in connection with such
acquisition shall consist of cash, Common Units, Qualified Preferred
Units or Permitted Seller Notes;
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(d) (1) Company shall be in compliance, on a pro forma basis
giving effect to the proposed acquisition, with the covenants set
forth in subsection 7.6 hereof, and (2) no Event of Default or
Potential Event of Default shall have occurred and be continuing at
the time of such acquisition or shall be caused thereby; and Company
shall have delivered to Administrative Agent an Officer's Certificate
(together with supporting information therefor), in form and substance
reasonably satisfactory to Administrative Agent, certifying as to the
foregoing;
(e) any assets acquired pursuant to such acquisition by a Loan
Party shall be subject to a First Priority Lien in favor of
Administrative Agent on behalf of Lenders pursuant to the Collateral
Documents;
(f) the aggregate Acquisition Consideration paid by Company or
any such Subsidiary in any such acquisition does not exceed
$50,000,000; and
(g) Administrative Agent shall have received the following
information with regard to the Permitted Acquisition at least ten (10)
Business Days (or at such later date as such information first becomes
available) prior to the consummation thereof: (y) summary information
prepared by the Company describing the nature of the business or
Person to be acquired, the current draft of the acquisition agreement
and historical financial statements with respect to the business or
Person to be acquired as delivered to the Company; and (z) pro forma
financial statements for the Company and its Subsidiaries for the
immediately preceding and following four-fiscal quarter period
demonstrating compliance on a pro forma basis with the financial
covenants applicable during such periods pursuant to subsection 7.6
and adjustments made to the Borrowing Base Amount in accordance with
Schedule 1.1(i).
---------------
(xiv) any Permitted Foreign Subsidiary of Company may be merged with
or into any wholly-owned Permitted Foreign Subsidiary, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to any wholly-owned
Permitted Foreign Subsidiary; provided that (i) in the case of such a
--------
merger, such wholly-owned Permitted Foreign Subsidiary shall be the
continuing or surviving corporation and (ii) in each case, the stock of
such wholly-owned Permitted Foreign Subsidiary is pledged pursuant to, and
to the extent required under, the Collateral Documents;
(xv) Holdings or its Subsidiaries may sell or issue equity interests
of the Company or any of its Subsidiaries to Holdings, the General Partner
or any of their Subsidiaries;
(xvi) Holdings and its Subsidiaries may consummate the
Recapitalization Transactions; and
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(xvii) Holdings may issue Common Units, the Preferred Units and
Qualified Preferred Units to the extent not otherwise prohibited under the
provisions of this Agreement.
7.8 FISCAL YEAR
-----------
Holdings and Company shall not change their Fiscal Year-end from December
31.
7.9 SALES AND LEASE-BACKS.
---------------------
Except with respect to Permitted Sale Leaseback Transaction, Company shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any property
(whether real, personal or mixed), whether now owned or hereafter acquired, (i)
which Company or any of its Subsidiaries has sold or transferred or is to sell
or transfer to any other Person (other than Holdings or any of its Subsidiaries)
or (ii) which Company or any of its Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by Company or any of its Subsidiaries to any Person (other
than Holdings or any of its Subsidiaries) in connection with such lease.
7.1 SALE OR DISCOUNT OF RECEIVABLES.
-------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable;
provided, however, that Company and its Subsidiaries may, in the exercise of
- -------- -------
their reasonable business judgment in connection with efforts to collect amounts
owed thereunder, discount or sell (to the extent permitted under subsection
7.7(vi) for less than the face value thereof any accounts receivable.
7.1 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
---------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Holdings or with any Affiliate of Holdings or of any such holder, on terms that
are less favorable to Holdings or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided that the foregoing restriction shall not apply to (i) any
--------
transaction between Holdings and any of its Subsidiaries or between any of its
Subsidiaries, (ii) any payment from Company to Holdings and the General Partner
expressly permitted under subsection 7.5 and any payment by Holdings permitted
under subsection 7.5, (iii) the payment of Bain Management Fees under the Bain
Advisory Services Agreement, (iv) any employment agreement entered into by
Holdings or any of its Subsidiaries in the ordinary course of business, (v) any
issuance of Common Units or Preferred Units or Qualified Preferred Units in
connection with employment arrangements, stock options and stock ownership plans
of Holdings or any of its Subsidiaries entered into in the ordinary course of
business and the performance of obligations thereunder, (vi) any of the
Recapitalization Transactions, (vii) reasonable and customary
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fees, expenses and indemnities paid to members of the Boards of Directors or
Board of Managers, as the case may be, of Holdings and its Subsidiaries, (viii)
the performance of obligations under the Related Agreements, or (ix)
transactions with Ray Anthony; provided that any amounts received by Ray Anthony
--------
pursuant to this clause (ix) in excess of salary and other compensation
contractually due to him from Company shall not exceed $50,000 in any Fiscal
Year.
7.1 DISPOSAL OF SUBSIDIARY INTERESTS.
--------------------------------
Except as required under the Collateral Documents and except for any sale
of 100% of the capital stock, partnership interests or other equity Securities
of any of its Subsidiaries in compliance with the provisions of subsection
7.7(vi), Holdings shall not:
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock, partnership interests or other
equity Securities of any of its Subsidiaries, except to qualify directors
if required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock, partnership interests or other equity Securities of any of its
Subsidiaries (including such Subsidiary), except to Company, another
Subsidiary of Holdings (subject to the restrictions on such disposition
otherwise imposed hereinunder), or to qualify directors if required by
applicable law.
7.1 CONDUCT OF BUSINESS.
-------------------
From and after the Closing Date, Company shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by Company and its Subsidiaries on the Closing Date and similar or
related or supportive businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders. Neither Holdings nor General Partner shall
engage in any business or have any assets (including Intellectual Property)
other than (i) owning partnership interests of Company, or equity interests of
Anthony Crane Holdings Capital Corporation, (ii) with respect to Holdings and
the General Partner the issuance of and activities related to the maintenance
and servicing of Shareholder Subordinated Notes, Permitted Seller Notes, the
Senior Discount Debentures, other debt and guaranty obligations permitted to be
incurred hereunder and the partnership or equivalent equity interests of
Holdings as permitted hereunder, (iii) with respect to Holdings and the General
Partner the entering into, and the performance of its obligations under, the
Pledge and Security Agreement, the Related Agreements to which it is a party,
the Bain Advisory Services Agreement and the Term Loan Credit Documents to which
it is a party, (iv) the receipt of Cash distributions from Company in accordance
with the provisions hereof, and (v) activities associated with expenses paid
with any dividends paid to Holdings or the General Partner which are permitted
under subsection 7.5. Notwithstanding the foregoing, Holdings and the General
Partner may engage in activities incidental to (a) the maintenance of its
existence in compliance with applicable law, (b) legal, tax and accounting
matters in connection with any of the foregoing activities and (c) entering
into, and performing its obligations under, this Agreement and the Loan
Documents to which it is a party.
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7.1 AMENDMENTS OR WAIVERS OF CERTAIN AGREEMENTS; AMENDMENTS OF DOCUMENTS
--------------------------------------------------------------------
RELATING TO SUBORDINATED INDEBTEDNESS AND SENIOR NOTES; DESIGNATION OF
- ----------------------------------------------------------------------
"DESIGNATED SENIOR DEBT".
- ------------------------
A. AMENDMENTS OR WAIVERS OF CERTAIN AGREEMENTS. None of Holdings,
Company nor any of their respective Subsidiaries will agree to any amendment to,
or waive any of its rights under, the Bain Advisory Services Agreement or any
Related Agreement (other than any Related Agreement evidencing or governing the
Senior Notes and any other Subordinated Indebtedness) after the Closing Date if
any such amendment or waiver would, individually or in the aggregate, reasonably
be expected to be materially adverse to Lenders without in each case obtaining
the prior written consent of Requisite Lenders to such amendment or waiver.
B. AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS OR
SENIOR NOTES. Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, amend or otherwise change the terms of any
Subordinated Indebtedness or Senior Notes, or make any payment consistent with
an amendment thereof or change thereto, if the effect of such amendment or
change is to increase the interest rate on such Subordinated Indebtedness or
Senior Notes, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions of such Subordinated Indebtedness or any guaranty of
any Subordinated Indebtedness or Senior Notes), or if the effect of such
amendment or change, together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Subordinated Indebtedness (or a trustee
or other representative on their behalf) which would be materially adverse to
Holdings, Company or Lenders.
C. AMENDMENTS OF TERM LOAN CREDIT DOCUMENTS. Holdings and Company shall
not, and shall not permit any of their respective Subsidiaries to, amend or
otherwise change the terms of any of the Term Loan Credit Documents, or make any
payment consistent with an amendment thereof or a change thereto, that would
have the effect of (i) changing (to earlier dates) any dates upon which payments
of principal or interest are due on the Term Loans, (ii) reducing the percentage
specified in the definition of "Requisite Lenders" in the Term Loan Credit
Agreement, or (iii) changing the prepayment provisions of the Term Loan Credit
Agreement in a manner that disproportionately disadvantages the Lenders relative
to the lenders under the Term Loan Credit Agreement or confers additional rights
on the lenders under the Term Loan Credit Agreement which would be adverse to
Lenders, without the prior written consent of Requisite Lenders under this
Agreement.
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SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT") shall
occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
---------------------------------
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within three Business
Days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
---------------------------
(i) Failure of Holdings or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $5,000,000
or more or with an aggregate principal amount of $10,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent Obligations
in the individual or aggregate principal amounts referred to in clause (i) above
or (b) any loan agreement, mortgage, indenture or other agreement relating to
such item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
---------------------------
Failure of Holdings or Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement;
provided, however, that such failure with respect to the covenants contained in
- -------- -------
subsections 7.1, 7.2, 7.3 and 7.4 shall not constitute an Event of Default for
ten days after such failure so long as Company is diligently pursuing the cure
of such failure; or
8.4 BREACH OF WARRANTY.
------------------
Any representation, warranty, certification or other statement made by any
Loan Party in any Loan Document or in any statement or certificate at any time
given by any Loan Party in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false in any material respect on the date as of
which made; or
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8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Holdings, Company or such Loan Party becoming aware of such
default or (ii) receipt by Holdings, Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
-----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Holdings or any of its Subsidiaries (other than
Excluded Subsidiaries) in an involuntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against Holdings or any of its Subsidiaries (other than
Excluded Subsidiaries) under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Holdings or any of its Subsidiaries (other than Excluded
Subsidiaries), or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of Holdings or any of its
Subsidiaries (other than Excluded Subsidiaries) for all or a substantial part of
its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Holdings or any
of its Subsidiaries (other than Excluded Subsidiaries), and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
---------------------------------------------------
(i) Holdings or any of its Subsidiaries (other than Excluded Subsidiaries)
shall have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Holdings or
any of its Subsidiaries (other than Excluded Subsidiaries) shall make any
assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries (other than Excluded Subsidiaries) shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Holdings or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
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8.8 JUDGMENTS AND ATTACHMENTS.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5,000,000 or (ii)
in the aggregate at any time an amount in excess of $10,000,000 (in either case
not adequately covered by insurance from a solvent and unaffiliated insurance
company) shall be entered or filed against Holdings or any of its Subsidiaries
or any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days (or in any event later than five
days prior to the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
-----------
Any order, judgment or decree shall be entered against Holdings or any of
its Subsidiaries (other than an Excluded Subsidiary) decreeing the dissolution
or split up of Holdings or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
----------------------
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Holdings or any of its Subsidiaries in excess of $7,500,000 during the term of
this Agreement; or
8.11 CHANGE IN CONTROL.
-----------------
(i) Holdings shall cease to own and control 100% of the limited
partnership interests of Company, or General Partner shall cease to own and
control 100% of the general partnership interests of Company; (ii) prior to an
initial public offering by Holdings and General Partner (or any successor
pursuant to subsection ___,) Bain Investors shall cease, directly or indirectly,
to exercise the right to determine and control all matters with respect to which
any stockholders or partners of General Partner or Holdings are entitled to
determine or control, (iii) Bain Investors shall cease to beneficially own,
directly or indirectly, 71% of the economic interests of Holdings or General
Partner owned by Bain Investors on Closing Date; (iv) after an initial public
offering of Holdings and General Partner (or any successor thereto pursuant to
subsection ____,) any Person (other than Bain Investors) shall (y) have a
greater economic or voting interest in Holdings or General Partner (or any
successor thereto pursuant to subsection ___) than Bain Investor's economic or
voting interest in Holdings or General Partner (or any successor thereto
pursuant to subsection ___), or (z) own or control more than 30% of the economic
or voting interest of Holdings or General Partner (or any successor thereto
pursuant to subsection ___); or (v) any "Change of Control" shall occur under
the Senior Notes.
8.12 INVALIDITY OF GUARANTIES; FAILURE OF SECURITY; REPUDIATION OF OBLIGATIONS.
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At any time after the execution and delivery thereof, (i) any Guaranty for
any reason, other than the satisfaction in full of all Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen and are not yet due and payable),
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shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void, (ii) any Collateral Document
shall cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered thereby and required to be perfected or having a fair market value,
individually or in the aggregate, exceeding $2,000,000, in each case for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party; or
8.13 FAILURE TO CONSUMMATE RECAPITALIZATION.
--------------------------------------
The Recapitalization Transactions contemplated to occur on the Closing Date
shall not be consummated in accordance with this Agreement and the applicable
Related Agreements on the Closing Date, or the Recapitalization Transactions
shall be unwound, reversed or otherwise rescinded in whole or in part for any
reason:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Holdings and Company, and the obligation of each Lender to make any
Loan, the obligation of Administrative Agent to issue any Letter of Credit and
the right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request or with
the written consent of Requisite Lenders, by written notice to Company, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
--------
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Intercreditor Agreement and shall be applied as therein provided.
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Notwithstanding anything contained in the second preceding paragraph, if at
any time within 60 days after an acceleration of the Loans pursuant to clause
(ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than non-
payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Holdings or Company, and such provisions
shall not at any time be construed so as to grant Holdings or Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 APPOINTMENT.
-----------
A. APPOINTMENT OF AGENTS. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms of this Agreement and the other Loan
Documents. Fleet is hereby appointed Administrative Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes Administrative Agent
to act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. DLJ is hereby appointed Documentation Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes Documentation Agent
to act as its agent in accordance with the terms of this Agreement and the
other Loan Documents. Each Lender hereby authorizes and confirms the
appointment by Administrative Agent of Fleet as Collateral Agent under the
Intercreditor Agreement and the other Loan Documents, and each Lender hereby
authorizes Collateral Agent to act as its agent in accordance with the terms of
the Intercreditor Agreement and the other Loan Documents. Each Agent hereby
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Agents and Lenders and Company shall have no rights as
a third party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, each Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Holdings or
any of its Subsidiaries. Each of Syndication Agent and Documentation Agent,
without consent of or notice to any party hereto, may assign any and all of its
rights or obligations hereunder to any of its Affiliates. As of the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments, all obligations of GSCP, in its
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capacity as Syndication Agent hereunder, shall terminate. DLJ, in its capacity
as Documentation Agent, shall have no obligations hereunder.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction it may not exercise any
of the rights, powers or remedies granted herein or in any of the other Loan
Documents or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that Administrative Agent appoint an
additional individual or institution as a separate trustee, co-trustee,
collateral agent or collateral co-agent (any such additional individual or
institution being referred to herein individually as a "SUPPLEMENTAL COLLATERAL
AGENT" and collectively as "SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Administrative Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Loan
Documents to be exercised by or vested in or conveyed to Administrative Agent
with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by such
Supplemental Collateral Agent shall run to and be enforceable by either
Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Holdings, Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Holdings or Company shall,
or shall cause such Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
-----------------------------------
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms
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hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Each Agent may exercise such powers, rights and remedies and
perform such duties by or through its agents or employees. No Agent shall have,
by reason of this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon any Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any of Agent to Lenders or by or on behalf of
Holdings or Company to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Holdings or Company or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
C. EXCULPATORY PROVISIONS. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent, in the case of any Agent other than the Administrative
Agent, shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) or, in the case of the Administrative Agent, in
accordance with the Intercreditor Agreement, and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be)
or in accordance with the Intercreditor Agreement, as the case may be, such
Agent shall be entitled to act or (where so instructed) refrain from acting, or
to exercise such power, discretion or authority, in accordance with such
instructions. Without prejudice to the generality of the foregoing, (i) each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Holdings and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so
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instructed) refraining from acting under this Agreement or any of the other Loan
Documents, in the case of any Agent other than the Administrative Agent, in
accordance with the instructions of Requisite Lenders (or such other Lenders as
may be required to give such instructions under subsection 10.6) or, in the case
of the Administrative Agent, in accordance with the Intercreditor Agreement.
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Holdings, Company or any of their
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Holdings and Company for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
------------------------------------------------------------------
CREDITWORTHINESS.
- ----------------
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Holdings and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 RIGHT TO INDEMNITY.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company or Holdings, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Loan Documents or otherwise in its capacity
as such Agent in any way relating to or arising out of this Agreement or the
other Loan Documents; provided that no Lender shall be liable for any portion of
--------
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct. If any indemnity furnished to any Agent for
any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided that in no event shall this
--------
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sentence require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement in excess of such Lender's Pro Rata Share thereof; and provided,
--------
further, that this sentence shall not be deemed to require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement described in the proviso
to the immediately preceding sentence.
9.5 SUCCESSOR ADMINISTRATIVE AGENT AND SWING LINE LENDER.
----------------------------------------------------
A. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company,
and Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent with the consent of Company (which consent shall not be unreasonably
withheld). Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent and the
retiring or removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of ____ or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Agent in its capacity as Swing
Line Lender, (ii) upon such prepayment, the retiring or removed Administrative
Agent and Swing Line Lender shall surrender any Swing Line Note held by it to
Company for cancellation, and (iii) if so requested by the successor
Administrative Agent and Swing Line Lender in accordance with subsection 2.1E,
Company shall issue a new Swing Line Note to the successor Administrative Agent
and Swing Line Lender substantially in the form of Exhibit VIII annexed hereto,
------------
in the principal amount of the Swing Line Loan Commitment then in effect and
with other appropriate insertions.
C. ADMINISTRATIVE AGENT UNDER TERM LOAN CREDIT AGREEMENT. Any
resignation or removal of Administrative Agent pursuant to subsection 9.5A shall
also constitute the resignation or removal of Fleet for all purposes hereunder
and under the Term Loan Credit Agreement.
9.6 COLLATERAL DOCUMENTS AND GUARANTY.
---------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders, to enter into the Intercreditor Agreement, and
each Lender agrees to be bound by the terms of the Intercreditor Agreement;
provided that Administrative Agent shall not enter into or consent to any
- --------
material amendment, modification, termination or waiver of the Intercreditor
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Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6). Each
Lender hereby further authorizes Administrative Agent (and under the terms of
the Intercreditor Agreement Administrative Agent is authorized), on behalf of
and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of the Lenders under
the Guaranties, and each Lender agrees to be bound by the terms of each
Collateral Document and each Guaranty; provided that Collateral Agent shall not
--------
enter into or consent to any material amendment, modification, termination or
waiver of the Intercreditor Agreement without the prior consent of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) ; provided further, however, that, without further
-------- ------- -------
written consent or authorization from Lenders, Collateral Agent may execute any
documents or instruments necessary to (a) release any Lien encumbering any item
of Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or as permitted or required under the Intercreditor
Agreement or the Collateral Documents or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under subsection 10.6)
have otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary Guarantor is
sold to any Person pursuant to a sale or other disposition permitted hereunder
or as permitted under the Intercreditor Agreement or to which Requisite Lenders
(or such other Lenders as may be required to give such consent under subsection
10.6) have otherwise consented; provided, however, that nothing in this
-------- -------
subsection shall require consent to release from the Subsidiary Guaranty any
Person which, immediately after such sale, shall be a Subsidiary of Holdings
which is obligated to and will enter into the Subsidiary Guaranty. Anything
contained in any of the Loan Documents to the contrary notwithstanding, Company,
Administrative Agent, Collateral Agent and each Lender hereby agree that (X) no
Lender shall have any right individually to realize upon any of the Collateral
under any Collateral Document or to enforce the Subsidiary Guaranty, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents and the Guaranties may be exercised solely by Collateral Agent for the
benefit of Secured Parties in accordance with the terms thereof, and (Y) in the
event of a foreclosure by Collateral Agent on any of the Collateral pursuant to
a public or private sale, Collateral Agent or any Secured Party may be the
purchaser of any or all of such Collateral at any such sale and Collateral
Agent, as agent for and representative of Secured Parties (but not any Secured
Party or Secured Parties in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Collateral Agent at such sale.
SECTION 10.
MISCELLANEOUS
10. ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
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A. GENERAL. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
any Loan or Loans made by it or its Letters of Credit or
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participations therein or any other interest herein or in any other Obligations
owed to it; provided that no such sale, assignment, transfer or participation
--------
shall, without the consent of Company, require Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws of any
state; provided, further that no such sale, assignment or transfer described in
--------
clause (i) above shall be effective unless and until an Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii); provided, further that no such sale, assignment, transfer or
-------- -------
participation of any Letter of Credit or any participation therein may be made
separately from a sale, assignment, transfer or participation of a corresponding
interest in the Revolving Loan Commitment and the Revolving Loans of the Lender
effecting such sale, assignment, transfer or participation; and provided,
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further that, anything contained herein to the contrary notwithstanding, the
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Swing Line Loan Commitment and the Swing Line Loans of Swing Line Lender may not
be sold, assigned or transferred as described in clause (i) above to any Person
other than a successor Administrative Agent and Swing Line Lender to the extent
contemplated by subsection 9.5. Except as otherwise provided in this subsection
10.1, no Lender shall, as between Company and such Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment or transfer of, or
any granting of participations in, all or any part of its Commitments or the
Loans, the Letters of Credit or participations therein, or the other Obligations
owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
--------------------------------
of Credit or participation therein, or other Obligation may (a) be assigned
in any amount to another Lender, or to an Affiliate of the assigning Lender
or another Lender, with the giving of notice to Company and Administrative
Agent, or (b) be assigned in an aggregate amount of not less than
$5,000,000 (or such lesser amount as shall constitute the aggregate amount
of the Commitments, Loans, Letters of Credit and participations therein,
and other Obligations of the assigning Lender and its Affiliates) to any
other Eligible Assignee with the consent of Company and Administrative
Agent (which consent of Company and Administrative Agent shall not be
unreasonably withheld or delayed); provided that, unless otherwise agreed
--------
to in writing by Company and Administrative Agent, the assigning Lender
shall have, immediately after giving effect to such assignment, not less
than an aggregate amount of $5,000,000 in Commitments, Loans and Letter of
Credit; and provided further, however, that (x) upon the occurrence and
-------- ------- -------
during the continuance of an Event of Default, or (y) in the case of
assignments by GSCP, Fleet or DLJ, assignments may be made without the
consent of Company or Administrative Agent, upon the giving of notice to
Company and Administrative Agent. To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender shall
be relieved of its obligations with respect to its Commitments, Loans,
Letters of Credit or participations therein, or other Obligations or the
portion thereof so assigned. The parties to each such assignment shall
execute and deliver to Administrative Agent, for its acceptance and
recording in the Register, an Assignment Agreement, together with a
processing and recordation fee of $500 in the case of assignments pursuant
to clause (a) above and assignments by GSCP or Fleet, and $2000 in the case
of all other assignments and such forms, certificates or other evidence, if
any, with respect to United States federal income tax withholding matters
as the assignee under
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such Assignment Agreement may be required to deliver to Administrative
Agent and the Company pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) 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
Agreement, shall have the rights and obligations of a Lender hereunder and
(z) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination of this Agreement under subsection 10.9B) and be released from
its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto; provided that, anything contained in any of the
--------
Loan Documents to the contrary notwithstanding, if such Lender is the
Issuing Lender with respect to any outstanding Letters of Credit such
Lender shall continue to have all rights and obligations of an Issuing
Lender with respect to such Letters of Credit until the cancellation or
expiration of such Letters of Credit and the reimbursement of any amounts
drawn thereunder). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance of
any Notes hereunder, the assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the assignee and/or the
assigning Lenders in accordance with Subsection 2.1E, be issued to the
assignee and/or to the assigning Lender, substantially in the form of
Exhibit IV or Exhibit V annexed hereto, as the case may be, with
---------- ---------
appropriate insertions, to reflect the new Commitments, as the case may be,
of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
-----------------------------------------------------------
Upon its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together with
the processing and recordation fee referred to in subsection 10.1B(i) and
any forms, certificates or other evidence with respect to United States
federal income tax withholding matters that such assignee may be required
to deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a),
Administrative Agent shall, if Administrative Agent has and Company have
consented to the assignment evidenced thereby (in each case to the extent
such consent is required pursuant to subsection 10.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of Administrative
Agent to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation (ii) a reduction of the principal amount of
or the rate
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of interest or fees payable on any Loan allocated to such participation, and all
amounts payable by Company hereunder (including amounts payable to such Lender
pursuant to subsections 2.6D, 2.7 and 3.6) or (iii) a release of all or
substantially all of the Collateral shall be determined as if such Lender had
not sold such participation. Company and each Lender hereby acknowledge and
agree that, solely for purposes of subsections 10.4 and 10.5, (a) any
participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS AND FUND TRUSTEES. In addition
to the assignments and participations permitted under the foregoing provisions
of this subsection 10.1, any Lender may assign and pledge all or any portion of
its Loans, the other Obligations owed to such Lender, and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and with the consent of Company and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its Notes or Loans to its trustee in support of its obligations
to such trustee; provided that (i) no Lender shall, as between Company and such
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Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank or
trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (a) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 EXPENSES.
--------
Whether or not the transactions contemplated hereby are consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents and any consents, amendments
(requested by or for the benefit of Company), waivers or other modifications
thereto; (ii) all the costs of furnishing all opinions by counsel for Company
(including any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Syndication Agent (in each case
including allocated costs of internal counsel) in connection with the
negotiation, preparation and execution
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of the Loan Documents and of the Administrative Agent in connection with any
consents, amendments (requested by or for the benefit of Company), waivers or
other modifications thereto and any other documents or matters requested by
Company; (iv) all the reasonable costs and reasonable expenses of creating and
perfecting Liens in favor of Administrative Agent on behalf of Lenders pursuant
to any Collateral Document, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to Agents and to
Administrative Agent and of counsel providing any opinions that Agents,
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the
reasonable costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Administrative Agent and its counsel) of obtaining and reviewing any appraisals
provided for under subsection 6.9C, any environmental audits or reports provided
for under subsection 4.1K or 6.9B(ix) and any audits or reports provided for
under subsection 6.5B with respect to Inventory and accounts receivable of
Holdings and its Subsidiaries; (vi) all the reasonable costs and reasonable
expenses (including the reasonable fees, expenses and disbursements of any
consultants, advisors and agents employed or retained by Administrative Agent
and its counsel) in connection with the administration of the Loan Documents,
and the custody or preservation of any of the Collateral as may separately be
agreed to between the Administrative Agent and Company; (vii) all other
reasonable costs and expenses incurred by any of the Agents in connection with
the syndication of the Commitments and the negotiation, preparation and
execution of the Loan Documents and any consents, amendments (requested by or
for the benefit of Company), waivers or other modifications thereto and the
transactions contemplated thereby; and (viii) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by any of the Agents or the Administrative Agents and Lenders in
enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such Event of
Default (including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Guaranties) or
in connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
---------
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby are consummated, Company
agrees to defend (subject to Indemnitees' selection of counsel), indemnify, pay
and hold harmless Agents (including Administrative Agent) and Lenders, and the
officers, partners, directors, trustees, employees, agents and affiliates of any
of Agents (including Administrative Agent) and Lenders (collectively called the
"INDEMNITEES"), from and against any and all Indemnified Liabilities (as
hereinafter defined); provided that Company shall not have any obligation to any
--------
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise from the gross negligence, bad faith or
willful misconduct of that Indemnitee as determined by a final, non-appealable
judgment of a court of competent jurisdiction.
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As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened
by any Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto, and any fees or expenses incurred by Indemnitees
in enforcing this indemnity), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of (i) this
Agreement or the other Loan Documents or the Related Agreements or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranties)), (ii) the statements contained in the commitment
letter executed by any Lender and the Company with respect thereto, or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Holdings or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of Default each Lender is hereby authorized by
Company at any time or from time to time subject to the consent of
Administrative Agent, without notice to Company or to any other Person (other
than Administrative Agent), any such notice being hereby expressly waived, to
set off and to appropriate and to apply any and all deposits (general or
special, including Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts or payroll accounts) and
any other Indebtedness at any time held or owing by that Lender to or for the
credit or the account of Company against and on account of the obligations and
liabilities of Company which are then due and payable to that Lender under this
Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Loan Document, irrespective of whether or not that Lender shall
have made any demand hereunder which are then due and payable. Company hereby
further grants to
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Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
Company, the Lenders and Administrative Agent hereby acknowledge and agree
that the provisions of this subsection 10.4 are subject to the provisions of the
Intercreditor Agreement. To the extent that any Lender is required pursuant to
the provisions of the Intercreditor Agreement to turn over to the Administrative
Agent any payments otherwise subject to the provisions of this subsection 10.4,
such payments shall not be subject to the provisions of this subsection 10.4.
10.5 RATABLE SHARING.
---------------
Lenders hereby agree among themselves that if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of Loans made and
applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
--------
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
Company, the Lenders and Administrative Agent hereby acknowledge and agree
that the provisions of this subsection 10.5 are subject to the provisions of the
Intercreditor Agreement. To the extent that any Lender is required pursuant to
the provisions of the Intercreditor Agreement to turn over to the Administrative
Agent any payments otherwise subject to the provisions of this subsection 10.5,
such payments shall not be subject to the provisions of this subsection 10.5.
10.6 AMENDMENTS AND WAIVERS.
----------------------
A. No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Company therefrom, shall in
any event be effective
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without the written concurrence of Requisite Lenders; provided that no such
--------
amendment, modification, termination, waiver or consent shall, without the
consent of each Lender (with Obligations directly affected in the case of the
following clause (i)): (i) extend the scheduled final maturity of any Loan or
Note, or extend the stated expiration date of any Letter of Credit beyond the
Revolving Loan Commitment Termination Date, or reduce the rate of interest on
any Loan (other than any waiver of any increase in the interest rate applicable
to any Loan pursuant to subsection 2.2E; it being understood that modification
to the financial definitions herein shall not constitute a reduction of the rate
of interest for the purposes of this subsection 10.6) or any commitment fees or
letter of credit fees payable hereunder, or extend the time for payment of any
such interest or fees, or reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit, (ii) amend, modify,
terminate or waive any provision of this subsection 10.6, (iii) reduce the
percentage specified in the definition of "Requisite Lenders" (it being
understood that, with the consent of Requisite Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determination of
"Requisite Lenders" on substantially the same basis as the Revolving Loan
Commitments and the Revolving Loans are included on the Closing Date), (iv)
release all or substantially all of the Collateral or Holdings from the Holdings
Guaranty or all or substantially all of the Subsidiary Guarantors from the
Subsidiary Guaranty except as expressly provided in the Loan Documents, or (v)
consent to the assignment or transfer by Company of any of its rights and
obligations under this Agreement; provided, further that no such amendment,
-------- -------
modification, termination or waiver shall (1) increase the Commitments of any
Lender over the amount thereof then in effect, or extend the duration thereof,
without the consent of such Lender (it being understood that no amendment,
modification or waiver of any condition precedent, covenant, Potential Event of
Default or Event of Default shall constitute an increase or extension in the
Commitment of any Lender, and that no increase in the available portion of any
Commitment of any Lender shall constitute an increase in such Commitment of such
Lender); (2) amend, modify, terminate or waive any provision of subsection
2.1A(ii) or any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans without the consent of Swing Line
Lender; (3) amend, modify, terminate or waive any obligation of Lenders relating
to the purchase of participations in Letters of Credit as provided in subsection
3.1C without the written concurrence of Administrative Agent and of each Issuing
Lender which has a Letter of Credit then outstanding or which has not been
reimbursed for a drawing under a Letter of Credit issued it; or (4) amend,
modify, terminate or waive any provision of Section 9 or 10 as the same applies
to any Agent (including the Administrative Agent), or any other provision of
this Agreement as the same applies to the rights or obligations of any Agent
(including the Administrative Agent), in each case without the consent of such
Agent (including the Administrative Agent).
B. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on Company.
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10.7 INDEPENDENCE OF COVENANTS.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Syndication Agent or
--------
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Holdings, Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company and Holdings set forth in subsections 2.6D,
2.7, 3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
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10.11 MARSHALLING; PAYMENTS SET ASIDE.
-------------------------------
None of Administrative Agent, Administrative Agent or any Lender shall be
under any obligation to marshal any assets in favor of Company or any other
party or against or in payment of any or all of the Obligations. To the extent
that Company makes a payment or payments to Administrative Agent, Administrative
Agent, or Lenders (or to Administrative Agent for the benefit of Lenders), or
Administrative Agent or Lenders enforce any security interests or exercise their
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
------------
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 HEADINGS.
--------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW
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OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Holdings' nor Company's rights or obligations hereunder nor any interest therein
may be assigned or delegated by Holdings or Company without the prior written
consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY OR HOLDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY AND HOLDINGS, FOR THEMSELVES AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPT GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVE ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO HOLDINGS AND COMPANY AT THEIR ADDRESSES PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREE THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREE THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
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10.18 WAIVER OF JURY TRIAL.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 CONFIDENTIALITY.
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with prudent lending or investing practices, it being understood and
agreed by Company and Holdings that in any event a Lender may make disclosures
to Affiliates of such Lender or disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participations therein
or by any direct or indirect contractual counterparties (or the professional
advisors thereto) in swap agreements (provided that such counterparties and
--------
advisors are advised of and agree to be bound by the provisions of this
subsection 10.19) or disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
- --------
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall any Lender be
-------- -------
obligated or required to return any materials furnished by Holdings or any of
its Subsidiaries.
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10.20 COUNTERPARTS; EFFECTIVENESS.
---------------------------
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
148
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
ANTHONY CRANE RENTAL, L.P.
By: /s/ David W. Mahokey
-----------------------------
Name: David W. Mahokey
Title: Vice President
HOLDINGS:
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: /s/ David W. Mahokey
-----------------------------
Name: David W. Mahokey
Title: Vice President
Notice Address:
1165 Camp Hollow Road
-----------------------------------
West Mifflin, PA 15122
-----------------------------------
Telephone: (412) 469-3700
--------------
Telecopy: (412) 469-0691
--------------
with a copy to:
Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Paige Daly
Telephone: (617) 572-3261
Facsimile: (617) 572-3274
and:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Chris Butler
Telephone: (312) 861-2298
Facsimile: (312) 861-2200
S-1
<PAGE>
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Christopher Butler
Telephone: (312) 861-2298
Facsimile: (312) 861-2200
S-2
<PAGE>
AGENTS AND LENDERS:
GOLDMAN SACHS CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By: /s/
------------------------------------
Authorized Signatory
Notice Address:
Goldman Sachs Credit Partners L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Tracey McCaffrey
-----------------
Telephone: (212) 902-1040
-----------------
Telecopy: (212) 357-4597
-----------------
S-3
<PAGE>
FLEET NATIONAL BANK,
individually and as Administrative Agent
By: /s/ Guy Smith
-------------------------------
Name:Guy Smith
Title:
Notice Address:
Fleet National Bank
One Federal Street MA/OF/OFC
Boston, Massachusetts 02110
Attention: Timothy Callahan
----------------
Telephone: (617) 346-0339
----------------
Telecopy: (617) 346-5833
----------------
with a copy to:
Fleet National Bank
One Federal Street MA/OF/DO3C
Boston, Massachusetts 02110
Attention: Guy Smith/Mark Pelletier
------------------------
Telephone: (617) 346-0441
------------------------
Telecopy: (617) 346-4806
------------------------
S-4
<PAGE>
DLJ CAPITAL FUNDING, INC.,
individually and as Documentation Agent
By: /s/ Howard J. Phillips
-------------------------------------
Name: Howard J. Phillips
Title: Managing Director
Notice Address:
DLJ Capital Funding, Inc.
277 Park Ave.
------------------------------------
New York, NY 10172
------------------------------------
------------------------------------
Attention: Greg Biddle
--------------
Telephone: (212) 892-6142
--------------
Telecopy: (212) 892-6031
--------------
S-5
<PAGE>
SCHEDULE 1.1(I)
ADJUSTMENTS TO BORROWING BASE
-----------------------------
[TO BE PROVIDED]
Schedule 1.1(i) - 1
<PAGE>
SCHEDULE 1.1(II)
ADDBACKS TO EBITDA
------------------
Without duplication:
(i) Items classified as unusual or nonrecurring gains and losses (including
restructuring costs, severance and relocation costs, any one-time
expenses related to (or resulting from) any merger, recapitalization or
Permitted Acquisition);
(ii) Bain Management Fees (excluding any portion thereof representing
---------
reimbursement of expenses or fees for acquisitions, financings or
divestitures) paid during such period under the Bain Advisory Services
Agreement;
(iii) Unrealized gains or losses in respect of Interest Rate Agreements and
the related tax effects;
(iv) Unrealized gains or losses due solely to fluctuations in currency values
and the related tax effects;
(v) Any write-off of deferred financing costs incurred as a result of the
refinancing of the Indebtedness existing immediately prior to the
Closing Date;
(vi) Premiums, penalties and transaction costs in connection with the
refinancing of Indebtedness existing immediately prior to the Closing
Date;
(vii) All one-time cash compensation payments made in connection with the
Recapitalization Transactions and the transaction contemplated hereby
and the Related Agreements;
(viii) Non-recurring cash restructuring charges incurred in connection with the
Recapitalization Transactions and related transactions;
(ix) Non-recurring cash restructuring charges incurred in connection with any
Permitted Acquisition to the extent incurred within six months following
the consummation of such Permitted Acquisition and deducted in
determining Consolidated Net Income, not to exceed the actual historical
EBITDA of the New Business for the immediately preceding four-quarter
period;
(x) to the extent corresponding deductions are made in Consolidated Adjusted
EBITDA, indemnification payments received from third parties and not
otherwise included in the calculation of Consolidated Adjusted EBITDA;
and
(xi) All Transaction Costs.
Schedule 1.1(ii)-1
<PAGE>
EXHIBIT 10.5
[EXECUTION COPY]
SECURITYHOLDERS AGREEMENT
-------------------------
THIS SECURITYHOLDERS AGREEMENT (this "Agreement") is made as of July
---------
22, 1998, by and among Anthony Crane Rental Holdings, L.P., a Pennsylvania
limited partnership (the "Partnership"), ACR Management, L.L.C., a Delaware
-----------
limited liability company and the sole general partner of the Partnership (the
"General Partner") and each of the securityholders from time to time a party
- ----------------
hereto (the "Securityholders"). Capitalized terms used but not otherwise
---------------
defined herein are defined in Section 8 hereof or in the Partnership Agreement
referred to below.
The Partnership, the General Partner and the Securityholders desire to
enter into this Agreement for the purposes of, among others, inducing certain of
the Securityholders to enter into the Amended and Restated Agreement of Limited
Partnership of even date herewith, as amended or modified from time to time (the
"Partnership Agreement") and the Limited Liability Company Agreement of the
---------------------
General Partner of even date herewith, as amended from time to time (the "LLC
---
Agreement") and to restrict the sale, assignment, transfer, encumbrance or other
- ---------
disposition of the Securities.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement, intending to be legally
bound, hereby agree as follows:
1. Restrictions on Transfer of Securities.
--------------------------------------
(a) Transfer of Securities. No holder of Other Securities shall sell,
----------------------
transfer, assign, pledge or otherwise dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of
law) any interest in such holder's Securities (a "Transfer"), except
--------
pursuant to (i) Section 1(b) or 1(d) hereof, (ii) a Public Sale, (iii) a
Liquidity Event pursuant to Section 5, (iv) a repurchase pursuant to the
Executive Agreements or (v) the consent of the Board; provided that the
-------- ----
applicable requirements of Sections 2 and 3 (if any) are also satisfied.
(b) Participation Rights.
--------------------
(i) If one or more of the Bain Group (the "Transferring
------------
Securityholders") desires to Transfer all or any portion of any class
---------------
of its Securities to any Person(s), they must first deliver to all of
the other holders of such class of Securities (the "Other
-----
Securityholders") a written notice (the "Sale Notice") in which the
--------------- -----------
prospective Transferring Securityholders state the price and other
material terms and conditions on which they propose to effect such
Transfer of Securities, or portion thereof, and the identity of the
proposed Transferee(s). For purposes of this Section 1(b), a Transfer
by the Bain Group shall include a transfer by the holders of the
equity securities of the Bain Group and a transfer of any securities
which has the economic effect of a Transfer of the equity securities
of the Bain Group and such transfers will be deemed to be a Transfer
by the Bain Group for purposes of determining the rights of Other
Securityholders
<PAGE>
under this Section 1(b). Each Other Securityholder to whom such a Sale
Notice is given may within 15 days following receipt of the Sale
Notice, give to the Partnership, the General Partner and the
Transferring Securityholders a written notice ("Tag-Along Notice")
----------------
indicating that it desires to participate in such Transfer. If any
Other Securityholders have elected to participate in such Transfer,
each of the Transferring Securityholders and such Other
Securityholders will be entitled to sell in the contemplated Transfer,
at the same price and on the same terms and conditions, a number of
Securities of such class equal to the product of (A) the quotient
determined by dividing the number of Securities of such class owned by
such person by the aggregate number of Securities of such class owned
by the Transferring Securityholders and the Other Securityholders
participating in such Transfer and (B) the number of Securities of
such class to be sold in the contemplated Transfer (the "Pro Rata
--------
Share"). Notwithstanding the foregoing, in the event that the
-----
Transferring Securityholders intend to Transfer more than one class of
Securities, the Other Securityholders participating in such Transfer
shall be required to sell in the contemplated Transfer a pro rata
portion of all such classes of Securities (to the extent such Other
Securityholders own any such other classes of Securities), which
portion shall be determined in the manner set forth immediately above.
For example (by way of illustration only), if the Sale Notice
-----------------------------------------
contemplated a sale of 100 Class A Common Units by the
Transferring Securityholders, and if the Transferring
Securityholders at such time owns 30% of the Class A Common Units
and if one Other Securityholder elects to participate and owns
20% of the Class A Common Units, the Transferring Securityholders
would be entitled to sell 60 Class Common A Units (30% / 50% x
100 units) and the Other Securityholder would be entitled to sell
40 Class A Common Units (20% / 50% x 100 units).
(ii) The Transferring Securityholders will use reasonable efforts
to obtain the agreement of the prospective Transferee(s) to the
participation of the Other Securityholders in any contemplated
Transfer, and the Transferring Securityholders will not Transfer any
of their Securities to the prospective Transferee(s) unless (A)
simultaneously with such transfer, the prospective Transferee or
Transferees purchase from the Other Securityholders the Securities
which the Other Securityholders are entitled to sell to such
prospective Transferee(s) pursuant to paragraph 1(b)(i) above or (B)
simultaneously with such transfer, the Transferring Securityholders
purchase (on the same terms and conditions on which such Securities
were sold to the transferee(s)) the number of Securities of such class
from the Other Securityholders which the Other Securityholders would
have been entitled to sell pursuant to paragraph 1(b)(i) above.
2
<PAGE>
(c) Transfers by Certain Indirect Owners. Each holder of Other
------------------------------------
Securities that is not an individual shall not permit (i) the issuance of
additional interests in such holder or (ii) any Transfer of any interest of
any Indirect Owner in such holder. Notwithstanding the foregoing, any
Indirect Owner of such holder or of another Indirect Owner may Transfer its
interest in such holder or other Indirect Owner to another Indirect Owner
of a holder or to a Permitted Transferee or, provided that one or more
Permitted Transferees at all times controls such holder or Indirect Owner,
an interest in such holder or Indirect Owner may be transferred to a
charitable organization; provided that the restrictions contained in this
-------- ----
Section 1(c) will continue to apply to such securities following such
Transfer and the Permitted Transferees thereof will be required, prior to
the effectiveness of such Transfer, to execute a written agreement in form
and substance satisfactory to the Board pursuant to which such Permitted
Transferees acknowledge and agree to be bound by the Transfer restrictions
contained in this Agreement (including, without limitation, this Section
1(c)). To the extent such securities are certificated, the certificates
evidencing the equity securities of such holder and each Indirect Owner
will be stamped or otherwise imprinted with a legend referencing the
restrictions on transfer contained in this Section 1(c).
(d) Permitted Transfers. The restrictions contained in this Section 1
-------------------
shall not apply with respect to any Transfer of Securities (i) in the case
of any natural Person, pursuant to applicable laws of descent and
distribution or among such Person's Family Group (ii) in the case of any
other Person, among its Affiliates or (iii) to a Person each Indirect Owner
of which is a Permitted Transferee (transferees permitted pursuant to
clauses (i), (ii) and (iii) above are together referred to herein as
"Permitted Transferees"); provided that the restrictions contained in this
---------------------- -------- ----
Section 1 shall continue to be applicable to such Securities after any such
Transfer; and provided further that the applicable requirements specified
-------- -------
in Sections 2 and 3 in connection with such Transfer shall have been
satisfied. A Person's "Family Group" means such Person's (or if such
------------
Person is not an individual then such Person shall refer to the ultimate
individual beneficial owners of such Person) grandparents, spouse and
descendants (whether natural or adopted) of such grandparents and spouses
of any of them, and any trust or other entity or other vehicle formed
primarily for the benefit of such Person and/or any of such Person's spouse
and/or descendants. Notwithstanding the foregoing, no party hereto shall
avoid the provisions of this Agreement by making one or more transfers to
one or more Permitted Transferees and then disposing of all or any portion
of such party's interest in any such Permitted Transferee.
(e) Management Group Transfers. On or before December 31, 1998, the
--------------------------
Bain Group is specifically authorized to sell (or grant options to
purchase) to persons who are employees of or who have performed services
for the Partnership up to a 20% interest in the Common Units and a 20%
interest in the Membership Interests, at a purchase price equal to the cost
to the Bain Group of such interests on the date of this Agreement. The
participation rights set forth in paragraph (b) above shall not apply to
any Transfer of Securities described in this paragraph (e).
3
<PAGE>
(f) Termination of Restrictions. The restrictions set forth in this
---------------------------
Section 1 shall continue with respect to each Security until the earlier of
(i) the consummation of a Liquidity Event pursuant to Section 5 or (ii) the
consummation of an IPO. If the consummation of a Transfer pursuant to this
Section 1 would cause a Liquidity Event to occur, the provisions of Section
5 (as opposed to this Section 1) shall control such Transfer.
2. Additional Restrictions on Transfer.
-----------------------------------
(a) Restricted Securities Legend. The Securities have not been
----------------------------
registered under the Securities Act and, therefore, in addition to the
other restrictions on Transfer contained in this Agreement, cannot be sold
unless subsequently registered under the Securities Act or an exemption
from such registration is then available. To the extent such Securities
have been certificated, each certificate evidencing Securities and each
certificate issued in exchange for or upon the Transfer of any Securities
(if such securities remain Securities as defined herein after such
Transfer) shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON JULY 22, 1998 AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE SECURITYHOLDERS
AGREEMENT, DATED AS OF JULY 22, 1998, AS AMENDED AND MODIFIED FROM
TIME TO TIME, AMONG THE ISSUER (THE "PARTNERSHIP"), AND CERTAIN
INVESTORS, AND THE PARTNERSHIP RESERVES THE RIGHT TO REFUSE THE
TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED
WITH RESPECT TO ANY TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE
FURNISHED BY THE PARTNERSHIP TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE."
The Partnership and/or the General Partner shall imprint such legend on
certificates (if any) evidencing Securities. The legend set forth above shall
be removed from the certificates (if any) evidencing any Securities which cease
to be Securities in accordance with the definition thereof. Notwithstanding the
foregoing, to the extent the Securities are not certificated, the Partnership
Agreement will contain a legend in substantially the form stated above.
(b) Opinion of Counsel. No holder of Securities may Transfer any
------------------
Securities (except pursuant to an effective registration statement under
the Securities Act or to a
4
<PAGE>
Permitted Transferee or pursuant to Section 4 or 5 hereof) without first
delivering to the Partnership and the General Partner an opinion of counsel
(reasonably acceptable in form and substance to the Board) that neither
registration nor qualification under the Securities Act and applicable
state securities laws is required in connection with such Transfer.
(c) Transfers by the Bain Group. If any member of the Bain Group
---------------------------
sells any Common Units, or securities into which such Common Units are
reorganized (except for sales to Affiliates and sales to employees of the
Partnership), the Company shall contemporaneously redeem, or a member of
the Bain Group or an independent third party selected by the Bain Group
shall purchase, a corresponding percentage of the Partnership's outstanding
Class A Preferred Units (or preferred stock into which such Preferred Units
are reorganized upon an IPO), along with any accrued yield or dividends
thereon, which percentage shall be determined by dividing the number of
Common Units (or their equivalent) to be transferred by the Bain Group by
the aggregate number of Common Units (or their equivalent) owned by the
Bain Group as of the date hereof.
3. Transfer. Prior to Transferring any Securities (other than
--------
pursuant to a Liquidity Event pursuant to Section 5, a Public Sale or an IPO),
the Transferring Securityholder shall cause the prospective Transferee to be
bound by this Agreement, the Partnership Agreement (if the prospective
Transferee is admitted as a substituted partner under the Partnership
Agreement), the LLC Agreement (if the prospective Transferee is admitted as a
substituted partner under the Partnership Agreement), the Registration Agreement
and any other agreements executed by holders of Units and Membership Interests
relating to such Units and Membership Interests in the aggregate (collectively,
the "Other Agreements") and if the prospective Transferee is acquiring
----------------
Securities subject to an Executive Agreement, the provisions of such Executive
Agreement relating to equity securities, including the repurchase thereof, and
to execute and deliver to the Partnership, the General Partner and the other
holders of Securities counterparts of this Agreement, the Partnership Agreement
(if the Prospective Transferee is admitted as a substituted partner under the
Partnership Agreement), the LLC Agreement (if the Prospective Transferee is
admitted as a substituted member under the LLC Agreement), the Registration
Agreement, the applicable Other Agreements and if applicable an acknowledgment
as to the provisions of such Executive Agreement relating to equity securities.
Any Transfer or attempted Transfer of any Securities in violation of any
provision of this Agreement shall be void, and the Partnership or the General
Partner, as the case may be, shall not record such Transfer on its books or
treat any purported Transferee of such Securities as the owner of such
securities for any purpose.
4. Public Offering.
---------------
(a) If at any time the Board approves a public offering of any of the
equity securities of the Partnership to be registered under the Securities
Act or the requisite percentage of holders (the "Requisite Holders")
-----------------
otherwise request the Partnership to make a public offering of equity
securities of the Partnership pursuant to the Registration Rights
Agreement, the holders of Securities and the Partnership will take all
necessary or
5
<PAGE>
desirable actions in connection with the consummation of such registered
offering approved by the Board and, to the extent not inconsistent
therewith, the Requisite Holders. It is the intent that immediately prior
to, and contingent upon the consummation of, the initial registered
offering of equity securities of the Partnership, whether or not pursuant
to the immediately preceding sentence and whether pursuant to a sale by the
Partnership or by any Securityholder, (i) a Delaware corporation will be
incorporated (the "Company"), and (ii) the equity securities of the
-------
Partnership will be recapitalized or reorganized (whether by merger,
exchange, contribution, a combination of the foregoing or otherwise) into a
single class of common stock of the Company, where all holders will receive
such common stock in a manner described in Code Section 351 (or successor
provision or a similar nonrecognition Code provision), and in which all
Securityholders are eligible to be treated as direct or indirect
transferors under Code Section 351 (or successor provision or a similar
nonrecognition Code provision). Such recapitalization, reorganization or
exchange will be effected in such a manner so that, immediately thereafter,
the Securityholders hold only securities of the same class as the
securities that are to be offered to the public in such offering. The
securities to be so held by the Securityholders will be allocated, to the
extent practicable, among the Securityholders (or additional securities
will be issued to one or more Securityholders) so that, immediately after
such recapitalization, reorganization or exchange, each Securityholder
holds securities having an aggregate value equal to the amount which such
Securityholder would have received if, immediately prior to such
recapitalization, reorganization or exchange, the Partnership had
distributed to its Securityholders an aggregate amount equal to the
aggregate value of the securities which are to be held by all
Securityholders immediately after such recapitalization, reorganization or
exchange in a complete liquidation pursuant to the rights and preferences
set forth in the Partnership's constituent documents immediately prior to
such recapitalization, reorganization or exchange, with each share of such
securities having a "value" for such purposes equal to the price per share
of sales to the public as part of such offering. Each Securityholder hereby
agrees that (if so requested by the Board or the Requisite Holders) it will
consent to and vote for a recapitalization, reorganization or exchange of
the existing equity securities of the Partnership into a single class of
common stock of the Company that is consistent with the provisions
described above and that the Board and the Requisite Holders find
acceptable and will take all necessary or desirable actions in connection
with the consummation of the recapitalization, reorganization or exchange.
Without limiting the generality of the foregoing, each holder of Securities
hereby waives any dissenters rights, appraisal rights or similar rights in
connection with such recapitalization, reorganization or exchange.
(b) Notwithstanding the foregoing, unless the Bain Group otherwise
agrees, any such recapitalization, reorganization or exchange will be
structured and implemented in the manner contemplated by Section 13.9 of
the Partnership Agreement; provided that the shares of the common stock of
--------
the Company will be allocated among the Securityholders as described in
paragraph (a) above. Notwithstanding anything else contained in this
6
<PAGE>
Agreement to the contrary, this Section 4(b) may not be amended without the
prior written consent of the Bain Group (so long as it is a
Securityholder).
5. Liquidity Event.
---------------
(a) The Partnership shall seek to effectuate a Liquidity Event upon
the request of a majority of the Bain Group (the "Majority Holder").
---------------
(b) From and after the time (if any) when the Partnership has
informed each of the Securityholders that it desires to effectuate a
Liquidity Event, the Partnership and each holder of Securities shall (i)
cooperate in good faith to effectuate such Liquidity Event, and (ii)
consent to and raise no objections against, and take all necessary or
desirable actions in connection with, the consummation of such Liquidity
Event, including those reasonably requested by the Seller (as defined
below). Without limiting the generality of the foregoing, subject to the
terms set forth in this Section 5, (i) each holder of Securities hereby
waives any dissenters rights, appraisal rights or similar rights in
connection with such Liquidity Event and (ii) if all or any portion of any
such Liquidity Event is structured as a sale of securities, each holder of
Securities shall agree to sell any or all of his or its securities and
rights to acquire securities on the terms and conditions approved by the
Board, if such Liquidity Event is being effectuated by the Board, or the
Majority Holder, if such Liquidity Event is being effectuated by the
Majority Holder. The Person seeking to effectuate such Liquidity Event is
referred to herein as the "Seller".
------
(c) In connection with any Liquidity Event (whether by sale, merger,
recapitalization, reorganization, consolidation, combination or otherwise)
pursuant to this Section 5, each holder of Securities immediately prior to
such Liquidity Event shall receive (on behalf of itself and, where
applicable (e.g., the structure contemplated by Section 13.9 of the
Partnership Agreement is implemented), its direct and indirect
securityholders) the same form of consideration and the same portion of the
aggregate consideration that such holder of Securities would have received
if the aggregate consideration paid by the Buyer to all direct and indirect
securityholders in connection with such Liquidity Event (the "Aggregate
---------
Consideration") had been paid directly to the Partnership and then
-------------
distributed by the Partnership in a complete liquidation pursuant to the
terms of the Partnership Agreement as in effect immediately prior to such
Liquidity Event (and after giving effect to any transfer taxes payable in
connection with such Liquidity Event, the amount of which will be paid
directly to the persons owing such taxes). In furtherance thereof, each
holder of then currently exercisable rights to acquire any class of
Securities will be given an opportunity to either (A) exercise such rights
prior to the consummation of such Liquidity Event and participate in such
sale as holders of such class of Securities or (B) upon the consummation of
such Liquidity Event, or at such other time agreed to by such holder,
receive in exchange for (or, if applicable, upon the exercise of) such
rights, the consideration contemplated to be received by such holder as a
result of such Liquidity Event in the agreement or instrument pursuant to
which such holder acquired such rights from the Partnership or, if no such
consideration is
7
<PAGE>
contemplated thereby, the consideration such holder would have received if
such holder exercised such rights prior to the consummation of such
Liquidity Event less the amount such holder would have paid to the
Partnership to exercise such rights. Each holder of Securities shall take
all necessary or desirable actions in connection with the receipt of the
Aggregate Consideration from such Liquidity Event as is requested by the
Majority Holder to effectuate the foregoing.
(d) If the Partnership or the holders of the Partnership's securities
enter into any negotiation or transaction for which Rule 506 (or any
similar rule then in effect) promulgated by the Securities and Exchange
Commission may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), each holder of
Securities which is not an accredited investor (as that term is defined in
Rule 501 or any similar rule then in effect ("Rule 501") promulgated by the
--------
Securities and Exchange Commission) will, at the request of the Seller,
appoint a purchaser representative (as such term is defined in Rule 501)
reasonably acceptable to the Seller. If any holder of Securities appoints a
purchaser representative designated by the Seller, the Partnership will be
responsible for the fees of the purchaser representative so appointed. If
any holder of Securities declines to appoint the purchaser representative
designated by the Seller, such holder will appoint another purchaser
representative (reasonably acceptable to the Seller), and such holder will
be responsible for the fees of the purchaser representative so appointed.
(e) The Partnership will pay the costs of any sale of Securities
pursuant to a Liquidity Event to the extent such costs are incurred for the
benefit of all holders of Securities and are not otherwise paid by the
acquiring party, but including in any event the reasonable fees and
disbursements of one counsel chosen by a majority of the Bain Group (so
long as it is a Securityholder). Costs incurred by any holder of
Securities on its own behalf will not be considered costs of the
transaction hereunder.
(f) The provisions of this Section 5 shall terminate upon the
consummation of an IPO or a Liquidity Event.
(g) Notwithstanding the foregoing, unless the Bain Group otherwise
agrees, any such Liquidity Event will be structured and implemented in the
manner contemplated by Section 13.9 of the Partnership Agreement; provided
--------
that the Aggregate Consideration will be paid among the direct and indirect
holders of Securities as described in paragraph (c) above. Notwithstanding
anything else contained in this Agreement to the contrary, this Section
5(g) may not be amended without the prior written consent of the Bain Group
(so long as they are Securityholders).
(h) The Majority Holder shall provide Ray G. Anthony with notice of a
Liquidity Event at least 5 days prior to the execution of a letter of
intent or a definitive agreement to effectuate a Liquidity Event.
8
<PAGE>
6. Preemptive Rights.
-----------------
(a) Except as set forth in subparagraph (b) below, the Partnership
and the General Partner will not issue, sell or otherwise transfer for
consideration to the Bain Group or its Affiliates (an "Issuance") at any time
--------
prior to an IPO, any Equity Securities or Membership Interests (the "Preemptive
----------
Interests") unless, at least 30 days and not more than 60 days prior to such
- ---------
issuance, the Partnership or the General Partner, as the case may be, notifies
each Securityholder in writing of the Issuance (including the price, the
purchasers thereof and the other terms thereof) and grants to each
Securityholder, the right (the "Right") to subscribe for and purchase such
-----
Preemptive Interests so issued at the same price and on the same terms as issued
in the Issuance such that, after giving effect to the Issuance and exercise of
the Right, the Preemptive Interests owned by such holder shall represent the
same percentage of the outstanding Class A Common Units, Class L Common Units
and Membership Interests as were owned by such holder prior to the Issuance on a
fully diluted basis, or such lesser amount designated by such holder. The Right
may be exercised by such holder at any time by written notice to the Partnership
and the General Partner, received by the Partnership and the General Partner
within 15 days after receipt by such holder of the notice from the Partnership
and the General Partner referred to above. The closing of the purchase and sale
pursuant to the exercise of the Right shall occur at least 10 days after the
Partnership and the General Partner receive notice of the exercise of the Right
and concurrently with the closing of the Issuance. In the event that the
consideration received by the Partnership and the General Partner in connection
with an Issuance is property other than cash, each Securityholder may, at its
election, pay the purchase price for such additional securities in such property
or solely in cash. In the event that any such holder elects to pay cash, the
amount thereof shall be determined based on the fair value of the consideration
received or receivable by the Partnership and/or the General Partner in
connection with the Issuance.
(b) Notwithstanding the foregoing, the Right shall not apply to
issuances of equity securities (or securities convertible into or exchangeable
for, or options to purchase, such units), pro rata to all holders of Common
Units, as a dividend on, subdivision of or other distribution in respect of, the
Common Units in accordance with the Partnership's Partnership Agreement, nor
issuances of equity securities (or securities convertible into or exchangeable
for, or options to purchase, such membership interests), pro rata to all holders
of Membership Interests, as a dividend on, subdivision of or other distribution
in respect of the Membership Interests in accordance with the General Partner's
LLC Agreement.
(c) The provisions of this paragraph 6 will terminate upon the
consummation of an IPO (as defined in paragraph 8).
7. Change in General Partner. Without the consent of all of the
-------------------------
holders of Membership Interests (or other equity interests in a Successor
General Partner described below), no Successor General Partner (as defined in
the Partnership Agreement) will be elected by the Securityholders and admitted
to the Partnership (and no successor general partner of any Subsidiary of the
Partnership will be elected by the Securityholders and admitted to such
9
<PAGE>
Subsidiary) unless such Successor General Partner is a newly formed, single
purpose entity with no other assets or liabilities, and each holder of
Membership Units (or such other equity interests described above) is given an
opportunity to purchase an ownership interest in such Successor General Partner
equivalent in value, voting power and other rights and privileges to the
ownership interest in the General Partner which such holder of Membership
Interests (or such other equity interests described above) has in such General
Partner at such time solely in exchange for such holder's Membership Interests
(or such other equity interests described above), and the ownership interests in
such Successor General Partner become subject to this Agreement as if such
ownership interests were Membership Units. Further, the Securityholders will not
elect to dissolve the General Partner or the Partnership (or any successor to
such entity) in order to evade or avoid the restrictions set forth above, to
remove a holder of Units or Membership Interests, or otherwise to defeat or
evade the intent of this paragraph 7.
8. Certain Definitions.
-------------------
"Affiliate" is defined in the Recapitalization Agreement.
---------
"Bain Group" means the General Partner and Bain/ACR, L.L.C.
----------
"Board" means the Board of Managers of the General Partner.
-----
"Class A Common Units" means (i) any Class A Common Units (as defined
--------------------
in the Partnership Agreement) purchased or otherwise acquired by any
Securityholder, and (ii) any equity securities issued or issuable directly or
indirectly with respect to any of the Class A Common Units referred to in clause
(i) above, by way of a dividend or split or exchange or in connection with a
combination of units, recapitalization, merger, consolidation or other
reorganization.
"Class L Common Units" means (i) any Class L Common Units (as defined
--------------------
in the Partnership Agreement) purchased or otherwise acquired by any
Securityholder, and (ii) any equity securities issued or issuable directly or
indirectly with respect to any of the Class L Common Units referred to in clause
(i) above, by way of a dividend or split or exchange or in connection with a
combination of units, recapitalization, merger, consolidation or other
reorganization.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Common Units" is defined in the Partnership Agreement.
------------
"Executive Agreements" means each of the Executive Purchase Agreements
--------------------
entered into from time to time by and among the Partnership, the General
Partner, Bain/ACR, L.L.C. and certain of the executives of the Partnership and
the General Partner.
"Equity Securities" is defined in the Partnership Agreement.
-----------------
10
<PAGE>
"General Partner" is defined in the preamble.
---------------
"Indirect Owner" means with respect to each Person which is (i) a
--------------
corporation or any similar entity, each shareholder and each Indirect Owner of
such shareholder; (ii) a limited liability company or any similar entity, each
member and each Indirect Owner of such member; (iii) a partnership (whether
limited or general) or similar entity, each partner and each Indirect Owner of
such partner; (iv) a trust or any similar entity, each beneficiary who has the
legal right (or whose spouse has the present legal right) to demand a
distribution of the trust's interest and each Indirect Owner of such beneficiary
or such beneficiary's spouse (whether in such beneficiary's capacity as a
beneficiary, trustee or otherwise and whether by revocation or amendment of such
trust or otherwise).
"IPO" means a public offering either (a) where the Partnership has
---
received net proceeds of at least $75 million (measured as of the time of
issuance) or (b) which constitute at least 20% of the Partnership's outstanding
Units (measured as of the date of determination).
"Liquidity Event" is defined in the Partnership Agreement.
---------------
"LLC Agreement" is defined in the preamble.
-------------
"Membership Interests" means membership interests in the General
--------------------
Partner.
"Other Securities" means Securities owned by Securityholders that are
----------------
not a part of the Bain Group.
"Partnership Agreement" is defined in the preamble.
---------------------
"Preferred Units" means the Series A Preferred Units of the
---------------
Partnership (as defined in the Partnership Agreement).
"Public Sale" means any sale of Securities to the public pursuant to
-----------
an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 adopted
under the Securities Act.
"Recapitalization Agreement" means that certain Recapitalization
--------------------------
Agreement by and among the Partnership, Bain/ACR, L.L.C., ACR Management,
L.L.C., Ray G. Anthony and the other parties signatory thereto.
"Registration Rights Agreement" means that certain Registration Rights
-----------------------------
Agreement, dated as of the date hereof, between the Partnership and its
securityholders, as amended or modified from time to time.
"Securities" means, collectively, Class A Common Units, Class L Common
----------
Units, Preferred Units, Membership Interests and any other equity interests of
the Partnership or the
11
<PAGE>
General Partner, but explicitly excluding rights to acquire equity interests of
the Partnership or the General Partner. As to any particular Securities, such
units and membership interests shall cease to be Securities when they have been
disposed of in a Public Sale or repurchased by the Partnership, the General
Partner or any Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended, and
--------------
applicable rules and regulations thereunder, and any successor to such statute,
rules or regulations. Any reference herein to a specific section, rule or
regulation of the Securities Act shall be deemed to include any corresponding
provisions of future law.
"Securities and Exchange Commission" includes any governmental body
----------------------------------
or agency succeeding to the functions thereof.
"Subsidiary" is defined in the Partnership Agreement.
----------
9. Amendment and Waiver. Except as otherwise provided herein, no
--------------------
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Partnership, the General Partner or the holders of
Securities unless such modification, amendment or waiver is approved in writing
by the holders of at least a majority of the Securities held by the Bain Group;
provided that no such amendment or modification that would adversely affect
- -------- ----
holders of one class or group of Securities in a manner different than holders
of any other class or group of Securities (other than amendments and
modifications in connection with the issuances of Equity Securities permitted by
Section 3.6 of the Partnership Agreement) shall be effective against the holders
of such class or group of Securities without the prior written consent of
holders of at least a majority of Securities of such class or group adversely
affected thereby. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute a waiver
of any such breach or any other covenant, duty, agreement or condition.
10. Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
11. Entire Agreement. This Agreement, those documents expressly
----------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
12
<PAGE>
12. Successors and Assigns. Except as otherwise provided herein,
----------------------
this Agreement shall bind and inure to the benefit of and be enforceable by the
Partnership, the General Partner and their successors and permitted assigns and
the Securityholders and any subsequent holders of Securities and the respective
successors and permitted assigns of each of them, so long as they hold
Securities. Neither the Partnership nor the General Partner may assign any of
its obligations under this Agreement (other than in connection with a merger,
consolidation or other form of reorganization permitted by other sections of
this Agreement) without the prior written consent of a majority of the Bain
Group.
13. Counterparts. This Agreement may be executed in separate
------------
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.
14. Remedies. Any Person having rights under any provision of this
--------
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement. Nothing contained in this Agreement will be construed to confer upon
any Person who is not a signatory hereto any rights or benefits, as a third
party beneficiary or otherwise.
15. Notices. Any notice provided for in this Agreement will be in
-------
writing and will be either personally delivered, or received by certified mail,
return receipt requested, or sent by reputable overnight courier service
(charges prepaid) to the Partnership at the address set forth below and to any
other recipient and to any subsequent holder of Securities subject to this
Agreement at such address as indicated by the Partnership's records, or at such
address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. Notices will be deemed
to have been given hereunder when delivered personally, three days after deposit
in the U.S. mail and one day after deposit with a reputable overnight courier
service. The Partnership's and General Partner's addresses are:
To the Partnership:
------------------
Anthony Crane Rental Holdings, L.P.
1165 Camp Hollow Road
West Mifflin, PA 15122
Attention: Ray G. Anthony
13
<PAGE>
To the General Partner:
----------------------
ACR Management, L.L.C.
c/o Bain Capital Inc.
Two Copley Place
Boston, MA 02116
Attention: Paul Edgerley
Andrew Balson
Paige Daly
16. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the Commonwealth of Pennsylvania,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the Commonwealth of Pennsylvania or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the Commonwealth of Pennsylvania. Any dispute relating hereto shall
be heard in the state or federal courts of Pennsylvania, and the parties agree
to jurisdiction and venue therein.
17. Descriptive Headings; Interpretation. The descriptive headings
------------------------------------
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the context, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa. The use of the word "including" in
this Agreement shall be by way of example rather than by limitation. Reference
to any agreement, document or instrument means such agreement, document or
instrument as amended or otherwise modified from time to time in accordance with
the terms thereof, and if applicable hereof. Without limiting the generality of
the immediately preceding sentence, no amendment or other modification to any
agreement, document or instrument that requires the consent of any Person
pursuant to the terms of this Agreement or any other agreement will be given
effect hereunder unless such Person has consented in writing to such amendment
or modification. The use of the words "or," "either" and "any" shall not be
exclusive.
18. No Strict Construction. The parties hereto have participated
-----------------------
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
19. Issuances of Additional Securities. Notwithstanding anything
----------------------------------
contained herein to the contrary, neither the Partnership nor the General
Partner shall issue any securities of the same type as any Securities held by
any Securityholder to any recipient that is not a party hereto (other than in
connection with a public offering of the Partnership's equity securities
registered under the Securities Act) unless the recipient thereof executes the
agreements that such recipient would be required to execute pursuant to Section
3 if such recipient were a transferee of such securities, thereby becoming a
party hereto and thereto, prior to, or concurrently with,
14
<PAGE>
receiving securities of the Partnership or the General Partner. Any issuance or
attempted issuance in violation of any provision of this Agreement shall be
void, and neither the Partnership nor the General Partner shall record such
issuance on its books or treat any purported recipient of such securities as the
owner of such securities for any purpose.
* * * * *
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Securityholders Agreement as of the day and year first above written.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Andrew B. Balson
------------------------------------------
Its: Secretary
------------------------------------------
ACR MANAGEMENT, L.L.C.
By: /s/ Andrew B. Balson
------------------------------------------
Its: Secretary
------------------------------------------
BAIN/ACR, L.L.C.
By: /s/ Robert C. Gay
------------------------------------------
Its: President
------------------------------------------
ANTHONY IRON AND METAL COMPANY
By: /s/ David W. Mahokey
------------------------------------------
A General Partner
/s/ David W. Mahokey
-----------------------------------------------
David W. Mahokey
/s/ Arthur J. Innamorato
-----------------------------------------------
Arthur J. Innamorato
/s/ Albert C. Bove
-----------------------------------------------
Albert C. Bove
<PAGE>
Continuation of signature page to
the Securityholders Agreement
/s/ William B. Kania
---------------------------------------------
William B. Kania
<PAGE>
EXHIBIT 10.6
[EXECUTION COPY]
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
---------
July 22, 1998 by and among Anthony Crane Rental Holdings, L.P., a Pennsylvania
limited partnership (the "Partnership"), ACR Management, L.L.C., a Delaware
-----------
limited liability company ("Bain Management"), Bain/ACR, L.L.C., a Delaware
---------------
limited liability company ("Bain" and together with Bain Management, the "Bain
---- ----
Investors"), the Persons listed on the Schedule of Other Investors attached
- --------- ---------------------------
hereto (the "Other Investors") and each of the other Persons who becomes a party
---------------
to this Agreement after the date hereof pursuant to paragraphs 10(e) or 10(f)
below. Certain capitalized terms used herein are defined in paragraph 9 below.
WHEREAS, Anthony Crane Rental, L.P., Bain Management, Bain and the
Other Investors are party to that certain Amended and Restated Recapitalization
Agreement dated as of July 21, 1998 (the "Recapitalization Agreement"); and
--------------------------
WHEREAS, the execution and delivery of this Agreement is a condition
to the Closing under the Recapitalization Agreement.
NOW THEREFORE, the parties to this Agreement, intending to be legally
bound, hereby agree as follows:
1. Demand Registrations.
--------------------
(a) Requests for Registration. At any time after the Closing under
-------------------------
the Recapitalization Agreement and the conversion of the Partnership from a
limited partnership to a corporation, the holders of a majority of the Bain
Registrable Securities may request registration under the Securities Act of
1933, as amended (the "Securities Act"), of (x) all or any portion of their
--------------
Registrable Securities on Form S-1 or any similar long-form registration ("Long-
-----
Form Registrations"), and (y) all or any portion of their Registrable Securities
- ------------------
on Form S-2 or S-3 (including pursuant to Rule 415 under the Securities Act) or
any similar short-form registration ("Short-Form Registrations"), if available.
------------------------
All registrations requested pursuant to this paragraph 1(a) are referred to
herein as "Demand Registrations." Each request for a Demand Registration shall
--------------------
specify the approximate number of Registrable Securities requested to be
registered and the anticipated per share price range for such offering. Within
10 days after receipt of any such request, the Company shall give written notice
of such requested registration to all other holders of Registrable Securities
and, subject to paragraph 1(d) below, shall include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 15 days after the receipt of the Company's
notice.
<PAGE>
(b) Long-Form Registrations. The holders of a majority of the Bain
-----------------------
Registrable Securities shall be entitled to request four Long-Form Registrations
in which the Company shall pay all Registration Expenses. A registration shall
not count as one of the permitted Long-Form Registrations until it has become
effective and neither the last nor any subsequent Long-Form Registration shall
count as one of the permitted Long-Form Registrations unless the holders of
Registrable Securities are able to register and sell at least 90% of the
Registrable Securities requested to be included in such registration; provided
--------
that in any event the Company shall pay all Registration Expenses in connection
with any registration initiated as a Long-Form Registration whether or not it
has become effective and whether or not such registration has counted as one of
the permitted Long-Form Registrations. All Long-Form Registrations shall be
underwritten registrations.
(c) Short-Form Registrations. In addition to the Long-Form
------------------------
Registrations provided pursuant to paragraph 1(b), the holders of a majority of
the Bain Registrable Securities shall be entitled to request an unlimited number
of Short-Form Registrations in which the Company shall pay all Registration
Expenses. Notwithstanding anything contained herein to the contrary, Demand
Registrations shall be Short-Form Registrations whenever the Company is
permitted to use any applicable short form. After the Company has become subject
to the reporting requirements of the Securities Exchange Act, the Company shall
use its best efforts to make Short-Form Registrations on Form S-3 available for
the sale of Registrable Securities. If the Company, pursuant to the request of
the holders of a majority of the Bain Registrable Securities, is qualified to
and has filed with the Securities and Exchange Commission a registration
statement under the Securities Act on Form S-3 pursuant to Rule 415 under the
Securities Act (the "Required Registration"), the Company shall use its best
---------------------
efforts to cause the Required Registration to be declared effective under the
Securities Act as soon as practical after filing, and once effective, the
Company shall cause such Required Registration to remain effective for a period
ending on the earlier of (i) the date on which all Registrable Securities have
been sold pursuant to the Required Registration or (ii) the date as of which the
holders of Bain Registrable Securities (assuming such holders are affiliates of
the Company) are able to sell all of the Bain Registrable Securities then held
by them within a ninety-day period in compliance with Rule 144 under the
Securities Act (the "Effective Period").
----------------
(d) Priority on Demand Registrations. The Company shall not include
--------------------------------
in any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the holders of a majority of the Bain
Registrable Securities. If a Demand Registration is an underwritten offering and
the managing underwriters advise the Company in writing (with a copy to each
party hereto requesting registration of Registrable Securities) that in their
opinion the number of Registrable Securities and, if permitted hereunder, other
securities requested to be included in such offering exceeds the number of
Registrable Securities and other securities, if any, which can be sold without
adversely affecting the marketability of the offering, the Company will include
in such registration prior to the inclusion of any securities which are not
Registrable Securities the number of Registrable Securities requested to be
included which in the opinion of such underwriters can be sold without adversely
affecting the marketability of the offering, pro rata
-2-
<PAGE>
among the respective holders thereof on the basis of the number of shares of
Registrable Securities owned by each such holder. Any Persons other than holders
of Registrable Securities who participate in Demand Registrations which are not
at the Company's expense must pay their share of the Registration Expenses as
provided in paragraph 5 hereof.
(e) Restrictions on Demand Registrations. The Company shall not be
------------------------------------
obligated to effect any Demand Registration within 180 days after the effective
date of a previous Demand Registration. The Company shall be entitled to
postpone, for up to 180 days, the filing or the effectiveness of a registration
statement for a Demand Registration if the Company and the holders of at least a
majority of the Bain Registrable Securities agree that such Demand Registration
would be reasonably expected to have an adverse effect on any proposal or plan
by the Company or any of its Subsidiaries to engage in any acquisition of assets
(other than in the ordinary course of business) or any merger, consolidation,
tender offer or similar transaction.
(f) Selection of Underwriters. The holders of a majority of the Bain
-------------------------
Registrable Securities included in any Demand Registration will have the right
to select the investment banker(s) and manager(s) to administer the offering,
subject to the Company's approval, which will not be unreasonably withheld.
(g) Other Registration Rights. Except as provided in this Agreement,
-------------------------
the Company shall not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the prior written
consent of the holders of a majority of the Bain Registrable Securities.
2. Piggyback Registrations.
-----------------------
(a) Right to Piggyback. Whenever the Company proposes to register any
------------------
of its equity securities (including any proposed registration of the Company's
securities by any third party) under the Securities Act (other than pursuant to
a Demand Registration or a registration on Form S-4 or Form S-8 or any successor
or similar forms) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), whether or
----------------------
not for sale for its own account, the Company shall give prompt written notice
to all holders of Registrable Securities of its intention to effect such a
registration and shall include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within 30 days after the receipt of the Company's notice.
(b) Piggyback Expenses. The Registration Expenses of the holders of
------------------
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration is
---------------------------------
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing (with a copy to each party hereto
requesting registration of Registrable
-3-
<PAGE>
Securities) that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of such offering, the
Company shall include in such registration (i) first, the securities the Company
-----
proposes to sell, (ii) second, the Registrable Securities requested to be
------
included in such registration, pro rata among the holders of such Registrable
Securities on the basis of the number of shares owned by each such holder and
(iii) third, other securities requested to be included in such registration.
-----
(d) Priority on Secondary Registrations. If a Piggyback Registration
-----------------------------------
is an underwritten secondary registration on behalf of holders of the Company's
securities (and is not a Demand Registration), and the managing underwriters
advise the Company in writing (with a copy to each party hereto requesting
registration of Registrable Securities) that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold without adversely affecting the marketability of the offering,
the Company shall include in such registration (i) first, the securities
-----
requested to be included therein by the holders requesting such registration and
the Registrable Securities requested to be included in such registration, pro
rata among the holders of such securities on the basis of the number of shares
owned by each such holder and (ii) second, other securities requested to be
------
included in such registration.
(e) Selection of Underwriters. If any Piggyback Registration is an
-------------------------
underwritten offering, the selection of investment banker(s) and manager(s) for
the offering must be approved by the holders of a majority of the Bain
Registrable Securities included in such Piggyback Registration.
(f) Other Registrations. If the Company has previously filed a
-------------------
registration statement with respect to Registrable Securities pursuant to
paragraph 1 or pursuant to this paragraph 2, and if such previous registration
has not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convert ible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-4 or Form S-8 or any successor or similar
forms), whether on its own behalf or at the request of any holder or holders of
such securities, until a period of at least 180 days has elapsed from the
effective date of such previous registration.
3. Holdback Agreements.
-------------------
(a) To the extent not inconsistent with applicable law, each holder
of Registrable Securities shall not effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities, options or rights convertible into or exchangeable or
exercisable for such securities, during the 10 days prior to and the 180-day
period beginning on the effective date of any underwritten Demand Registration
or any underwritten Piggyback Registration in which Registrable Securities are
included (except as part of such underwritten registration), unless the
underwriters managing the registered public offering otherwise agree.
-4-
<PAGE>
(b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10 days prior to and
during the 180-day period beginning on the effective date of any (x)
underwritten Demand Registration, (y) underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-4 or Form S-8 or any successor or similar forms) or (z) post-effective
amendment of a Required Registration pursuant to which an underwritten offering
is to be effected, unless (in any such case) the underwriter managing the
registered public offering otherwise agrees, and (ii) to cause each holder of
its equity securities, or any securities convertible into or exchangeable or
exercisable for equity securities purchased from the Company at any time after
the date of this Agreement (other than in a registered public offering) to agree
not to effect any public sale or distribution (including sales pursuant to Rule
144) of any such securities during such period (except as part of such
underwritten registration, if otherwise permitted), unless the underwriters
managing the registered public offering otherwise agree.
4. Registration Procedures. Whenever the holders of Registrable
-----------------------
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) prepare and (within 60 days after the end of the period within
which requests for registration may be given to the Company) file with the
Securities and Exchange Commission a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become effective (provided that before filing a registration
-------- ----
statement or prospectus or any amendments or supplements thereto, the Company
shall furnish to the counsel selected by the holders of a majority of the Bain
Registrable Securities covered by such registration statement copies of all such
documents proposed to be filed, which documents shall be subject to the review
and comment of such counsel);
(b) notify in writing each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of either (i) not less than 180 days (subject to extension pursuant to paragraph
7(b)) or, if such registration statement relates to an underwritten offering,
such longer period as in the opinion of counsel for the underwriters a
prospectus is required by law to be delivered in connection with sales of
Registrable Securities by an underwriter or dealer or (ii) such shorter period
as will terminate when all of the securities covered by such registration
statement have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement (but in any event not before the expiration of any longer period
required under the Securities Act), and to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement until such time as all of such
-5-
<PAGE>
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall not be required to (i) qualify generally
-------- ----
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph (d), (ii) subject itself to taxation in any
such jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the discovery of the happening of
any event as a result of which, the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and, at the request of any such
seller, the Company shall prepare and furnish to such seller a reasonable number
of copies of a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading in the light of the
circumstances under which they were made;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed or on the NASD automated quotation system;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);
-6-
<PAGE>
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in such registration statement for sale in any
jurisdiction, use its best efforts promptly to obtain the withdrawal of such
order;
(m) use its best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities;
(n) obtain one or more comfort letters, dated the effective date of
such registration statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement), from the Company's independent public accountants in customary form
and covering such matters of the type customarily covered by comfort letters as
the holders of a majority of the Registrable Securities being sold reasonably
request (provided that such Registrable Securities constitute at least 10% of
the securities covered by such registration statement);
(o) provide a legal opinion of the Company's outside counsel, dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement), with respect to the registration statement, each
amendment and supplement thereto, the prospectus included therein (including the
-7-
<PAGE>
preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions
of such nature; and
(p) use reasonable efforts to cause certificates for the Registrable
Securities covered by such registration statement to be delivered by the holders
thereof to the underwriters in such denominations and registered in such names
as the underwriters may request.
5. Registration Expenses.
---------------------
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, travel expenses, filing expenses, messenger and
delivery expenses, fees and disbursements of custodians, fees and disbursements
of counsel for the Company and fees and disbursements of all independent
certified public accountants, underwriters (excluding discounts and commissions)
and other Persons retained by the Company or the holders of Bain Registrable
Securities (all such expenses being herein called "Registration Expenses"),
---------------------
shall be borne by the Company, except as otherwise expressly provided in this
Agreement, except that the Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance and
the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on the NASD automated quotation system (or any successor or similar
system).
(b) In connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel (in addition to local counsel) chosen by the holders of a majority of
the Bain Registrable Securities included in such registration.
(c) To the extent Registration Expenses are not required to be paid
by the Company, each holder of securities included in any registration hereunder
shall pay those Registration Expenses allocable to the registration of such
holder's securities so included, and any Registration Expenses not so allocable
shall be borne by all sellers of securities included in such registration in
proportion to the aggregate selling price of the securities to be so registered.
6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless, to the fullest
extent permitted by law, each holder of Registrable Securities, its officers,
directors, agents, and employees and each Person who controls such holder
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities, joint or several, together with reasonable costs and expenses
-8-
<PAGE>
(including reasonable attorney's fees), to which such indemnified party may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (i) any untrue or
alleged untrue statement of material fact contained (A) in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or (B) in any application or other document or communication
(in this paragraph 6 collectively called an "application") executed by or on
-----------
behalf of the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify any
securities covered by such registration statement under the "blue sky" or
securities laws thereof, or (ii) any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and the Company will reimburse such holder and each such
director, officer and controlling Person for any legal or any other expenses
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement, or
omission or alleged omission, made in such registration statement, any such
prospectus or preliminary prospectus or any amendment or supplement thereto, or
in any application, in reliance upon, and in conformity with, written
information prepared and furnished to the Company by such holder expressly for
use therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company will indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder will furnish to the
Company in writing such information and affidavits as the Company reasonably
requests (and is customarily provided by selling stockholders) for use in
connection with any such registration statement or prospectus and, to the
fullest extent permitted by law, will indemnify and hold harmless the Company,
and its respective directors, officers, agents and employees and each other
Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities, joint or several, together
with reasonable costs and expenses (including reasonable attorney's fees), to
which such indemnified party may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (i) any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or in any application or (ii) any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is made in such registration statement,
any such prospectus or preliminary prospectus or any amendment or supplement
thereto, or in any application, in reliance upon and in conformity with written
information prepared and
-9-
<PAGE>
furnished to the Company by such holder expressly for use therein, and such
holder will reimburse the Company and each such other indemnified party for any
legal or any other expenses incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
however, that the obligation to indemnify will be individual to each holder and
will be limited to the net amount of proceeds received by such holder from the
sale of Registrable Securities pursuant to such registration statement.
(c) Any person entitled to indemnification under this Agreement shall
notify promptly the indemnifying party in writing of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Paragraph 6, but the failure of any indemnified party to
provide such notice shall not relieve the indemnifying party of its obligations
under the preceding subparagraphs of this Paragraph 6, except to the extent the
indemnifying party is materially prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Paragraph 6. In case any action or proceeding is
brought against an indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside counsel to
the indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in of such claim, to assume the defense thereof
jointly with any other indemnifying party similarly notified, to the extent that
it chooses, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party that it so
chooses, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that (i) if the indemnifying party fails to
-------- -------
take reasonable steps necessary to defend diligently the action or proceeding
within 20 days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; or (ii) if such indemnified
party who is a defendant in any action or proceeding which is also brought
against the indemnifying party reasonably shall have concluded that there may be
one or more legal defenses available to such indemnified party which are not
available to the indemnifying party; or (iii) if representation of both parties
by the same counsel is otherwise inappropriate under applicable standards of
professional conduct, then, in any such case, the indemnified party shall have
the right to assume or continue its own defense as set forth above (but with no
more than one firm of counsel for all indemnified parties in each jurisdiction,
except to the extent any indemnified party or parties reasonably shall have
concluded that there may be legal defenses available to such party or parties
which are not available to the other indemnified parties or to the extent
representation of all indemnified parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct) and the
indemnifying party shall be liable for any expenses therefor.
(d) No indemnifying party shall, without the written consent of each
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (A) includes an
unconditional
-10-
<PAGE>
release of the indemnified party from all liability arising out of such action
or claim without any payment or consideration provided or obligation incurred by
any indemnified party and (B) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(e) If the indemnification provided for in this Paragraph 6 is
unavailable to or is insufficient to hold harmless an indemnified party under
the provisions above in respect to any losses, claims, damages or liabilities
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the sellers of Registrable
Securities and any other sellers participating in the registration statement on
the other hand or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative fault referred to in clause (i) above but also the relative
benefit of the Company on the one hand and of the sellers of Registrable
Securities and any other sellers participating in the registration statement on
the other in connection with the registration statement on the other in
connection with the statement or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the sellers of Registrable Securities and any other sellers participating in
the registration statement on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) to the Company bear to the total net proceeds from the offering
(before deducting expenses) to the sellers of Registrable Securities and any
other sellers participating in the registration statement. The relative fault of
the Company on the one hand and of the sellers of Registrable Securities and any
other sellers participating in the registration statement on the other shall be
determined by reference to, among other things, whether the untrue or alleged
omission to state a material fact relates to information supplied by the Company
or by the sellers of Registrable Securities or other sellers participating in
the registration statement and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the sellers of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Paragraph 6
were determined by pro rata allocation (even if the sellers of Registrable
Securities were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Paragraph 6, no seller of Registrable Securities shall be
required to contribute pursuant to this Paragraph 6 any amount in excess of the
net proceeds received by such Seller from the sale of Registrable Securities
covered by the registration statement filed pursuant hereto. No person guilty of
fraudulent misrepresentation
-11-
<PAGE>
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnification and contribution by any such party provided
for under this Agreement shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant to
law or contract and will remain in full force and effect regardless of any
investigation made or omitted by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and will
survive the transfer of securities.
(g) The indemnification and contribution required by this Paragraph 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
7. Participation in Underwritten Registrations.
-------------------------------------------
(a) No Person may participate in any registration hereunder which is
underwritten unless such Person (i) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements (including, without
limitation, pursuant to the terms of any over-allotment or "green shoe" option
requested by the managing underwriter(s), provided that no holder of Registrable
Securities will be required to sell more than the number of Registrable
Securities that such holder has requested the Company to include in any
registration) and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements; provided that no holder of
-------- ----
Registrable Securities included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder
and such holder's intended method of distribution) or to undertake any
indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in paragraph 6 hereof.
(b) Each Person that is participating in any registration hereunder
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in paragraph 4(e) above, such Person will forthwith
discontinue the disposition of its Registrable Securities pursuant to the
registration statement until such Person's receipt of the copies of a
supplemented or amended prospectus as contemplated by such paragraph 4(e). In
the event the Company shall give any such notice, the applicable time period
mentioned in paragraph 4(b) during which a Registration Statement is to remain
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to this paragraph to
and including the date when each seller of a Registrable Security covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by paragraph 4(e).
-12-
<PAGE>
8. Rule 144 Reporting. With a view to making available the benefits
------------------
of certain rules and regulations of the Securities and Exchange Commission that
may permit the sale of Registrable Securities to the public without
registration, the Company agrees at all times after the Company has filed a
registration statement with the Securities and Exchange Commission pursuant to
the requirements of either the Securities Act or the Exchange Act to use its
best efforts to:
(a) make and keep public information regarding the Company available
as those terms are understood and defined in Rule 144 under the Securities Act;
(b) file with the Securities and Exchange Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") at any time after it has become subject to such reporting
- -------------
requirements; and
(c) so long as a holder owns any Registrable Securities, furnish to
the holder forthwith upon written request a written statement by the Company as
to its compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
as a holder may reasonably request in availing itself of any rule or regulation
of the Securities and Exchange Commission allowing a holder to sell any such
securities without registration.
9. Definitions.
-----------
"Bain Registrable Securities" means (i) any common stock issued to the
---------------------------
Bain Investors by the Company in connection with the conversion of the
Partnership from a limited partnership to a corporation, (ii) any common stock
issued or issuable directly or indirectly with respect to the common stock
referred to in clause (i) above by way of dividend or split or in connection
with a combination of shares, recapitalization, merger, consolidation, or other
reorganization, including a recapitalization or exchange, and (iii) any other
shares of common stock issued by the Company and held by Persons described in
clauses (i) and (ii) above.
"Company" means the corporate successor to the Partnership resulting
-------
from the conversion of the Partnership from a limited partnership to a
corporation.
"Other Registrable Securities" means (i) any common stock issued to
----------------------------
Other Investors by the Company in connection with the conversion of the
Partnership from a limited partnership to a corporation held by a Person who is
a party to this Agreement that do not constitute Bain Registrable Securities and
(ii) any common stock of the Company issued or issuable directly or indirectly
with respect to the common stock referred to in clause (i) above by way of
dividend or split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, including a
recapitalization or exchange and (iii) any other shares of common stock issued
by the Company and held by Persons described in clauses (i) and (ii) above.
-13-
<PAGE>
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Recapitalization Agreement" has the meaning set forth in the
--------------------------
preamble.
"Registrable Securities" means collectively the Bain Registrable
----------------------
Securities and the Other Registrable Securities. For purposes of this Agreement,
a Person shall be deemed to be a holder of Registrable Securities whenever such
Person has the right to acquire such Registrable Securities (upon conversion or
exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected, and such Person
shall be entitled to exercise the rights of a holder of Registrable Securities
hereunder.
10. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company shall not hereafter enter
--------------------------
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement.
(b) Adjustments Affecting Registrable Securities. Except as otherwise
--------------------------------------------
permitted herein or by the other Transaction Documents (as defined in the
Recapitalization Agreement), the Company shall not take any action, or permit
any change to occur, with respect to its securities which would adversely affect
the ability of the holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement or which
would adversely affect the marketability of such Registrable Securities in any
such registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) Remedies. Any Person having rights under any provision of this
--------
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement. Nothing contained in this Agreement will be construed to confer upon
any Person who is not a signatory hereto any rights or benefits as a third party
beneficiary or otherwise.
(d) Amendments and Waivers. Except as otherwise provided herein, no
----------------------
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the holders of Registrable Securities unless
such modification, amendment or waiver is approved in writing by the Company and
the holders of at least a majority of the Bain
-14-
<PAGE>
Registrable Securities then in existence; provided that no such amendment or
-------- ----
modification that would adversely affect holders of one class or group of
Registrable Securities in a manner different than holders of any other class or
group of Registrable Securities (other than amendment and modifications required
to implement the provisions of Section 10(e)), shall be effective against the
holders of such class or group of Registrable Securities without the prior
written consent of holders of at least a majority of Registrable Securities of
such class or group adversely affected thereby. No failure by any party to
insist upon the strict performance of any covenant, duty, agreement or condition
of this Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute a waiver of any such breach or any other covenant,
duty, agreement or condition.
(e) Additional Parties. The governing body of the Company shall be
------------------
entitled, but not obligated, with the consent of Persons holding at least a
majority of the Bain Registrable Securities, to allow any purchaser of equity
securities (or securities or rights convertible or exercisable into equity
securities), of the same type and class of the Registrable Securities, to
execute a counterpart to this Agreement and become a party hereto (each, an
"Additional Party"), in which case the equity securities issued or issuable to
- -----------------
any such Additional Party shall be deemed "Other Registrable Securities."
----------------------------
Except as set forth in this paragraph 10(e) and in paragraph 1(g), the Company
will not grant to any other Persons any registration rights.
(f) Successors and Assigns. All covenants and agreements in this
----------------------
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of the
purchasers or holders of any type of Registrable Securities are, except as
otherwise described herein, also for the benefit of, and enforceable by, any
subsequent holder of Registrable Securities. Notwithstanding the foregoing, in
order to obtain the benefit of this Agreement, any subsequent holder of
Registrable Securities must execute a counterpart to this Agreement, thereby
agreeing to be bound the terms hereof and, in connection with any such
assignment described in this paragraph 10(f) (whether by operation of law or
otherwise), such subsequent holder of Registrable Securities must also first
comply with the terms and conditions (if any) contained in the Recapitalization
Agreement and the Securityholders Agreement (as defined in the Recapitalization
Agreement) in effect at the time of such assignment.
(g) Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
-15-
<PAGE>
(h) Counterparts. This Agreement may be executed in separate
------------
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.
(i) Descriptive Headings; Interpretation. The descriptive headings of
------------------------------------
this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the context, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation. Reference to any
agreement, document or instrument means such agreement, document or instrument
as amended or otherwise modified from time to time in accordance with the terms
thereof, and if applicable hereof. Without limiting the generality of the
immediately preceding sentence, no amendment or other modification to any
agreement, document or instrument that requires the consent of any Person
pursuant to the terms of this Agreement will be given effect hereunder unless
such Person has consented in writing to such amendment or modification. The use
of the words "or," "either" and "any" shall not be exclusive.
(j) Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
Any dispute relating hereto shall be heard in the state or federal courts of
Delaware, and the parties agree to jurisdiction and venue therein.
(k) Notices. Any notice provided for in this Agreement will be in
-------
writing and will be either personally delivered, or received by certified mail,
return receipt requested, or sent by reputable overnight courier service
(charges prepaid) to the Partnership at the address set forth below and to any
other recipient and to any subsequent holder of Registrable Securities subject
to this Agreement at such address as indicated by the Partnership's records, or
at such address or to the attention of such other person as the recipient party
has specified by prior written notice to the sending party. Notices will be
deemed to have been given hereunder when delivered personally, three days after
deposit in the U.S. mail and one day after deposit with a reputable overnight
courier service. The Partnership's address is:
To the Partnership:
------------------
Anthony Crane Rental Holdings, L.P.
1165 Camp Hollow Road
West Mifflin, PA 15122
Attention: David Mahokey
With a copy to:
--------------
-16-
<PAGE>
(which copy shall not constitute notice to the Partnership)
Bain Capital Inc.
Two Copley Place
Boston, MA 02116
Attention: Robert Gay
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(l) No Strict Construction. The parties hereto have participated
----------------------
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
* * * * *
-17-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Andrew B. Balson
-----------------------------------
Its: Secretary
-----------------------------------
BAIN INVESTORS
--------------
ACR MANAGEMENT, L.L.C.
By: /s/ Andrew B. Balson
-----------------------------------
Its: Secretary
-----------------------------------
BAIN/ACR, L.L.C.
By: /s/ Robert C. Gay
-----------------------------------
Its: President
-----------------------------------
OTHER INVESTORS
---------------
ANTHONY IRON AND METAL COMPANY
By: /s/ David W. Mahokey
-----------------------------------
A General Partner
/s/ David W. Mahokey
------------------------------------
David W. Mahokey
/s/ Arthur J. Innamorato
-----------------------------------
Arthur J. Innamorato
/s/ Albert C. Bove
-----------------------------------
Albert C. Bove
<PAGE>
Continuation of signature page of
Registration Rights Agreement
OTHER INVESTORS cont.
---------------------
/s/ William B. Kania
-----------------------------------
William B. Kania
<PAGE>
SCHEDULE OF OTHER INVESTORS
---------------------------
Anthony Iron and Metal Company
David W. Mahokey
Arthur J. Innamorato
Albert C. Bove
William B. Kania
<PAGE>
EXHIBIT 10.7
[EXECUTION COPY]
ADVISORY AGREEMENT
------------------
This Advisory Agreement (this "Agreement") is made and entered into as
---------
of July 22, 1998, by and between Anthony Crane Rental Holdings, L.P., a
Pennsylvania limited partnership ("Anthony Holdings"), Anthony Crane Rental,
----------------
L.P., a Pennsylvania limited partnership ("Anthony Crane" and, together with
-------------
Anthony Holdings, the "Companies"), and Bain Capital, Inc., a Delaware
---------
corporation ("Bain").
----
WHEREAS, the Companies desire to retain Bain and Bain desires to
perform for the Companies, their subsidiaries and affiliates certain services
following the recapitalization of the Companies pursuant to that certain
Recapitalization Agreement dated June 1, 1998, and amended as of July 21, 1998,
between Anthony Crane and the other persons a party thereto (the
"Recapitalization Agreement");
- ---------------------------
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. Term. This Agreement shall be in effect for an initial term
----
commencing on the date hereof and ending on the tenth anniversary hereof (the
"Term"), and shall be automatically extended thereafter on a year to year basis
- -----
unless Anthony Holdings or Bain provides written notice of its desire to
terminate this Agreement to the other party 90 days prior to the expiration of
the Term or any extension thereof; provided that the Term shall automatically
--------
expire, and no further payment will be due hereunder, upon consummation of (i) a
sale of all or substantially all of the assets of the Companies and their
subsidiaries, (ii) a sale of all or substantially all of the partnership
interests of the Companies or (iii) a merger, consolidation or other transaction
which accomplishes one of the foregoing. If this Agreement is terminated before
the end of the Term or any extension thereof by the agreement of the parties,
such termination shall be without compensation after payment of accrued but
unpaid fees and expenses, and Bain agrees not to request, demand or accept any
compensation or consideration in connection therewith.
2. Services. Bain shall perform or cause to be performed such
--------
services for the Companies, their subsidiaries and affiliates as directed by the
Board of Managers of the Companies' general partner (the "Board"), which may
-----
include, without limitation, the following:
(a) general executive and management services;
(b) identification, support, negotiation and analysis of acquisitions
and dispositions by the Companies, their subsidiaries or affiliates;
(c) negotiating, entering into, modifying and terminating contracts
and agreements to which the Companies and their subsidiaries are (or are to
become) a party;
<PAGE>
(d) support, negotiation and analysis of financing alternatives,
including, without limitation, in connection with acquisitions, capital
expenditures and refinancing of existing indebtedness;
(e) finance functions, including assistance in the preparation of
financial projections, and monitoring of compliance with financing
agreements;
(f) marketing functions, including monitoring of marketing plans and
strategies;
(g) human resource functions, including searching and hiring of
executives; and
(h) other services for the Companies, their subsidiaries and
affiliates upon which the Board and Bain agree.
3. Advisory Fee. Payment for services rendered by Bain and/or its
------------
affiliates incurred in connection with the performance of services pursuant to
this Agreement shall initially be $1,000,000 per annum (subject to increase as
determined from time to time by a majority vote of the Board, so long as one
non-Bain appointed director votes in favor of such increase), plus reasonable
out-of-pocket expenses of Bain and/or its affiliates, payable by the Companies
to Bain or its designees on a calendar quarterly basis in advance (with the
first payment of such fee to be paid on the date hereof on a pro rata basis
based on the number of days remaining until the next calendar quarter begins
divided by the number of days in the current calendar quarter) so long as Bain
and/or its affiliates (or its/their permitted assignee) is providing services as
requested by the Board. If at any time when a payment is due under this
Agreement the Companies (i) do not have sufficient available cash to make such
payment or (ii) are prohibited from making such payment pursuant to the terms of
the Companies' loan agreements, part or all of such payment, as the case may be,
shall be deferred. Any amount so deferred shall be added to the amount due
under this Agreement in the quarter following the quarter in which the amount
was deferred.
4. Transaction Fees.
----------------
(a) Upon the closing of the Recapitalization Agreement, the Companies
shall pay to Bain or its designees a fee for services rendered in
connection with the structuring of the Recapitalization Agreement in the
amount of 1% of the total uses of funds for the transactions contemplated
therein.
(b) In addition, during the term of this Agreement, the Companies
shall pay to Bain or its designees a transaction fee in connection with the
consummation of each acquisition, divestiture or financing by the
Companies, their subsidiaries or its affiliates (but excluding sales and
purchases of equipment in the ordinary course of business) in an amount
equal to 1% of the aggregate value of such transaction, plus reasonable
out-of-pocket expenses of Bain and/or its affiliates for its services in
negotiating, analyzing, arranging financing and executing such acquisitions
and, divestitures; provided that such 1% transaction fee may be increased
--------
from time to time by a majority vote of the Board (so long as one non-Bain
appointed director votes in favor of such increase) to reflect industry
practice with respect to such fees.
-2-
<PAGE>
5. Personnel. Bain shall provide and devote to the performance of
---------
this Agreement such partners, employees and agents of Bain as Bain shall deem
appropriate to the furnishing of the services required.
6. Liability. Neither Bain nor any of its affiliates, stockholders,
---------
partners, employees or agents shall be liable to the Companies or their
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated by this
Agreement, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of Bain, its affiliates, stockholders, partners, employees or agents acting
within the scope of their employment or authority.
7. Indemnity. The Companies, their subsidiaries and affiliates
---------
shall defend, indemnify and hold harmless each of Bain, its affiliates,
stockholders, partners, employees and agents from and against any and all loss,
liability, damage or expenses arising from any claim by any person with respect
to, or in any way related to, the performance of services contemplated by this
Agreement (including attorneys' fees) (collectively, "Claims") resulting from
------
any act or omission of Bain, its affiliates, stockholders, partners, employees
or agents, other than for Claims which shall be proven to be the direct result
of gross negligence, bad faith or willful misconduct by Bain, its affiliates,
stockholders, partners, employees or agents. The Companies, their subsidiaries
and affiliates shall defend at their own cost and expense any and all suits or
actions (just or unjust) which may be brought against the Companies, their
subsidiaries or affiliates and Bain, its officers, directors, affiliates,
stockholders, partners, employees or agents or in which Bain, its affiliates,
stockholders, partners, employees or agents may be impleaded with others upon
any Claims, or upon any matter, directly or indirectly, related to or arising
out of this Agreement or the performance hereof by Bain, its affiliates,
stockholders, partners, employees or agents, except that if such damage shall be
proven to be the direct result of gross negligence, bad faith or willful
misconduct by Bain, its affiliates, stockholders, partners, employees or agents,
then Bain shall reimburse the Companies, their subsidiaries and affiliates for
the costs of defense and other costs incurred by the Companies, their
subsidiaries and affiliates.
8. Notices. All notices, demands and other communications to be
-------
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when personally delivered,
sent by telecopy (with receipt confirmed) on a business day during regular
business hours of the recipient (or, if not, on the next succeeding business
day) or one business day after being sent by reputable overnight courier service
(charges prepaid).
To the Companies:
----------------
Anthony Crane Rental, L.P.
1165 Camp Hollow Road
West Mifflin, PA 15122
Attention: David Mahokey
-3-
<PAGE>
with a copy to (which shall not constitute notice hereunder):
Mark C. Coulson
Williams Coulson
Two Chatham Center, 15th Floor
Pittsburgh, PA 15219
If to Bain:
----------
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attention: Paul Edgerley
Andrew Balson
with a copy to (which shall not constitute notice hereunder):
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: James L. Learner
E. Paul Quinn
9. Assignment. Neither party may assign any obligations hereunder
----------
to any other party without the prior written consent of the other party (which
consent shall not be unreasonably withheld); provided that Bain may, without
--------
consent of either of the Companies, assign its rights and obligations under this
Agreement to any of its affiliates (but only if such affiliate is a person or
entity controlled by Bain, or in the case of an affiliate which is a
partnership, Bain is the ultimate general partner of such partnership). The
assignor shall remain liable for the performance of any assignee.
10. Successors. This Agreement and all the obligations and benefits
----------
hereunder shall inure to the successors and assigns of the parties.
11. Counterparts. This Agreement may be executed and delivered by
------------
each party hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.
12. Entire Agreement; Modification; Governing Law. The terms and
---------------------------------------------
conditions hereof constitute the entire agreement between the parties hereto
with respect to the subject matter of this Agreement and supersede all previous
communications, either oral or written, representations or warranties of any
kind whatsoever, except as expressly set forth herein. No modifications of this
Agreement nor waiver of the terms or conditions thereof shall be binding upon
either party unless approved in writing by an authorized representative of such
party. All issues concerning this agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the
-4-
<PAGE>
State of New York or any other jurisdiction) that would cause the application of
the law of any jurisdiction other than the State of New York.
* * * * *
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Advisory Agreement as of
the date first written above.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C., its general partner
By: /s/ Andrew S. Balson
--------------------------------------------
Its: Secretary
--------------------------------------------
ANTHONY CRANE RENTAL, L.P.
By: ACR Management, L.L.C., its general partner
By: /s/ Andrew S. Balson
--------------------------------------------
Its: Secretary
--------------------------------------------
BAIN CAPITAL, INC.
By: Bain Capital Investors VI, L.P.
Its: General Partner
By: Bain Capital Investors VI, Inc.
Its: General Partner
By: /s/ Robert C. Gay
---------------------------------------------
A Managing Director
<PAGE>
EXHIBIT 10.8
[EXECUTION COPY]
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT (this "Agreement") made and entered into as of
---------
July 22, 1998, by and between Anthony Crane Rental, L.P., a Pennsylvania limited
partnership (the "Company") and Anthony Iron and Metal Company, a Pennsylvania
-------
general partnership ("AIM"), and Brown Brothers Harriman & Co., a New York
---
general partnership, as escrow agent (the "Escrow Agent").
------------
WHEREAS, the Company, AIM and certain other persons entered into a
Recapitalization Agreement, dated as of July 22, 1998, (the "Recapitalization
----------------
Agreement"), pursuant to which, among other things, the Company has distributed
- ---------
certain amounts to AIM;
WHEREAS, the Recapitalization Agreement contains certain distribution
amount adjustment provisions and certain indemnification provisions for the
benefit of the Company; and
WHEREAS, as security for the performance of AIM's obligations under
such distribution amount adjustment provisions and such indemnification
provisions, the Recapitalization Agreement provides for the execution and
delivery of this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Terms. Capitalized terms used herein but not otherwise defined
-----
shall have the meanings given to such terms in the Recapitalization Agreement.
2. Delivery of Funds. Pursuant to Section 1.02(e) of the
-----------------
Recapitalization Agreement, simultaneously with execution and delivery of this
Agreement, on the Closing Date, the Company has deposited an aggregate of
$4,000,000 (the "Escrow Amount") with the Escrow Agent. The Escrow Agent shall
-------------
use the Escrow Amount to create a fund (the "Escrow Fund") (such term not to
-----------
include the interest thereon) which will be subject to the terms and conditions
of this Agreement. The Escrow Agent hereby acknowledges receipt of the Escrow
Amount.
3. Escrow Fund Income.
------------------
(a) Investments. The Escrow Agent shall invest the Escrow Fund in any
-----------
of the following investments as directed by AIM from time to time: (i)
securities issued or directly and fully guaranteed or insured by the United
States Government or any agency or instrumentality thereof; (ii) certificates of
deposit and Eurodollar time deposits and overnight bank deposits with any
domestic commercial bank having combined capital and surplus in excess of
$175,000,000; (iii) repurchase obligations with a term of not more than seven
days for underlying securities of the type described in clauses (i) and (ii)
above entered into with any financial institution meeting the qualifications
specified in clause (ii) above; and (iv) commercial paper rated A-1 or the
equivalent thereof by Standard & Poor's Corporation or P-1 or the equivalent
thereof by Moody's Investors Service, Inc. All investments made by the Escrow
Agent prior to the first anniversary of the date of this Agreement shall mature
on or prior to such first anniversary. To the extent that any portion
<PAGE>
of the Escrow Fund is withheld for Pending Claims (as defined below) pursuant to
Section 5(b) below, the Escrow Agent shall invest such funds in a taxable money
market account of the Escrow Agent until such time as such funds are required to
be distributed hereunder.
(b) Absence of Direction from AIM. In the absence of any instructions
-----------------------------
from AIM as to investment of the Escrow Fund, the Escrow Amount shall be
invested in a taxable money market account of the Escrow Agent.
(c) Treatment of Interest. Any interest received by the Escrow Agent
---------------------
("Escrow Income") shall accrue to the Escrow Fund and remain in the Escrow Fund
-------------
and shall be paid to AIM, on a monthly basis on the fifth business day of each
month to the extent that Escrow Income has accrued and is available to be paid
on the investments made by the Escrow Agent. Fees associated with the Escrow
Income, including fees associated with the wiring of such Income, shall be
deducted from such monthly payment.
4. Claims.
------
(a) Notice of Claim for Distribution Amount Adjustment. Upon a final
--------------------------------------------------
determination of the Distribution Amount in accordance with the Recapitalization
Agreement, the Company and AIM shall, jointly deliver to the Escrow Agent
written notice (the "Distribution Amount Adjustment Notice") setting forth the
amount, if any, by which the Actual Distribution Amount is less than the
Estimated Amount paid at the Closing. Within two (2) days after receipt by the
Escrow Agent of the Distribution Amount Adjustment Notice, the Escrow Agent
-------------------------------------
shall pay to the Company the amount of such shortfall in cash in accordance with
Section 4(c) below. The Company shall seek any amounts due to it in accordance
with the Recapitalization Agreement with respect to the Distribution Amount
Adjustment in excess of the Escrow Amount directly from AIM. In the case that
the Escrow Fund holds greater than $2,000,000 after payment of the Distribution
Amount Adjustment, such excess of $2,000,000 shall be distributed by the Escrow
Agent to AIM.
(b) Notice of Claims for Indemnification. Upon a determination by the
------------------------------------
Company that the Company has a claim for indemnification under Section 8 of the
Recapitalization Agreement (each, an "Indemnity Claim"), the Company shall
---------------
deliver to the Escrow Agent a copy of the notice (each, a "Claim Notice")
------------
delivered to AIM pursuant to the Recapitalization Agreement. With respect to
each Indemnity Claim, the Escrow Agent shall pay the following amounts to the
Company from the Escrow Amount in cash in accordance with Section 4(c) below:
(i) the amount of such Indemnity Claim if thirty (30) days
shall have expired since the Company delivered the Claim Notice to the
Escrow Agent and the Escrow Agent shall not have received written
notice within such time from AIM that the amount of the claim is being
contested;
(ii) the amount of such Indemnity Claim (or portion thereof)
directed to be so paid in any written notice received by the Escrow
Agent from AIM; and
-2-
<PAGE>
(iii) the amount of any arbitration award reflected in a final
determination of which the Escrow Agent shall have received a certified
copy, in favor of the Company in any proceeding for indemnity under the
Recapitalization Agreement;
(c) Payment. All claims of the Company against the Escrow Amount
-------
shall be paid promptly out of cash in the Escrow Fund to the extent thereof. To
the extent that cash in the Escrow Fund is insufficient to pay a claim of the
Company in the amount and on the date determined in accordance with Section 4(a)
or Section 4(b) above, the Escrow Agent shall so notify both the Company and AIM
and AIM shall have five (5) days from the time the Escrow Agent delivers notice
thereof to instruct the Escrow Agent as to which non-cash assets of the Escrow
Fund are to be sold or liquidated for the purpose of paying the claim. If such
instructions are not given by AIM within such period, such instructions shall be
given by the Company.
5. Distribution and Termination of the Escrow Fund.
-----------------------------------------------
(a) Escrow Fund Distribution. On the first anniversary of the date of
------------------------
this Agreement, the Escrow Agent shall distribute the remainder of the Escrow
Fund (along with accrued interest thereon) to AIM; provided that if any
--------
Indemnity Claim (of which the Escrow Agent has received a Claim Notice on or
before such date) remains pending on such dates (each such pending claim
hereinafter referred to as a "Pending Claim"), the Escrow Agent shall withhold
-------------
in the Escrow Fund from the amount to be otherwise distributed an amount equal
to such Pending Claim(s). Notwithstanding the foregoing, any distributions
provided for herein shall be subject to the rights of the Escrow Agent under
Section 6(d) below.
(b) Withheld Assets. Assets withheld pursuant to Section 5(a) above
---------------
for individual Pending Claims shall be retained by the Escrow Agent in the
Escrow Fund and paid to the Company from the Escrow Amount in cash in accordance
with Section 4(c) above as follows:
(i) the amount of such Pending Claim if thirty (30) days shall
have expired since the Company delivered to the Escrow Agent and AIM a
copy of the Claim Notice with respect to such Pending Claim and the
Escrow Agent shall not have received written notice within such time
from AIM that the amount of the Pending Claim is being contested;
(ii) the Escrow Agent receives written direction from both the
Company and AIM directing the Escrow Agent to disburse the assets
withheld for the Pending Claim, in which case disbursement shall be
made in accordance with such direction; and
(iii) the Escrow Agent receives a certified copy of an
arbitration award reflected in a final determination, in which case
disbursement of the assets withheld for the Pending Claim shall be made
in the amount or amounts, if any, of the award or awards set forth in
such final determination in favor of the Company in any proceeding for
indemnity under the Recapitalization Agreement.
(c) Disposition of Pending Claims. At each such time as any Pending
-----------------------------
Claim (or portion thereof) is disposed of and no longer pending, the Escrow
Agent shall distribute to AIM, the balance
-3-
<PAGE>
of the assets withheld in respect of such Pending Claim disposed of and no
longer pending. A Pending Claim shall be considered disposed of and no longer
pending when (i) an event described in Section 5(b)(ii) or 5(b)(iii) of this
Agreement has occurred (unless there are amounts still under claim or dispute in
respect of a Pending Claim after giving effect to the amounts paid, in which
case the Escrow Agent shall continue to retain in the Escrow Fund the amounts
still under claim or dispute) or (ii) the Escrow Agent has received a certified
copy of a final determination of an arbitration award in any proceeding for
indemnity under the Recapitalization Agreement in respect of such Pending Claim
and the Escrow Agent has distributed to the Company any amount required pursuant
to Section 5(b)(iii) of this Agreement.
(d) Termination. When the entire Escrow Fund has been distributed in
accordance with Section 4 and/or this Section 5, this Escrow Agreement shall
terminate.
6. Miscellaneous.
-------------
(a) Escrow Agent Obligations. The obligations and duties of the
------------------------
Escrow Agent are confined to those specifically enumerated in this Agreement.
The Escrow Agent shall not be subject to, nor be under any obligation to
ascertain or construe the terms and conditions of the Recapitalization Agreement
or any other instrument, whether or not now or hereafter deposited with or
delivered to the Escrow Agent or referred to in this Agreement, nor shall the
Escrow Agent be obligated to inquire as to the form, execution, sufficiency, or
validity of any such instrument as to the identity, authority, or rights of the
person or persons executing or delivering the same.
(b) Escrow Agent Liability. The Escrow Agent and its partners,
----------------------
officers and employees shall not be personally liable for any act which it may
do or omit to do hereunder in good faith or for any mistake of fact or law for
any action it may take or refrain from taking in connection herewith unless
caused by or arising out of its own gross negligence or willful misconduct. The
Escrow Agent shall not be held liable for any losses that may occur as the
result of the investment or reinvestment of the Escrow Fund.
(c) Conflicts. If the Escrow Agent should receive or become aware of
---------
any conflicting demands or claims with respect to this Agreement, or the rights
of any of the parties hereto, or any money, property, or instruments deposited
herein or affected hereby, the Escrow Agent shall have the right in its sole
discretion, without liability for interest or damages, to discontinue any or all
further acts on its part until such conflict is resolved to its satisfaction
and/or to commence or defend any action or proceeding (for which the Escrow
Agent shall be reimbursed for reasonable legal fees and expenses)for the
determination of such conflict.
(d) Indemnification of Escrow Agent. Subject to the provisions of
-------------------------------
Section 6(b) above, the Company and AIM will jointly and severally indemnify and
hold the Escrow Agent harmless from and against all costs, damages, judgments,
attorneys' fees, expenses, obligations, and liabilities of every kind and nature
which the Escrow Agent may incur, sustain, or be required to pay in
connection with or arising out of this Agreement, and to pay to the Escrow Agent
on demand the amount of all such consents, damages, judgments, attorneys' fees,
expenses, obligations, and
-4-
<PAGE>
liabilities, except such liability and expense as may result from the gross
negligence or willful misconduct of the Escrow Agent.
If the Escrow Agent is entitled to receive, pursuant to this Section
6(d), any amount in indemnification, then, as between the Company, on the one
hand, and AIM, on the other hand, each shall be responsible for one-half thereof
and shall be entitled to contribution from the other or others for any excess
paid to the Escrow Agent. In the event any such indemnification expense shall
arise by reason of acts or omissions of the Company or AIM in violation of any
of their respective obligations under this Agreement, then the party or parties
which is or are in such violation shall be liable for payment of the amount of
such part of the indemnification expense arising from such acts or omissions.
(e) Escrow Agent's Conduct; Fees. In performing its duties hereunder,
----------------------------
the Escrow Agent may rely on statements or documents furnished to it by an
officer of the Company or by AIM, or any other evidence deemed by the Escrow
Agent to be reliable. The Escrow Agent shall be entitled to the payment of
compensation for its services hereunder, which shall be set forth in Schedule A
hereto, and which shall be paid by the Company. The Escrow Agent hereby
acknowledges sufficiency of such consideration.
(f) Successors. This Escrow Agreement shall be binding on and inure
----------
to the benefit of the Company, AIM, the Escrow Agent and their respective
successors.
(g) Representatives and Notices. All notices, requests, demands,
---------------------------
claims, and other communications hereunder will be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be deemed duly
given if (and then one (1) business day after) it is sent by reputable overnight
courier service, and addressed to the intended recipient as set forth below:
To AIM:
------
Anthony Iron and Metal Company
1165 Camp Hollow Road
West Mifflin, PA 15122
Attn: David W. Mahokey
with a copy to:
(which copy shall not constitute notice to AIM)
Williams Coulson
Two Chatham Center - 15th Floor
Pittsburgh, PA 15219
Attention: Mark Coulson
-5-
<PAGE>
To the Company:
--------------
Anthony Crane Rental, L.P.
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Paul Edgerley
Andrew Balson
with a copy to:
--------------
(which copy shall not constitute notice to the Company)
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: James L. Learner
E. Paul Quinn
To the Escrow Agent:
-------------------
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Attention: Victoria Evans
Any party hereto may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means, including delivery in person, by certified or registered
mail (with return receipt requested) or facsimile transmission, but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any party hereto may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other party hereto notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the domestic laws of the Commonwealth of Massachusetts
without giving effect to any choice or conflict of law provision or rule
(whether of the Commonwealth of Massachusetts or any other jurisdiction) that
would cause the application to this Agreement of the laws of any jurisdiction
other than the Commonwealth of Massachusetts.
(i) Amendments. No amendment of any provision of this Agreement shall
----------
be valid unless the same shall be in writing and signed by the Escrow Agent, the
Company and AIM, on behalf of AIM.
-6-
<PAGE>
(j) Reports from the Escrow Agent. The Escrow Agent shall furnish to
-----------------------------
the Company and AIM on a monthly basis a report listing each transaction made by
the Escrow Agent with respect to this Agreement.
(k) Distributions. All payments and distributions to the Company or
-------------
AIM, shall be by wire transfer to the following accounts:
To AIM:
------
Laurel Bank
ABA#: 031 301 053
For the account of
Anthony Iron and Metal Co.
Account No.: 601 004 17
To the Company:
--------------
Fleet Bank
ABA#: 011 900 571
For the account of
Anthony Crane Rental, L.P.
Account No.: 9415845022
(l) Withdrawal of Escrow Agent. The Escrow Agent may, at any time and
--------------------------
for any reason upon the giving of ten (10) days prior notice and without
liability for interest or damages, withdraw as Escrow Agent hereunder, in which
case the Company and AIM will promptly select a successor Escrow Agent. If the
Escrow Agent shall withdraw as Escrow Agent, the Company and AIM shall jointly
appoint a successor.
* * * * *
-7-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the date first written above.
ANTHONY CRANE RENTAL, L.P.
By: ACR Management, L.L.C., its general
partner
By: /s/ Andrew B. Balson
---------------------------------------
Its: Secretary
---------------------------------------
ANTHONY IRON AND METAL COMPANY
By: Anthony Crane Rental, Inc., its managing
general partner
By: /s/ David W. Mahokey
---------------------------------------
Its: General Partner
---------------------------------------
/s/ David W. Mahokey
--------------------------------------------
David W. Mahokey, Chief Financial Officer
BROWN BROTHERS HARRIMAN & CO.
By: /s/ Louise A. Coughlan
---------------------------------------
Its: Manager
---------------------------------------
<PAGE>
SCHEDULE A
----------
Re: Anthony Crane Rental, L.P. Escrow Account
The Escrow Agent's annual fee for services provided in accordance with the terms
of the Escrow Agreement shall be $5,000.00.
In addition, a charge of $1.00 per $1,000.00 of funds invested in any
instruments not sponsored by the Escrow Agent, including Treasury securities,
Repurchase Agreements, and Commercial Paper, subject to a minimum fee of $30.00
and a maximum fee of $250.00 per investment
No additional fee will be charged for funds invested in Certificates of Deposit
or Money Market Funds sponsored by the Escrow Agent.
<PAGE>
EXHIBIT 10.9
[EXECUTION COPY]
================================================================================
________________________________________
ANTHONY CRANE RENTAL, L.P.
________________________________________
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
Dated as of July 22, 1998
THE PARTNERSHIP INTERESTS REPRESENTED BY THIS AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED OR UNDER ANY OTHER APPLICABLE SECURITIES
LAWS. SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED
OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR
EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON
TRANSFERABILITY SET FORTH HEREIN.
================================================================================
<PAGE>
TABLE OF CONTENTS
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<TABLE>
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Page
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<S> <C>
ARTICLE I
DEFINITIONS............................................................................. 1
ARTICLE II
ORGANIZATIONAL MATTERS.................................................................. 6
2.1 Formation of Partnership........................................................... 6
2.2 Limited Partnership Agreement...................................................... 6
2.3 Name............................................................................... 6
2.4 Purpose............................................................................ 6
2.5 Principal Office; Registered Office................................................ 6
2.6 Term............................................................................... 6
ARTICLE III
CAPITAL CONTRIBUTIONS................................................................... 7
3.1 General Partner.................................................................... 7
3.2 Limited Partners................................................................... 7
3.3 Capital Accounts................................................................... 7
3.4 No Withdrawal...................................................................... 8
3.5 Loans From Partners or Assignees................................................... 8
3.6 Issuances of Percentage Interests.................................................. 9
ARTICLE IV
DISTRIBUTIONS AND ALLOCATIONS........................................................... 9
4.1 Distributions...................................................................... 9
4.2 Allocations........................................................................ 10
4.3 Special Allocations................................................................ 10
4.4 Tax Allocations.................................................................... 11
4.5 Curative Allocations............................................................... 12
4.6 Indemnification and Reimbursement for Payments on Behalf of a Partner or
Assignee........................................................................... 13
ARTICLE V
MANAGEMENT.............................................................................. 13
5.1 Authority of General Partner....................................................... 13
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i
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<TABLE>
<S> <C>
5.2 Actions Requiring Approval of Limited Partners.................................... 14
5.3 Partnership Qualifications and Filings............................................ 14
5.4 Reliance by Third Parties......................................................... 14
5.5 Compensation and Reimbursement of General Partner................................. 15
5.6 Outside Activities................................................................ 15
5.7 Loans and Guarantees by the General Partner....................................... 16
5.8 Determinations by the General Partner............................................. 16
5.9 Purchase of Percentage Interests.................................................. 16
5.10 Indemnification................................................................... 16
5.11 Limitation of Liability........................................................... 17
ARTICLE VI
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS............................................. 17
6.1 Limitation of Liability........................................................... 17
6.2 Management of Business............................................................ 17
6.3 No Right of Partition............................................................. 18
6.4 Outside Activities................................................................ 18
ARTICLE VII
BOOKS, RECORDS, ACCOUNTING AND REPORTS................................................. 18
7.1 Records and Accounting............................................................ 18
7.2 Fiscal Year....................................................................... 18
7.3 Reports........................................................................... 19
7.4 Transmission of Communications.................................................... 19
ARTICLE VIII
TAX MATTERS............................................................................ 20
8.1 Preparation of Tax Returns........................................................ 20
8.2 Tax Elections..................................................................... 20
8.3 Tax Controversies................................................................. 20
ARTICLE IX
VOTING; AMENDMENTS..................................................................... 20
9.1 Voting Rights..................................................................... 20
9.2 Amendments........................................................................ 21
ARTICLE X
TRANSFER OF PERCENTAGE INTERESTS....................................................... 22
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ii
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<TABLE>
<S> <C>
10.1 Transfer In General................................................................ 22
10.2 Assignee's Rights.................................................................. 22
10.3 Assignor's Rights and Obligations.................................................. 22
10.4 Prohibited Transfers............................................................... 23
ARTICLE XI
ADMISSION OF PARTNERS.................................................................... 23
11.1 Substituted Limited Partners....................................................... 23
11.2 Additional Limited Partners........................................................ 23
11.3 Admission of a Successor General Partner........................................... 24
ARTICLE XII
WITHDRAWAL OR REMOVAL OF PARTNERS........................................................ 24
12.1 Withdrawal of General Partner...................................................... 24
12.2 Removal of General Partner......................................................... 24
12.3 Election of Successor General Partner.............................................. 24
12.4 Purchase of General Partner's Percentage Interest.................................. 25
12.5 Former General Partner's Liabilities............................................... 25
12.6 Withdrawal of Limited Partners..................................................... 25
ARTICLE XIII
DISSOLUTION AND LIQUIDATION.............................................................. 25
13.1 Dissolution........................................................................ 25
13.2 Continuation After Dissolution..................................................... 26
13.3 Liquidation........................................................................ 27
13.4 Distribution in Kind............................................................... 28
13.5 Deficit Makeup..................................................................... 28
13.6 Cancellation of Certificate of Limited Partnership................................. 28
13.7 Reasonable Time for Winding Up..................................................... 29
13.8 Return of Capital.................................................................. 29
ARTICLE XIV
VALUATION................................................................................ 29
14.1 Determination...................................................................... 29
14.2 Determination of Fair Market....................................................... 29
ARTICLE XV
GENERAL PROVISIONS....................................................................... 30
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<TABLE>
<S> <C>
15.1 Power of Attorney................................................................... 30
15.2 Title to Partnership Assets......................................................... 30
15.3 Addresses and Notices............................................................... 31
15.4 Binding Effect...................................................................... 31
15.5 Creditors........................................................................... 31
15.6 Waiver.............................................................................. 31
15.7 Counterparts........................................................................ 31
15.8 Applicable Law...................................................................... 31
15.9 Severability........................................................................ 31
15.10 Further Action...................................................................... 32
15.11 Expenses............................................................................ 32
15.12 Offset.............................................................................. 32
15.13 Entire Agreement.................................................................... 32
15.14 Remedies............................................................................ 32
15.15 Descriptive Headings; Interpretation................................................ 33
</TABLE>
iv
<PAGE>
ANTHONY CRANE RENTAL, L.P.
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of
July 22, 1998, is entered into by and among the Partners a party hereto.
Pursuant to that certain Amended and Restated Limited Partnership Agreement of
Anthony Crane Rental, L.P. dated as of July 1, 1994, (the "Original Agreement"),
------------------
the Original Agreement was amended and restated pursuant to that certain Amended
and Restated Agreement of Limited Partnership of Anthony Crane Rental, L.P.
dated as of September 23, 1994 (the "First Amended and Restated Agreement").
------------------------------------
The First Amended and Restated Agreement was amended and restated pursuant to
that certain Amended and Restated Agreement of Limited Partnership of Anthony
Crane Rental, L.P., dated as of January 1, 1997 (the "Second Amended and
------------------
Restated Agreement"). The Second Amended and Restated Agreement was amended and
- ------------------
restated pursuant to that certain Amended and Restated Agreement of Limited
Partnership of Anthony Crane Rental, L.P., dated as of July 31, 1998 (the "Third
-----
Amended and Restated Agreement"). The parties hereto desire to amend and
- ------------------------------
restate the Third Amended and Restated Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby amend and restate the Third Amended and Restated Agreement as
follows:
ARTICLE I
DEFINITIONS
The following definitions shall be applied to the terms used in this
Agreement for all purposes, unless otherwise clearly indicated to the contrary.
"Additional Partner" means a Person admitted to the Partnership as a
------------------
Partner pursuant to Section 11.2.
"Adjusted Capital Account Deficit" means with respect to any Capital
--------------------------------
Account as of the end of any Taxable Year, the amount by which the adjusted
balance in such Capital Account is less than zero. For this purpose, such
Person's Capital Account balance shall be
(a) reduced for any items described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6), and
(b) increased for any amount such Person is obligated to contribute
or is treated as being obligated to contribute to the Partnership
pursuant to Treasury
<PAGE>
Regulation Section 1.704-1(b)(2)(ii)(c) (relating to partner
liabilities to a partnership) or 1.704-2(g)(1) and 1.704-2(i)
(relating to minimum gain).
"Admission Date" is defined in Section 10.3.
--------------
"Affiliate" of any Person means any Person that directly or indirectly
---------
controls, is controlled by, or is under common control with the Person in
question.
"Agreement" means this Amended and Restated Limited Partnership
---------
Agreement of Anthony Crane Rental, L.P. dated as of the date hereof.
"Assignee" means a Person to whom a Percentage Interest has been
--------
transferred, but who has not become a Partner pursuant to Article XI.
"Base Rate" means, on any date, a variable rate per annum equal to the
---------
rate of interest most recently published by The Wall Street Journal as the
-----------------------
"prime rate" at large U.S. money center banks.
"Book Value" means, with respect to any Partnership property, the
----------
Partnership's adjusted basis for federal income tax purposes, adjusted from time
to time to reflect the adjustments required or permitted by Treasury Regulation
Section 1.704-1(b)(2)(iv)(d)-(g).
"Capital Account" means the capital account maintained for a Partner
---------------
pursuant to Section 3.3.
"Capital Contribution" means any cash, cash equivalents, surrender of
--------------------
entitlement to deferred compensation (to the extent of the amount so
surrendered), promissory obligations or the Fair Market Value of other property
which a Partner contributes or is deemed to have contributed to the Partnership
pursuant to Section 3.1, 3.2 or 5.1.
"Certificate" means the Partnership's Certificate of Limited
-----------
Partnership as filed with the Secretary of State of Pennsylvania.
"Code" means the United States Internal Revenue Code of 1986, as
----
amended. Such term shall be deemed to include any future amendments to the Code
and any corresponding provisions of succeeding Code provisions (whether or not
such amendments and corresponding provisions are mandatory or discretionary) to
the extent that the General Partner determines in good faith that any such
future amendments and corresponding provisions do not adversely affect the
economic Interests of any of the Partners hereunder.
"Distribution" means each distribution made by the Partnership to a
------------
Partner, whether in cash, property or securities of the Partnership and whether
by liquidating distribution, redemption, repurchase or otherwise; provided that
--------
none of the following shall be a Distribution: (a) any redemption or repurchase
by the Partnership of any Equity Securities, and (b) any recapitalization
2
<PAGE>
or exchange of securities of the Partnership, and any subdivision (by Percentage
Interest split or otherwise) or any combination (by reverse Percentage Interest
split or otherwise) of any outstanding Percentage Interests.
"Equity Securities" means (a) Percentage Interests or other equity
-----------------
Interests in the Partnership (including other classes or groups thereof having
such relative rights, powers and duties as may from time to time be established
by the General Partner, including rights, powers and/or duties senior to
existing classes and groups of Percentage Interests and other equity Interests
in the Partnership), (b) obligations, evidences of indebtedness or other
securities or Interests convertible or exchangeable into Percentage Interests or
other equity Interests in the Partnership and (c) warrants, options or other
rights to purchase or otherwise acquire Percentage Interests or other equity
Interests in the Partnership.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Event of Withdrawal" means the death, retirement, resignation,
-------------------
expulsion, bankruptcy or dissolution of a Partner or the occurrence of any other
event that terminates the continued partnership of a Partner in the Partnership
under the Pennsylvania Act.
"Fair Market Value" means, with respect to any asset or equity
-----------------
interest, its fair market value determined according to Article XIV.
"Fiscal Period" means any interim accounting period within a Taxable
-------------
Year established by the General Partner and which is permitted or required by
Code Section 706.
"Fiscal Year" means the Partnership's annual accounting period
-----------
established pursuant to Section 7.2.
"General Partner" means ACR Management, L.L.C., a Delaware limited
---------------
liability Company, in its capacity as general partner of the Partnership, and
any successor general partner of the Partnership appointed pursuant to the terms
of this Agreement.
"Governmental Entity" means the United States of America or any other
-------------------
nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government.
"Indemnified Person" is defined in Section 5.10.
------------------
"Liens" means any mortgage, pledge, security interest, encumbrance,
-----
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the Partnership, any Subsidiary or any
Affiliate, any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code or any similar statute other than to reflect
ownership by a third party of property leased to the Partnership or any
Subsidiaries under a lease which is not in the nature of a
3
<PAGE>
conditional sale or title retention agreement, or any subordination arrangement
in favor of another Person (other than any subordination arising in the ordinary
course of business).
"Limited Partner" means each of the limited partners named on Schedule
--------------- --------
I attached hereto and any Person admitted to the Partnership as a Substituted
- -
Partner or Additional Partner; but only so long as such Person is shown on the
Partnership's books and records as the owner of one or more Percentage
Interests.
"Losses" means items of Partnership loss and deduction determined
------
according to Section 3.3.
"Majority in Interest" means Partners and/or Assignees holding a
--------------------
majority of all Percentage Interests.
"Minimum Gain" means the partnership minimum gain determined pursuant
------------
to Treasury Regulation Section 1.704-2(d).
"Partner" means a General Partner or a Limited Partner.
-------
"Partnership" means Anthony Crane Rental, L.P., a Pennsylvania limited
-----------
partnership, established in accordance with this Agreement as such limited
partnership may be from time to time constituted, and including its successors.
"Percentage Interest" means the interest of a Partner or Assignee in
-------------------
the Profits, Losses and Distributions of the Partnership, as set forth on
Schedule I attached hereto and as amended from time to time.
- ----------
"Pennsylvania Act" means the Pennsylvania Revised Uniform Limited
----------------
Partnership Act, as it may be amended from time to time, and any successor to
the Pennsylvania Act.
"Person" means an individual or a corporation, partnership, limited
------
liability company, trust, unincorporated organization, association or other
entity.
"Profits" means items of Partnership income and gain determined
-------
according to Section 3.3.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, and applicable rules and regulations thereunder, and any successor
to such statute, rules or regulations. Any reference herein to a specific
section, rule or regulation of the Securities Act shall be deemed to include any
corresponding provisions of future law.
"Subsidiary" means, with respect to any Person, any corporation,
----------
limited partnership, partnership, association or business entity of which (a) if
a corporation, a majority of the total value of all classes of stock or the
total voting power of shares of stock entitled (without regard to the
4
<PAGE>
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
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (b) if a limited partnership, partnership, association
or other business entity (other than a corporation), a majority of partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited partnership,
partnership, association or other business entity (other than a corporation) if
such Person or Persons shall be allocated a majority of the limited partnership,
partnership, association or other business entity gains or losses or shall be or
control any managing member or general partner of such limited partnership,
partnership, association or other business entity. For purposes hereof,
references to a "Subsidiary" of the Partnership shall be given effect only at
such times that the Partnership has one or more Subsidiaries, and, unless
otherwise indicated, the term "Subsidiary" refers to a Subsidiary of the
Partnership.
"Substituted Partner" means a Person that is admitted as a Partner to
-------------------
the Partnership pursuant to Section 11.1.
"Successor General Partner" means a Person that is admitted as a
-------------------------
Partner to the Partnership pursuant to Section 11.3.
"Tax Matters Partner" has the meaning given to such term in Section
-------------------
6231 of the Code.
"Taxable Year" means the Partnership's accounting period for federal
------------
income tax purposes which shall be the same as the Partnerships' Fiscal Year
determined pursuant to Section 7.2.
"Treasury Regulations" means the income tax regulations promulgated
--------------------
under the Code and effective as of the date hereof. Such term shall be deemed
to include any future amendments to such regulations and any corresponding
provisions of succeeding regulations (whether or not such amendments and
corresponding provisions are mandatory or discretionary) to the extent that the
General Partner determines in good faith that any such future amendments and
corresponding provisions do not adversely affect the economic Interests of any
of the Partners hereunder.
5
<PAGE>
ARTICLE II
ORGANIZATIONAL MATTERS
2.1 FORMATION OF PARTNERSHIP. The Partnership was formed on July 1,
1994, as amended and restated on September 23, 1994, as of January 1, 1997, as
of June 30, 1998, and again on the date of this Agreement pursuant to the
provisions of the Pennsylvania Act and the provisions of this Agreement.
2.2 LIMITED PARTNERSHIP AGREEMENT. The Partners hereby execute this
Agreement for the purpose of establishing the affairs of the Partnership and the
conduct of its business in accordance with the provisions of the Pennsylvania
Act. The Partners hereby agree that during the term of the Partnership set
forth in Section 2.6 the rights and obligations of the Partners and Assignees
with respect to the Partnership will be determined in accordance with the terms
and conditions of (a) this Agreement, and (b) the Pennsylvania Act, except where
the Pennsylvania Act provides that such rights and obligations specified in the
Pennsylvania Act shall apply "unless otherwise provided in a limited partnership
agreement" or words of similar effect, and such rights and obligations are set
forth in this Agreement.
2.3 NAME. The name of the Partnership shall be "Anthony Crane
Rental, L.P." The General Partner in its sole discretion may change the name of
the Partnership at any time and from time to time. Notification of any such
change shall be given to all Partners and Assignees. The Partnership's business
may be conducted under its name and/or any other name or names deemed advisable
by the General Partner.
2.4 PURPOSE. The purpose and business of the Partnership shall be
any business which may lawfully be conducted by a limited partnership formed
pursuant to the Pennsylvania Act.
2.5 PRINCIPAL OFFICE; REGISTERED OFFICE. The principal office of the
Partnership shall be at 1165 Camp Hollow Road, West Mifflin, Pennsylvania 15122,
or such other place as the General Partner may from time to time designate. The
Partnership may maintain offices at such other place or places as the General
Partner deems advisable. Notification of any such change shall be given to all
Partners and Assignees. The address of the registered office of the Partnership
in the Commonwealth of Pennsylvania shall be the address of its principal
office.
2.6 TERM. The term of the Partnership commenced upon the filing of
the Certificate in accordance with the Pennsylvania Act and shall continue in
existence until termination and dissolution thereof in accordance with the
provisions of Article XIII.
6
<PAGE>
ARTICLE III
CAPITAL CONTRIBUTIONS
3.1 GENERAL PARTNER. The General Partner has purchased the number of
Percentage Interests from the Partnership as set forth on Schedule I.
----------
3.2 LIMITED PARTNERS.
(a) Each Limited Partner has acquired the number of Percentage
Interests from the Partnership as set forth on Schedule I.
----------
(b) Each Limited Partner who is subsequently issued Percentage
Interests by the Partnership pursuant to Section 3.6 shall make the Capital
Contributions to the Partnership determined under Section 3.6 in exchange for
such Percentage Interests.
3.3 CAPITAL ACCOUNTS.
(a) The Partnership shall maintain a separate Capital Account for
each Partner and Assignee according to the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). For this purpose, the Partnership may (in the discretion of
the General Partner), upon the occurrence of the events specified in Treasury
Regulation Section 1.704-1(b)(2)(iv)(f), increase or decrease the Capital
Accounts in accordance with the rules of such regulation and Treasury Regulation
Section 1.704-1(b)(2)(iv)(g) to reflect a revaluation of Partnership property.
The Partners hereby agree that the respective Capital Account balances for each
Partner have been adjusted as of the date of this Agreement as set forth on
Schedule II.
- -----------
(b) For purposes of computing the amount of any item of Partnership
income, gain, loss or deduction to be allocated pursuant to Article IV and to be
reflected in the Capital Accounts, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes (including any
method of depreciation, cost recovery or amortization used for this purpose);
provided that:
- -------- ----
(i) The computation of all items of income, gain, loss and deduction
shall include those items described in Code Section 705(a)(l)(B)
or Code Section 705(a)(2)(B) and Treasury Regulation Section
1.704-1(b)(2)(iv)(i), without regard to the fact that such items
are not includable in gross income or are not deductible for
federal income tax purposes.
(ii) If the Book Value of any Partnership property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or
(f), the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such property.
7
<PAGE>
(iii) Items of income, gain, loss or deduction attributable to the
disposition of Partnership property having a Book Value that
differs from its adjusted basis for tax purposes shall be
computed by reference to the Book Value of such property.
(iv) Items of depreciation, amortization and other cost recovery
deductions with respect to Partnership property having a Book
Value that differs from its adjusted basis for tax purposes
shall be computed by reference to the property's Book Value in
accordance with Treasury Regulation Section 1.704-
1(b)(2)(iv)(g).
(v) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Sections 732(d), 734(b) or
743(b) is required, pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment
decreases such basis).
(vi) Payments made to any Partner which are treated for Federal
income tax purposes as guaranteed payments pursuant to Code
Section 707(c) shall be treated as Partnership expenses and
shall not be reflected as distributions which reduce the
distributee Partner's respective Capital Account balance;
provided that such payments shall be treated as capital
--------
expenditures of the Partnership to the extent such payments are
required to be capitalized under the Code and any applicable
Treasury Regulations thereunder.
3.4 NO WITHDRAWAL No Person shall be entitled to withdraw any part
of such Person's Capital Contribution or Capital Account or to receive any
Distribution from the Partnership, except as expressly provided herein.
3.5 LOANS FROM PARTNERS OR ASSIGNEES. Loans by Partners or
Assignees to the Partnership shall not be considered Capital Contributions. If
any Partner or Assignee shall transfer funds to the Partnership in excess of the
amounts required hereunder to be contributed by such Partner or Assignee to the
capital of the Partnership, the transfer of such excess shall not result in any
increase in the amount of the Capital Account of such Partner or Assignee. The
amount of any such excess, to the extent approved by the General Partner and the
Partner or Assignee, shall be a debt of the Partnership to such Partner or
Assignee and shall be payable or collectible in accordance with the terms and
conditions upon which such loans are made.
3.6 ISSUANCES OF PERCENTAGE INTERESTS. The General Partner shall
have sole and complete discretion in determining whether to issue Percentage
Interests, the number of Percentage
8
<PAGE>
Interests to be issued at any particular time, the Capital Contribution for any
Percentage Interests issued and all other terms and conditions of the issuance
of Percentage Interests.
ARTICLE IV
DISTRIBUTIONS AND ALLOCATIONS
4.1 DISTRIBUTIONS.
(a) Except as otherwise set forth in Section 4.1(b), the General
Partner may in its sole discretion make Distributions at any time or from time
to time. Each Distribution shall be made ratably among such Partners and
Assignees based upon the number of outstanding Percentage Interests held by each
such Partners and Assignees immediately prior to such Distribution.
(b) Notwithstanding anything to the contrary herein, to the extent
that funds are available to the Partnership, the Partnership shall, subject to
any restrictions contained in the financing agreements to which the Partnership
or any of its Affiliates is a party, distribute to each Partner and Assignee
within 75 days after the close of each Taxable Year (or at such earlier times
and in such amounts as determined in good faith by the General Partner to be
appropriate to enable the Partner or Assignee to pay estimated income tax
liabilities) an amount equal to 46% (or, at the General Partner's sole
discretion such greater or lesser percentage as the General Partner may
determine in good faith from time to time, to represent the sum of the maximum
marginal federal, state and local income tax rates applicable to all Partners
and Assignees or their partners or stockholders, if applicable) of:
(i) the Profits for such Taxable Year allocated to such Partner or
Assignee pursuant to Section 4.2 and 4.3, reduced by, at the
discretion of the General Partner
(ii) the sum of (x) the Losses for such Taxable Year allocated to such
Partner or Assignee pursuant to Sections 4.2 and 4.3 and (y) the
excess of the aggregate Losses over the aggregate Profits for all
prior Taxable Years allocated to such Partner or Assignee
pursuant to Sections 4.2 and 4.3, but only to the extent that
such excess Losses have not expired unused pursuant to applicable
Code provisions.
Distributions made pursuant to Section 4.1(b) shall be treated as
Distributions made pursuant to Section 4.1(a); provided that any distribution to
--------
a Partner pursuant to Section 4.1(b) which exceeds the amount that would have
been distributed to such Partner had the amount distributed pursuant to Section
4.1(b) been distributed pursuant to Section 4.1(a) shall be treated as an
advance distribution under Section 4.1(a) and shall be offset against subsequent
distributions such Partner would otherwise be entitled to receive pursuant to
Section 4.1(a).
9
<PAGE>
4.2 ALLOCATIONS.
(a) Except as otherwise provided in Section 4.3 below, Profits and
Losses for any Fiscal Year shall be allocated among the Partners and Assignees
in such a manner that, as of the end of such Fiscal Year, the sum of (i) the
Capital Account of each Partner or Assignee, (ii) such Partner or Assignee's
share of Minimum Gain (as determined according to Treasury Regulation Section
1.704-2(g)) and (iii) such Partner or Assignee's partner nonrecourse debt
minimum gain (as defined in Treasury Regulation Section 1.704-2(i)(3)) shall be
equal to the respective net amounts, positive or negative, which would be
distributed to them or for which they would be liable to the Partnership under
the Pennsylvania Act, determined as if the Partnership were to (i) liquidate the
assets of the Partnership for an amount equal to their Book Value and (ii)
distribute the proceeds of liquidation pursuant to Section 13.3.
(b) For purposes of this Section 4.2, but subject to the provisions
of Sections 4.3 and 4.5, if Profits exceed Losses for a Fiscal Year, (i) Losses
shall first be allocated to Partners and Assignees whose Capital Accounts are to
be reduced as a result of the allocations under Section 4.2(a), in an amount
equal to the amount by which such Capital Accounts need to be reduced and (ii)
Profits and any remaining Losses shall be allocated to Partners and Assignees
whose Capital Accounts are to be increased as a result of the allocations under
Section 4.2(a), in the proportion that the amount of the increase in such
Partner or Assignee's Capital Accounts as a result of the allocations under
Section 4.2(a) bears to the aggregate amount of the increase in all such Partner
or Assignee's Capital Accounts as a result of the allocations under Section
4.2(a).
(c) For purposes of this Section 4.2, but subject to the provisions
of Sections 4.3 and 4.5, if Losses exceed Profits for a Fiscal Year, (i) Profits
shall first be allocated to Partners and Assignees whose Capital Accounts are to
be increased as a result of the allocations under Section 4.2(a), in an amount
equal to the amount by which such Capital Accounts need to be increased and (ii)
Losses and any remaining Profits shall be allocated to Partners and Assignees
whose Capital Accounts are to be reduced as a result of the allocations under
Section 4.2(a), in the proportion that the amount of the reduction in such
Partners and Assignees' Capital Accounts as a result of the allocations under
Section 4.2(a) bears to the aggregate amount of the reduction in all such
Partners and Assignees' Capital Accounts as a result of the allocations under
Section 4.2(a).
4.3 SPECIAL ALLOCATIONS.
(a) Losses attributable to partner nonrecourse debt (as defined in
Treasury Regulation Section 1.704-2(b)(4)) shall be allocated in the manner
required by Treasury Regulation Section 1.704-2(i). If there is a net decrease
during a Taxable Year in partner nonrecourse debt minimum gain (as defined in
Treasury Regulation Section 1.704-2(i)(3)), Profits for such Taxable Year (and,
if necessary, for subsequent Taxable Years) shall be allocated to the Partners
and Assignees in the amounts and of such character as determined according to
Treasury Regulation Section 1.704-2(i)(4).
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(b) Nonrecourse deductions (as determined according to Treasury
Regulation Section 1.704-2(b)(1)) for any Taxable Year shall be allocated to
each holder of Percentage Interests ratably among such Partners and Assignees
based upon the number of outstanding Percentage Interests held by each such
Partner or Assignee immediately prior to such allocation. Except as otherwise
provided in Section 4.3(a), if there is a net decrease in the Minimum Gain
during any Taxable Year, each Partner or Assignee shall be allocated Profits for
such Taxable Year (and, if necessary, for subsequent Taxable Years) in the
amounts and of such character as determined according to Treasury Regulation
Section 1.704-2(f). This Section 4.3(b) is intended to be a minimum gain
chargeback provision that complies with the requirements of Treasury Regulation
Section 1.704-2(f), and shall be interpreted in a manner consistent therewith.
(c) If any Partner or Assignee that unexpectedly receives an
adjustment, allocation or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as
of the end of any Taxable Year, computed after the application of Sections
4.3(a) and 4.3(b) but before the application of any other provision of this
Article IV, then Profits for such Taxable Year shall be allocated to such
Partner or Assignee in proportion to, and to the extent of, such Adjusted
Capital Account Deficit. This Section 4.3(c) is intended to be a qualified
income offset provision as described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith.
(d) Profits and Losses described in Section 3.3(b)(v) shall be
allocated in a manner consistent with the manner that the adjustments to the
Capital Accounts are required to be made pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(j), (k) and (m).
(e) If, and to the extent that, any Partner or Assignee is deemed to
recognize any item of income, gain, loss, deduction or credit as a result of any
transaction between such Partner or Assignee and the Partnership pursuant to
Code Sections 1272-1274, 7872, 483, 482 or any similar provision now or
hereafter in effect, and the General Partner determines that any corresponding
Profit or Loss of the Partnership should be allocated to the Partner or Assignee
who recognized such item in order to reflect the Partner or Assignee's economic
interests in the Partnership, then the General Partner may so allocate such
Profit or Loss.
4.4 TAX ALLOCATIONS.
(a) The income, gains, losses, deductions and credits of the
Partnership will be allocated, for federal, state and local income tax purposes,
among the Partners and Assignees in accordance with the allocation of such
income, gains, losses, deductions and credits among the Partners and Assignees
for computing their Capital Accounts; except that if any such allocation is not
permitted by the Code or other applicable law, the Partnership's subsequent
income, gains, losses, deductions and credits will be allocated among the
Partners and Assignees so as to reflect as nearly as possible the allocation set
forth herein in computing their Capital Accounts.
(b) Items of Partnership taxable income, gain, loss and deduction
with respect to any property contributed to the capital of the Partnership shall
be allocated among the Partners and
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Assignees in accordance with Code Section 704(c) so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its Book Value.
(c) If the Book Value of any Partnership asset is adjusted pursuant
to the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f)
subsequent allocations of items of taxable income, gain, loss and deduction with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Book Value in the
same manner as under Code Section 704(c).
(d) Allocations of tax credits, tax credit recapture, and any items
related thereto shall be allocated to the Partners and Assignees according to
their Interests in such items as determined by the General Partner taking into
account the principles of Treasury Regulation Section 1.704-1(b)(4)(ii).
(e) Allocations pursuant to this Section 4.4 are solely for purposes
of federal, state and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or share of Profits,
Losses, Distributions or other Partnership items pursuant to any provision of
this Agreement.
4.5 CURATIVE ALLOCATIONS. The allocations set forth in Section 4.3
(the "Regulatory Allocations") are intended to comply with certain requirements
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of Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory
Allocations may not be consistent with the manner in which the Partners and
Assignees intend to allocate Profit and Loss of the Partnership or make
Partnership distributions. Accordingly, notwithstanding the other provisions of
this Article IV, but subject to the Regulatory Allocations, income, gain,
deduction, and loss shall be reallocated among the Partners and Assignees so as
to eliminate the effect of the Regulatory Allocations and thereby cause the
respective Capital Accounts of the Partners and Assignees to be in the amounts
(or as close thereto as possible) they would have been if Profit and Loss (and
such other items of income, gain, deduction and loss) had been allocated without
reference to the Regulatory Allocations. In general, the Partners and Assignees
anticipate that this will be accomplished by specially allocating other Profit
and Loss (and such other items of income, gain, deduction and loss) among the
Partners and Assignees so that the net amount of the Regulatory Allocations and
such special allocations to each such Partner or Assignee is zero. In addition,
if in any Fiscal Year or Fiscal Period there is a decrease in partnership
minimum gain, or in partner nonrecourse debt minimum gain, and application of
the minimum gain chargeback requirements set forth in Section 4.3(a) or Section
4.3(b) would cause a distortion in the economic arrangement among the Partners
and Assignees, the Partners and Assignees may, if they do not expect that the
Partnership will have sufficient other income to correct such distortion,
request the Internal Revenue Service to waive either or both of such minimum
gain chargeback requirements. If such request is granted, this Agreement shall
be applied in such instance as if it did not contain such minimum gain
chargeback requirement.
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4.6 INDEMNIFICATION AND REIMBURSEMENT FOR PAYMENTS ON BEHALF OF A
PARTNER OR ASSIGNEE. Except as otherwise provided in Section 15.11, if the
Partnership is obligated to pay any amount to a Governmental Entity (or
otherwise makes a payment to a Governmental Entity) that is specifically
attributable to a Partner or Assignee or a Partner or Assignee's status as such
(including federal withholding taxes, state personal property taxes, and state
unincorporated business taxes), then such Person shall indemnify the Partnership
in full for the entire amount paid (including interest, penalties and related
expenses). The General Partner may offset Distributions to which a Person is
otherwise entitled under this Agreement against such Person's obligation to
indemnify the Partnership under this Section 4.6. A Partner or Assignee's
obligation to make contributions to the Partnership under this Section 4.6 shall
survive the termination, dissolution, liquidation and winding up of the
Partnership, and for purposes of this Section 4.6, the Partnership shall be
treated as continuing in existence. The Partnership may pursue and enforce all
rights and remedies it may have against each Partner or Assignee under this
Section 4.6, including instituting a lawsuit to collect such contribution with
interest calculated at a rate equal to the Base Rate plus three percentage
points per annum (but not in excess of the highest rate per annum permitted by
law).
ARTICLE V
MANAGEMENT
5.1 AUTHORITY OF GENERAL PARTNER. Except for situations in which the
approval of the Partners is specifically required by this Agreement, but subject
to the rights of the Limited Partners to remove the General Partner pursuant to
Section 12.2 (a) the General Partner shall conduct, direct and exercise full
control over all activities of the Partnership and (b) all management powers
over the business and affairs of the Partnership shall be exclusively vested in
the General Partner. Without limiting the generality of the foregoing, (i) the
General Partner shall have sole and complete discretion in determining whether
to issue Equity Securities, the number of Equity Securities to be issued at any
particular time, the Capital Contribution or purchase price for any Equity
Securities issued, and all other terms and conditions governing the issuance of
Equity Securities and (ii) subject to the provisions of Section 13.9, the
General Partner may in its sole and complete discretion enter into, approve, and
consummate any merger, consolidation, sale of all or any part of its assets or
other extraordinary transaction, and execute and deliver on behalf of the
Partnership or the Partners and Assignees any agreement, document and instrument
in connection therewith (including amendments, if any, to this Agreement or
adoptions of new constituent documents) without the approval or consent of any
Partner or Assignee. No Limited Partner shall have the authority to bind the
Partnership, unless such authority has been granted to such Limited Partner by
the General Partner.
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5.2 ACTIONS REQUIRING APPROVAL OF LIMITED PARTNERS. Nothing in
Section 5.1 shall give the General Partner the authority to take any action
requiring the approval of the Limited Partners pursuant to Sections 9.1 and 9.2
without obtaining such approval.
5.3 PARTNERSHIP QUALIFICATIONS AND FILINGS. The General Partner
shall cause to be filed such other certificates or documents as may be
determined by the General Partner in its sole discretion to be necessary or
appropriate for the continuation, qualification and operation of a limited
partnership in the State of Pennsylvania and any other jurisdiction in which the
Partnership may elect to do business. Subject to applicable law, the General
Partner may omit from any and all filings in, and reports to, any state, and
from all amendments thereto, the names and addresses of the Partners,
information relating to the Partners' Capital Contributions and shares of
Profits, Losses and information relating to compensation of the Partners, or may
state such information in the aggregate rather than with respect to each
individual Partner. The General Partner shall not be required to deliver or
mail a copy of the Certificate of Limited Partnership or any amendment thereto
to any Limited Partner. Notwithstanding any of the foregoing provisions, the
General Partner shall on a timely basis make all reports or filings which are
necessary to preserve the limited liability of the Limited Partners under
applicable law.
5.4 RELIANCE BY THIRD PARTIES. Any other provision of this Agreement
to the contrary notwithstanding, no lender or purchaser (including any purchaser
of property from the Partnership) or other Person dealing with the Partnership,
shall be required to verify any representation by the General Partner as to the
extent of the interest in the assets of the Partnership that the General Partner
is entitled to encumber, sell or otherwise use. Any such lender, purchaser or
other Person shall be entitled to rely exclusively on the representations of the
General Partner as to its authority to enter into such financing or sale
arrangements and shall be entitled to deal with the General Partner as if it
were the sole party in interest therein, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies that may be
available against such lender, purchaser or other Person to contest, negate or
disaffirm any action of the General Partner in connection with any sale or
financing. In no event shall any person dealing with the General Partner or the
General Partner's representative with respect to any business or property of the
Partnership be obligated to inquire into the necessity or expedience of any act
or action of the General Partner or the General Partner's representative. Every
contract, agreement, deed, mortgage, security agreement, promissory note or
other instrument or document executed by the General Partner or the General
Partner's representative with respect to any business or property of the
Partnership shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of the execution or
delivery thereof this Agreement was in full force and effect, (b) such
instrument or document was duly executed according to this Agreement and is
binding upon the Partnership and (c) the General Partner or the General
Partner's representative was duly authorized and empowered to execute and
deliver any and every such instrument or document for and on behalf of the
Partnership.
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5.5 COMPENSATION AND REIMBURSEMENT OF GENERAL PARTNER.
(a) Except as provided in this Section 5.5 or elsewhere in this
Agreement, the General Partner shall not be compensated for its services as
General Partner to the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis for
(i) all actual out-of-pocket expenses, disbursements and advances it pays or
incurs in connection with the formation and business of the Partnership,
including all expenses, disbursements and advances for legal, accounting,
printing and banking matters, consultants and other third parties, reasonable
travel expenses, and filing fees, and (ii) that portion of the General Partner's
legal and accounting expenses, telephone, secretarial, travel and entertainment
expenses, office rent and other office expenses, salaries and other compensation
expenses of employees, and other expenses necessary or appropriate to the
conduct of the Partnership's business which is properly allocable to the
Partnership. The General Partner shall determine the expenses which are
allocable to the Partnership in a reasonable manner.
5.6 OUTSIDE ACTIVITIES.
(a) The General Partner, its Affiliates and each of their respective
stockholders, directors, officers, controlling persons, partners and employees
may have business Interests and engage in business activities in addition to
those relating to the Partnership, except as otherwise agreed by such parties.
Neither the Partnership nor any Partner shall have any rights by virtue of this
Agreement or the partnership relationship created hereby in any such business
Interests or activities of any such Person. The General Partner shall devote to
the management of the Partnership only such time as it determines is necessary
or appropriate to cause the affairs of the Partnership to be conducted in an
efficient and businesslike manner.
(b) No Affiliate of the General Partner shall be obligated to present
any particular investment or business opportunity to the Partnership even if the
opportunity is of a character which, if presented to the Partnership, could be
undertaken by the Partnership. Each Affiliate of the General Partner shall have
the right to undertake any such opportunity for itself for its own account or on
behalf of another or to recommend any such opportunity to other Persons.
5.7 LOANS AND GUARANTEES BY THE GENERAL PARTNER. The General Partner
or any of its Affiliates may lend to the Partnership funds needed by the
Partnership for such periods of time as the General Partner may determine;
provided that the terms of any such loan shall not be less favorable to the
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Partnership than would be available to the Partnership (without reference to the
General Partner's financial condition or guaranties) from unrelated lenders. In
addition, the General Partner may guarantee the payment or collection of any
amounts owed by the Partnership.
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5.8 DETERMINATIONS BY THE GENERAL PARTNER.
(a) Whenever this Agreement or any other agreement contemplated
herein provides that the General Partner shall act in a manner which is, or
provide terms which are, fair and reasonable to the Partnership or any Limited
Partner, the General Partner shall determine such appropriate action or provide
such terms considering, in each case, the relative Interests of each party to
such agreement, transaction or situation and the benefits and burdens relating
to such Interests, any customary or accepted industry practices, and any
applicable United States generally accepted accounting practices or principles.
(b) So long as the General Partner acts in good faith, the
resolution, action or terms so made, taken or provided by the General Partner
shall not constitute a breach of this Agreement or any other agreement
contemplated herein.
5.9 PURCHASE OF PERCENTAGE INTERESTS. The General Partner may cause
the Partnership to purchase or otherwise acquire Percentage Interests, or may
purchase or otherwise acquire Percentage Interests on behalf of the Partnership.
As long as such Percentage Interests are owned by or on behalf of the
Partnership, such Percentage Interests shall not be considered outstanding for
any purpose. The General Partner and its Affiliates may also purchase or
otherwise acquire, or sell or otherwise dispose of, Percentage Interests for
their own account (or as agent) and shall be entitled to exercise all rights of
a Limited Partner with respect to such Percentage Interests.
5.10 INDEMNIFICATION.
(a) The Partnership shall indemnify and hold harmless the General
Partner and each Affiliate, officer, director, controlling person, partner,
employee or shareholder of the General Partner ("Indemnified Person") from and
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against any and all losses, claims, damages, liabilities, expenses (including
reasonable legal fees and expenses), judgments, fines, settlements and other
amounts relating to any and all claims, demands, actions, suits or proceedings,
whether civil, criminal, administrative or investigative, which relate in any
way to the General Partner's status or activities of the General Partner or to
the Partnership's property, business or affairs ("Claims"). An Indemnified
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Person's expenses paid or incurred in defending itself against any Claim shall
be reimbursed as paid or incurred. A Person shall be considered an Indemnified
Person whether or not such Person has the status required to be an Indemnified
Person at the time any such Claim is made or maintained as long as such person
had the status of an Indemnified Person at the time the events which gave rise
to the Claim occurred. This Section 5.10 shall not apply with respect to any
Indemnified Person for that portion of any Claim determined by the final
decision (from which an appeal cannot be taken or is not taken on a timely
basis) of a court of competent jurisdiction to have been caused by his or its
gross negligence, willful misconduct or knowing violation of law. Any payments
made to or on behalf of a Person who is later determined not to be entitled to
such payments shall be refunded to the Partnership promptly following such
determination. Nothing contained in this Section 5.10 shall obligate any Limited
Partner to pay any amount to the Partnership or to any Indemnified Person in
excess of his Capital Contribution.
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(b) The right to indemnification and the advancement of expenses
conferred in this Section 5.10 shall not be exclusive of any other right which
any Person may have or hereafter acquire under any statute, agreement, vote of
Partners or otherwise.
(c) The Partnership may maintain insurance, at its expense, to
protect any Person against any expense, liability or loss, to the extent that
the Partnership would have the power to indemnify such Person against such
expense, liability or loss under the Pennsylvania Act.
5.11 LIMITATION OF LIABILITY. Except as provided in Section 5.10, an
Indemnified Person shall not be liable to the Partnership or any Partner for any
act or omission performed or omitted by such Person pursuant to authority
granted to such Person by this Agreement; provided that such limitation of
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liability shall not apply to the extent the act or omission was attributable to
such Person's negligence, willful misconduct or knowing violation of law. The
General Partner may exercise any of the powers granted to it by this Agreement
and perform any of the duties imposed upon it hereunder either directly or by or
through its agents, and the General Partner shall not be responsible for any
misconduct or negligence on the part of any such agent appointed by the General
Partner (so long as such agent was selected in good faith and with due care) to
the extent that such agent's misconduct or negligence is not caused by and does
not arise out of the General Partner's misconduct or negligence in supervising
the activities of such agent.
ARTICLE VI
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
6.1 LIMITATION OF LIABILITY. Except as provided in this Agreement or
in the Pennsylvania Act, the Limited Partners shall have no liability to the
Partnership or any other Partner.
6.2 MANAGEMENT OF BUSINESS. Except for a Limited Partner's rights to
vote in Section 9.1(a) and to vote for the removal of the General Partner
pursuant to Section 12.2, no Limited Partner shall take part in the operation,
management or control (within the meaning of the Pennsylvania Act) of the
Partnership's business or transact any business in the Partnership's name,
unless such Limited Partner is a Person employed or engaged to transact any such
business by or on behalf of the General Partner or the Partnership. The
transaction of any such business by a Limited Partner employed or engaged to do
so by or on behalf of the General Partner or the Partnership shall not be deemed
to constitute participation in control of the Partnership and shall not affect,
impair or eliminate the limitations on the liability of a Limited Partner under
this Agreement.
6.3 NO RIGHT OF PARTITION. No Limited Partner shall have the right
to seek or obtain partition by court decree or operation of law of any
Partnership property, or the right to own or use particular or individual assets
of the Partnership.
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6.4 OUTSIDE ACTIVITIES.
(a) A Limited Partner, its Affiliates and each of their respective
stockholders, directors, officers, controlling persons, partners and employees
may have business Interests and engage in business activities in addition to
those relating to the Partnership, except as otherwise agreed by such parties.
Neither the Partnership nor any of the other Limited Partners shall have any
rights by virtue of this Agreement in any business ventures of any Limited
Partner.
(b) No Affiliate of a Limited Partner or any of its respective
stockholders, directors, officers, controlling persons, partners and employees
shall be obligated to present any particular investment or business opportunity
to the Partnership even if the opportunity is of a character which, if presented
to the Partnership, could be undertaken by the Partnership. The Affiliates of a
Limited Partner and its respective stockholders, directors, officers,
controlling persons, partners and employees shall have the right to undertake
any such opportunity for itself for its own account or on behalf of another or
to recommend any such opportunity to other Persons.
ARTICLE VII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
7.1 RECORDS AND ACCOUNTING. The Partnership shall keep, or cause to
be kept, appropriate books and records with respect to the Partnership's
business, including all books and records necessary to provide any information,
lists and copies of documents required to be provided pursuant to Section 7.3 or
pursuant to applicable laws. All matters concerning (a) the determination of
the relative amount of allocations and distributions among the Partners and
Assignees pursuant to Articles III and IV and (b) accounting procedures and
determinations, and other determinations not specifically and expressly provided
for by the terms of this Agreement, shall be determined by the General Partner,
whose determination shall be final and conclusive as to all of the Partners and
Assignees absent manifest clerical error.
7.2 FISCAL YEAR. The Fiscal Year of the Partnership shall end on
December 31 of each year or such other annual accounting period as may be
established by the General Partner.
7.3 REPORTS.
(a) The Partnership shall deliver or cause to be delivered to each
Partner, within 120 days after the end of each Fiscal Year, an annual report
containing the following:
(i) consolidated statements of income and cash flows of the
Partnership and its Subsidiaries for such Fiscal Year, and a
consolidated balance sheet of the Partnership and its
Subsidiaries as of the end of such Fiscal Year, all prepared in
accordance with generally accepted accounting principals,
consistently applied, and audited by an independent accounting
firm of
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recognized national standing and a copy of such firm's annual
management letter regarding internal controls and other matters
to the General Partner;
(ii) a statement of changes in the Partner's equity and the
Partner's Capital Account balance for such Fiscal Year; and
(iii) a general description of the Partnership's activities during
such Fiscal Year.
(b) The Partnership shall, to the extent required by the
Pennsylvania Act, deliver or cause to be delivered to each Partner or Assignee
with reasonable promptness, such other information and financial data concerning
the Partnership and its Subsidiaries as any Partner or Assignee shall from time
to time reasonably request; provided that furnishing such information shall not
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be financially burdensome on the Partnership, the General Partner or their
Subsidiaries or unreasonably time consuming for the employees of the
Partnership, the General Partner or their Subsidiaries.
(c) The Partnership shall use reasonable efforts to deliver or
cause to be delivered, within 75 days after the end of each Fiscal Year, to each
Person who was a Partner or Assignee at any time during such Fiscal Year all
information necessary for the preparation of such Person's United States federal
and state income tax returns.
7.4 TRANSMISSION OF COMMUNICATIONS. Each Person that owns or
controls Percentage Interests on behalf of, or for the benefit of, another
Person or Persons shall be responsible for conveying any report, notice or other
communication received from the General Partner to such other Person or Persons.
ARTICLE VIII
TAX MATTERS
8.1 PREPARATION OF TAX RETURNS. The Partnership shall arrange for
the preparation and timely filing of all returns required to be filed by the
Partnership.
8.2 TAX ELECTIONS. The Taxable Year shall be the Fiscal Year set
forth in Section 7.2. The General Partner shall, in its sole discretion,
determine whether to make or revoke any available election pursuant to the Code;
provided that upon the request of any Partner, the Partnership shall make a Code
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Section 754 election. Each Partner or Assignee will upon request supply any
information necessary to give proper effect to such election. The General
Partners shall not make an election pursuant to Treasury Regulation 301.7701-1
to be taxed as an association.
8.3 TAX CONTROVERSIES.
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The General Partner is hereby designated the Tax Matters Partner and
is authorized and required to represent the Partnership (at the Partnership's
expense) in connection with all examinations of the Partnership's affairs by tax
authorities, including resulting administrative and judicial proceedings, and to
expend Partnership funds for professional services and reasonably incurred in
connection therewith. Each Partner or Assignee agrees to cooperate with the
Partnership and to do or refrain from doing any or all things reasonably
requested by the Partnership with respect to the conduct of such proceedings.
The Tax Matters Partners shall keep all Partners and Assignees fully informed of
the progress of any examinations, audits or other proceedings, and all Partners
and Assignees shall have the right to participate in any such examinations,
audits or other proceedings. Notwithstanding the foregoing, the Tax Matters
Partners shall not settle or otherwise compromise any issue in any such
examination, audit or other proceeding without first obtaining approval of the
Partners holding a Majority in Interest.
ARTICLE IX
VOTING; AMENDMENTS
9.1 VOTING RIGHTS.
(a) This Agreement provides for voting rights in favor of the
Partners. With respect to any vote of the Partners, each Partner shall be
entitled to one vote for each Percentage Interest held by such Partner.
(b) Anything herein to the contrary notwithstanding, the Partners may
dissolve the Partnership upon the affirmative vote of the Partners owning a
Majority in Interest.
(c) At the General Partner's election, any action that may be taken
at a Partners' meeting may be taken without a meeting if the General Partner
solicits written consents to the action, and if within 90 days after delivery of
the request for written consents, such consents are received from Partners
owning not less than the minimum number of Percentage Interests that would be
necessary to authorize or take such action at a meeting. A written consent to
the taking of any action shall have no force and effect if it is received more
than 90 days after the date of the General Partner's delivery of the written
request soliciting consents to such action. The General Partner shall be solely
responsible for conducting the solicitation of consents and for determining the
validity and effect of responses to the solicitation.
(d) With respect to Percentage Interests that are held for a Person's
account by another Person (such as a broker, dealer, bank, trust company or
clearing corporation, or an agent of any of the foregoing) in whose name
ownership is registered, the Partnership may assume without inquiry that such
broker, dealer or other agent, in exercising any right in respect of such
Percentage Interests on any matter, is exercising such rights according to the
direction of the Person on whose behalf such broker, dealer or other agent is
holding such Percentage Interests.
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9.2 AMENDMENTS.
(a) The General Partner (pursuant to its powers of attorney from the
Limited Partners as provided in Section 15.1), without the consent of any
Limited Partner, may amend any provision of this Agreement, and execute, swear
to, acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
(i) a change in the name of the Partnership or the location of
the principal place of business of the Partnership;
(ii) the admission, substitution, removal or withdrawal of
Partners in accordance with this Agreement;
(iii) a change that in the General Partner's reasonable judgment
does not adversely affect any Partner or Assignee in any material respect in its
capacity as an owner of Percentage Interests and is either (A) necessary or
desirable to satisfy any requirements, conditions or guidelines contained in any
opinion, directive, order, ruling or regulation of any United States federal or
state agency or judicial authority or contained in any United States federal or
state statute or (B) required by this Agreement; or
(iv) a change that in the General Partner's reasonable judgment
does not adversely affect any Partner or Assignee in any material respect in its
capacity as an owner of Percentage Interests and (i) cures any ambiguity or (ii)
corrects or supplements any provisions in this agreement.
(b) In all cases other than those provided in Section 9.2(a) above,
this Agreement may be amended upon the consent of the General Partner and the
affirmative vote of the Partners owning a Majority in Interest.
ARTICLE X
TRANSFER OF PERCENTAGE INTERESTS
10.1 TRANSFER IN GENERAL. NO PARTNER OR ASSIGNEE MAY TRANSFER ALL OR
ANY PORTION OF SUCH PARTNER OR ASSIGNEE'S INTEREST IN THE PARTNERSHIP WITHOUT
THE PRIOR WRITTEN CONSENT OF THE GENERAL PARTNER IF SUCH TRANSFER WOULD (A)
CAUSE THE PARTNERSHIP TO HAVE MORE THAN 100 PARTNERS WITHIN THE MEANING OF
TREASURY REGULATION SECTION 1.7704-1(H) OR (B) CAUSE THE PARTNERSHIP TO HAVE TO
REGISTER AS AN INVESTMENT PARTNERSHIP FOR PURPOSES OF THE INVESTMENT PARTNERSHIP
ACT OF 1940, AS AMENDED.
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10.2 ASSIGNEE'S RIGHTS.
(a) A permitted transfer of a Percentage Interest shall be effective as
of the date of assignment and compliance with the conditions to such transfer
and such transfer shall be shown on the books and records of the Partnership.
Profits, Losses and other Partnership items shall be allocated between the
transferor and the Assignee according to Code Section 706. Distributions made
before the effective date of such transfer shall be paid to the transferor, and
Distributions made after such date shall be paid to the Assignee.
(b) Unless and until an Assignee becomes a Partner pursuant to Article
XI, the Assignee shall not be entitled to any of the rights granted to a Partner
hereunder or under applicable law, other than the rights granted specifically to
Assignees pursuant to this Agreement and to have the other rights granted to
Assignees pursuant to the Pennsylvania Act; provided that, without relieving the
--------
transferring Partner or Assignee from any such limitations or obligations as
more fully described in Section 10.3, such Assignee shall be bound by any
limitations and obligations of a Partner or Assignee contained herein that a
Partner would be bound on account of the Assignee's Percentage Interest
(including the obligation (if any) to make Capital Contributions on account of
such Percentage Interest).
10.3 ASSIGNOR'S RIGHTS AND OBLIGATIONS. Any Partner who shall transfer any
Percentage Interests or other interest in the Partnership shall cease to be a
Partner with respect to such Percentage Interests or other interest and shall no
longer have any rights or privileges of a Partner with respect to such
Percentage Interests or other interest (it being understood, however, that the
applicable provisions of Section 6.1 shall continue to inure to such Person's
benefit), except that unless and until the Assignee is admitted as a substituted
Partner in accordance with the provisions of Article XI (the "Admission Date"),
--------------
(a) such assigning Partner shall retain all of the duties, liabilities and
obligations of a Partner with respect to such Percentage Interests or other
interest, including, without limitation, the obligation (together with its
Assignee pursuant to Section 10.2(b)) to make and return Capital Contributions
on account of such Percentage Interests or other interest pursuant to the terms
of this Agreement and (ii) the General Partner may, in its sole discretion,
reinstate all or any portion of the rights and privileges of such Partner with
respect to such Percentage Interests or other interest for any period of time
prior to the Admission Date. Nothing contained herein shall relieve any Partner
who transfers any Percentage Interests or other interest in the Partnership from
any liability of such Partner to the Partnership with respect to such Percentage
Interests or other interest that may exist on the Admission Date or that is
otherwise specified in the Pennsylvania Act and incorporated into this
Agreement.
10.4 PROHIBITED TRANSFERS. Notwithstanding anything contained herein to
the contrary, no Percentage Interest shall be transferred or assigned if such
transfer would result in the Partnership (i) being treated as a "publicly traded
partnership" within the meaning of Section 7704 of the Code, (ii) having more
than 100 partners, as determined for purposes of Treasury Regulation Section
1.7704-1(h), or (iii) having more than 100 beneficial owners for purposes of the
Investment Company Act of 1940, as amended. For purposes of the preceding
sentence, the General Partner
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shall be permitted to rely on representations and other documentation furnished
by the transferor partner and the transferee in connection with the proposed
transfer.
ARTICLE XI
ADMISSION OF PARTNERS
11.1 SUBSTITUTED LIMITED PARTNERS. In connection with the transfer of a
Percentage Interest of a Limited Partner, a Person may request admission as a
Substituted Partner in a manner prescribed by the General Partner. Such Person
shall become a Substituted Partner on the date on which the General Partner
consents thereto and such admission is shown on the books and records of the
Partnership.
11.2 ADDITIONAL LIMITED PARTNERS. A Person may be admitted to the
Partnership as an Additional Partner only upon furnishing to the General Partner
(a) a letter of acceptance, in form satisfactory to the General Partner, of all
the terms and conditions of this Agreement, including the power of attorney
granted in Section 15.1, and (b) such other documents or instruments as may be
necessary or appropriate to effect his admission as a Limited Partner. Such
admission shall become effective on the date on which the General Partner
determines in its sole discretion that such conditions have been satisfied and
when any such admission is shown on the books and records of the Partnership.
11.3 ADMISSION OF A SUCCESSOR GENERAL PARTNER. A Person shall be admitted
as a Successor General Partner if and only if (a) the Person is the transferee
of all of the General Partner's General Percentage Interest or (b) the Person is
elected to be a Successor General Partner in the manner described in Section
12.3 or 13.2.
ARTICLE XII
WITHDRAWAL OR REMOVAL OF PARTNERS
12.1 WITHDRAWAL OF GENERAL PARTNER. The General Partner shall not withdraw
as the Partnership's general partner except as follows:
(a) The General Partner shall be deemed to have withdrawn as the
Partnership's general partner upon the effective date of the transfer of all of
its General Percentage Interest.
(b) The General Partner shall have no right to withdraw as the
Partnership's general partner without the consent of the Partners owning a
Majority in Interest. If permitted to withdraw as the Partnership's general
partner, the General Partner may withdraw by delivering a notice of withdrawal
to the Partners. Such notice shall state the effective date of the General
Partner's withdrawal, which date shall be not less than 90 days subsequent to
the date such notice
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is mailed and shall set forth rules and procedures for the nomination and
election of a Successor General Partner pursuant to Section 12.3. Unless such
notice is earlier revoked, the General Partner shall be deemed to have withdrawn
as the Partnership's general partner upon the earlier of (i) the effective date
stated in such notice or (ii) the date a Successor General Partner is admitted
to the Partnership pursuant to Section 11.3.
(c) If the General Partner withdraws as the Partnership's general
partner in violation of this Section 12.1, the damages for which it may be held
liable under the Pennsylvania Act (or otherwise as a result of such withdrawal)
shall be limited to the forfeiture of its General Percentage Interest.
12.2 REMOVAL OF GENERAL PARTNER. The General Partner may be removed at any
time by the affirmative vote of Limited Partners owning a majority of Percentage
Interests held by all Limited Partners.
12.3 ELECTION OF SUCCESSOR GENERAL PARTNER. If the General Partner
withdraws from the Partnership pursuant to Section 12.1(b) or is removed
pursuant to Section 12.2, the Partners may elect a Successor General Partner as
the General Partner, by the affirmative vote of Limited Partners owning a
Majority in Interest (or such greater percentage as required by applicable law)
of the Percentage Interests owned by all Limited Partners. Any Person elected by
the Partners to be Successor General Partner shall be admitted to the
Partnership as Successor General Partner only upon the Partnership's receipt of
a written assumption by such Person of all of the General Partner's rights and
obligations hereunder (including the obligation to purchase the former General
Partner's Percentage Interest pursuant to Section 12.4). If a Successor General
Partner is admitted to the Partnership pursuant to this Section 12.3 on or
before the effective date specified in the General Partner's notice of
withdrawal pursuant to Section 12.1(b), such Successor General Partner shall
continue the Partnership's business according to this Agreement.
12.4 PURCHASE OF GENERAL PARTNER'S PERCENTAGE INTEREST. Within 30 days
following the admission of a Successor General Partner to the Partnership
pursuant to Section 12.3 or 13.2, the former General Partner may, at its option,
elect to sell its Percentage Interest to the Successor General Partner. Such
election shall be made by delivering to the Successor General Partner a written
notice reasonably indicating that the former General Partner is electing to sell
its Percentage Interest pursuant to this Section 12.4. If the former General
Partner properly makes such election, the Successor General Partner shall
purchase such interest from the former General Partner for a purchase price,
payable in cash, within 120 days after the effective date of the admission of
the Successor General Partner as General Partner, equal to the Fair Market Value
of the former General Partner's Interest as of the time of such General
Partner's withdrawal or removal. For purposes of determining the Fair Market
Value of the former General Partner's Interest, the Fair Market Value of the
Partnership's assets shall be determined according to Article XIV.
12.5 FORMER GENERAL PARTNER'S LIABILITIES. The General Partner shall not
be liable for Partnership debts and other liabilities and obligations of the
Partnership incurred after the effective
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date of the General Partner's removal or withdrawal as General Partner, but
shall continue to be liable for Partnership debts and other liabilities and
obligations of the Partnership incurred before such effective date.
12.6 WITHDRAWAL OF LIMITED PARTNERS. No Limited Partner shall have any
right to withdraw from the Partnership without the prior written consent of the
General Partner. Upon a transfer of all of a Limited Partner's Percentage
Interests, such Limited Partner shall cease to be a Limited Partner; provided
--------
that the transferor shall not be released from liability to the Partnership for
- ----
(a) any materially false statement made, or caused to be made, by such
transferor in the Certificate of Limited Partnership or (b) any obligation of
such transferor to contribute cash or other property to the Partnership.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
13.1 DISSOLUTION. The Partnership shall not be dissolved by the admission
of Additional Partners or Substituted Partners, by the admission of a Successor
General Partner, or by the withdrawal or removal of the General Partner (if
there is a Successor General Partner), or by the death, incapacity, dissolution,
bankruptcy, insolvency or termination of a Limited Partner. The Partnership
shall dissolve, and its affairs shall be wound up, upon:
(a) the affirmative vote of the Partners owning a Majority in
Interest as provided in Section 9.1(a);
(b) the withdrawal or removal of the General Partner pursuant to
Section 12.1(b) or Section 12.2, respectively, if the Limited Partners have not
elected a Successor General Partner to continue the Partnership's business as
provided by Section 12.3;
(c) the insolvency or bankruptcy of the General Partner; or
(d) the occurrence of any event not specified in Section 13.1(b) or
(c) above that results in the General Partner ceasing to be the General Partner
under the Pennsylvania Act.
13.2 CONTINUATION AFTER DISSOLUTION. Within 90 days following a
dissolution of the Partnership pursuant to Section 13.1(c) or (d), pursuant to
rules and procedures established by the Liquidator pursuant to Section 13.3(b),
the Limited Partners may elect to reconstitute the Partnership and continue its
business according to this Agreement upon the admission to the Partnership of a
Successor General Partner elected by the affirmative vote of Limited Partners
owning a Majority in Interest (or such greater percentage as required by
applicable law). Any Person elected by the Limited Partners to be a Successor
General Partner shall be admitted to the Partnership as Successor General
Partner only upon the Partnership's receipt of a written assumption by such
Person of all of
25
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the former General Partner's rights and obligations hereunder (including the
obligation to purchase the General Partner's Percentage Interest pursuant to
Section 12.4). Unless a Successor General Partner is admitted to the Partnership
within 90 days after dissolution, the Partnership shall be liquidated pursuant
to Section 13.3. If a Successor General Partner is admitted to the Partnership
pursuant to this Section 13.2 within 90 days after dissolution, then:
(a) the reconstituted partnership shall continue until dissolved
according to this Article XIII; and
(b) all necessary steps shall be taken to cancel this Agreement and
the Certificate of Limited Partnership and to enter into a new partnership
agreement and certificate of limited partnership, and the Successor General
Partner may for this purpose exercise the powers of attorney granted the General
Partner pursuant to Section 15.1; provided that the right of the Limited
Partners set forth above to elect a Successor General Partner and to
reconstitute and to continue the business of the Partnership shall not exist and
may not be exercised unless the Partnership has received an opinion of counsel
that (i) the exercise of the right would not result in the loss of limited
liability of any Person who is a Limited Partner and (ii) neither the
Partnership nor the reconstituted partnership would be classified as other than
a partnership for United States federal income tax purposes upon the exercise of
such right to continue.
13.3 LIQUIDATION.
(a) Upon dissolution of the Partnership, the General Partner shall be
the liquidator (the "Liquidator"), unless and until a successor Liquidator is
----------
appointed as provided herein. The Liquidator shall agree not to resign at any
time without 30 days' prior written notice. The Liquidator, if other than the
General Partner, may be removed at any time, with or without cause, by notice of
removal and appointment of a successor Liquidator approved by the holders of a
Majority in Interest. Within 30 days following the occurrence of any Event of
Withdrawal with respect to the Liquidator, a successor Liquidator may be elected
by the holders of a Majority in Interest. The successor Liquidator shall succeed
to all rights, powers and duties of the former Liquidator. The right to appoint
a successor or substitute Liquidator in the manner provided herein shall be
recurring and continuing for so long as the functions and services of the
Liquidator are authorized to continue under the provisions hereof, and every
reference herein to the Liquidator shall be deemed to refer also to any such
successor or substitute Liquidator appointed in the manner herein provided.
Except as expressly provided in this Article XIII, the Liquidator appointed in
the manner provided herein shall have and may exercise, without further
authorization or consent of any of the parties hereto, all of the powers
conferred upon the General Partner under the terms of this Agreement (but
subject to all of the applicable limitations, contractual and otherwise, upon
the exercise of such powers to the extent necessary or desirable in the good
faith judgment of the Liquidator to carry out the duties and functions of the
Liquidator hereunder for and during such period of time as shall be reasonably
required in the good faith judgment of the Liquidator to complete the winding up
and liquidation of the Partnership as provided for herein). The Liquidator shall
receive as compensation for its services (i) if the Liquidator is the General
Partner, the compensation and reimbursements specified in Section 5.5, or (ii)
if the Liquidator is not the General
26
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Partner, a reasonable fee plus out-of-pocket costs or such other compensation as
the holders of a Majority in Interest may approve.
(b) If the Partnership is dissolved pursuant to Section 13.1(c),
the Liquidator shall establish reasonable rules and procedures for the
nomination and election of a Successor General Partner pursuant to Section 13.2.
Pending such election, the Liquidator shall continue to operate the
Partnership's business in the ordinary course with a view to conserving the
Partnership's assets. If no Successor General Partner is admitted to the
Partnership pursuant to Section 13.2 within the time period specified therein,
the Liquidator shall proceed with the liquidation of the Partnership's assets as
provided in Section 13.3(c).
(c) The Liquidator shall liquidate the assets of the Partnership
and apply and distribute the proceeds of such liquidation in the following order
of priority, unless otherwise required by mandatory provisions of applicable
law:
(i) First, to the payment of the Partnership's debts and
obligations to its creditors, including sales commissions
and other expenses incident to any sale of the assets of the
Partnership.
(ii) Second, to the establishment of and additions to such
reserves as the Liquidator may deem necessary or
appropriate.
(iii) Third, to the Partners, in accordance with Section 4.1 and
the balances set forth in the Capital Accounts of the
Partners at such time.
The reserves established pursuant to subparagraph (ii) shall be paid over by the
Liquidator to a bank or other financial institution to be held in escrow for the
purpose of paying any such contingent or unforeseen liabilities or obligations
and, at the expiration of such period as the Liquidator deems advisable, such
reserves shall be distributed in the priorities set forth in this Section
13.3(c). The parties intend that the Distributions under this Section 13.3(c) be
in compliance with the provisions of Treasury Regulation Section 1.704-
1(b)(2)(ii)(b)(2), and this Section 13.3(c) shall always be interpreted in a
manner consistent with such provisions.
13.4 DISTRIBUTION IN KIND. Notwithstanding the provisions of Section 13.3
which require the liquidation of the assets of the Partnership, but subject to
the order of priorities set forth therein, if upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole discretion, defer for a reasonable
time the liquidation of any assets except those necessary to satisfy Partnership
liabilities (other than loans to the Partnership by Partners) and reserves, and
may, in its sole discretion, distribute to the Partners, in lieu of cash, as
tenants in common and in accordance with the provisions of Section 13.3(c),
undivided interests in such Partnership assets as the Liquidator deems not
suitable for liquidation. Any such Distributions in kind shall be subject to
such conditions relating to the disposition and management of such properties as
the Liquidator deems reasonable and equitable and to any agreements governing
the
27
<PAGE>
operating of such properties at such time. Any Partnership assets distributed in
kind shall first be written up or down to their Fair Market Value, thus creating
Profit or Loss (if any), which shall be allocated in accordance with Section
4.2. The Liquidator shall determine the Fair Market Value of any property
distributed in accordance with the valuation procedures set forth in Article
XIV.
13.5 DEFICIT MAKEUP. No Partner shall have any obligation to make up any
deficit balance in its respective Capital Account, except as otherwise required
under the Pennsylvania Act.
13.6 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP. Upon the
completion of the distribution of Partnership property as provided in Sections
13.3 and 13.4, the Partnership shall be terminated, and the Liquidator (or the
Limited Partners, if necessary) shall cause the cancellation of the Certificate
of Limited Partnership and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the Commonwealth of Pennsylvania
and shall take such other actions as may be necessary to terminate the
Partnership. The Partnership shall be deemed to continue in existence for all
purposes of this Agreement until it is terminated pursuant to this Section 13.6.
13.7 REASONABLE TIME FOR WINDING UP. A reasonable time shall be allowed
for the orderly winding up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 13.3 in order to minimize any
losses otherwise attendant upon such winding up.
13.8 RETURN OF CAPITAL. The Liquidator, as such, shall not be personally
liable for the return of Capital Contributions or any portion thereof (it being
understood that any such return shall be made solely from Partnership assets).
ARTICLE XIV
VALUATION
14.1 DETERMINATION. The Fair Market Value of the assets of the
Partnership or of a Percentage Interest in the Partnership will be determined by
the General Partner (or, if pursuant to Section 13.3, the Liquidator) in its
good faith judgement in such manner as its deems reasonable and using all
factors, information and data deemed to be pertinent.
14.2 DETERMINATION OF FAIR MARKET VALUE. "Fair Market Value" of (i)
-----------------
a specific Partnership asset will mean the amount which the Partnership would
receive in an all-cash sale of such asset in an arms-length transaction with an
unaffiliated third party consummated on the day immediately preceding the date
on which the event occurred which necessitated the determination of the Fair
Market Value (and after giving effect to any transfer taxes payable in
connection with such sale); and (ii) of the Partnership will mean the amount
which the Partnership would receive in an all-cash sale of all of its assets and
businesses as a going concern in an arms-length transaction with an unaffiliated
third party consummated on the day immediately preceding the date on which the
event occurred which necessitated the determination of the Fair Market Value.
After a
28
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determination of the Fair Market Value of the Partnership is made as provided
above, the Fair Market Value of a Percentage Interest will be determined by
making a calculation reflecting the cash distributions which would be made to
the Partners and Assignees in accordance with this Agreement if the Partnership
were deemed to have received such Fair Market Value in cash and then distributed
the same to the Partners and Assignees in accordance with the terms of this
Agreement incident to the liquidation of the Partnership after payment to all of
the Partnership's creditors from such cash receipts and assuming that all of the
convertible debt and other convertible securities were repaid or converted
(whichever yields more cash to the holders of such convertible securities).
Except as otherwise provided herein or in any agreement, document or instrument
contemplated hereby, any amount to be paid under this Agreement by reference to
the Fair Market Value shall be paid in full in cash, and any Percentage Interest
being transferred in exchange therefor will be transferred free and clear of all
Liens.
ARTICLE XV
GENERAL PROVISIONS
15.1 POWER OF ATTORNEY.
(a) Each Partner or Assignee hereby constitutes and appoints the
General Partner and the liquidators, with full power of substitution, as his or
its true and lawful agent and attorney-in-fact, with full power and authority in
his or its name, place and stead, to: (i) execute, swear to, acknowledge,
deliver, file and record in the appropriate public offices (A) this Agreement,
all certificates and other instruments and all amendments thereof which the
General Partner deems appropriate or necessary to form, qualify, or continue the
qualification of, the Partnership as a limited partnership in the Commonwealth
of Pennsylvania and in all other jurisdictions in which the Partnership may
conduct business or own property; (B) all instruments which the General Partner
deems appropriate or necessary to reflect any amendment, change, modification or
restatement of this Agreement in accordance with its terms; (C) all conveyances
and other instruments or documents which the General Partner deems appropriate
or necessary to reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement, including a certificate of
cancellation; and (D) all instruments relating to the admission, withdrawal or
substitution of any Partner or Assignee pursuant to Article X or XI; and (ii)
sign, execute, swear to and acknowledge all ballots, consents, approvals,
waivers, certificates and other instruments appropriate or necessary, in the
reasonable judgment of the General Partner, to evidence, confirm or ratify any
vote, consent, approval, agreement or other action which is made or given by the
Partners hereunder or is consistent with the terms of this Agreement and/or
appropriate or necessary (and not inconsistent with the terms of this
Agreement), in the reasonable judgment of the General Partner, to effectuate the
terms of this Agreement.
(b) The foregoing power of attorney is irrevocable and coupled with
an interest, and shall survive the death, disability, incapacity, dissolution,
bankruptcy, insolvency or termination
29
<PAGE>
of any Partner or Assignee and the transfer of all or any portion of his or its
Percentage Interest and shall extend to such Partner or Assignee's heirs,
successors, assigns and personal representatives.
15.2 TITLE TO PARTNERSHIP ASSETS. Partnership assets shall be deemed
to be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Legal title to any or all Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine. The General Partner hereby declares and
warrants that any Partnership assets for which legal title is held in its name
or the name of any nominee shall be held in trust by the General Partner or such
nominee for the use and benefit of the Partnership in accordance with the
provisions of this Agreement. All Partnership assets shall be recorded as the
property of the Partnership on its books and records, irrespective of the name
in which legal title to such Partnership assets is held.
15.3 ADDRESSES AND NOTICES. Any notice, demand, request or report
required or permitted to be given or made to any Person under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class mail or by other commercially reasonable means of
written communication to the Person at his address as shown on the Partnership's
books and records. An affidavit or certificate of mailing executed by the
General Partner shall be conclusive (but not exclusive) evidence of the date and
fact of mailing of any such notice, demand, request or report. Any notice to
the General Partner or the Partnership shall be deemed given if received by the
General Partner at the principal office of the Partnership designated pursuant
to Section 2.5.
15.4 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.
15.5 CREDITORS. None of the provisions of this Agreement shall be
for the benefit of or enforceable by any creditors of the Partnership or any of
its Affiliates, and no creditor who makes a loan to the Partnership or any of
its Affiliates may have or acquire (except pursuant to the terms of a separate
agreement executed by the Partnership in favor of such creditor) at any time as
a result of making the loan any direct or indirect interest in Partnership
Profits, Losses, Distributions, capital or property other than as a creditor.
15.6 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition.
15.7 COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which together shall
constitute one and the same agreement binding on all the parties hereto.
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15.8 APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the Commonwealth of Pennsylvania or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the Commonwealth of Pennsylvania.
15.9 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
15.10 FURTHER ACTION. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking such actions
as may be necessary or appropriate to achieve the purposes of this Agreement.
15.11 EXPENSES. The Partnership shall pay, and hold the Partners and
their respective Affiliates harmless against liability for the payment of (i)
their out-of-pocket fees and expenses incurred in connection with this Agreement
and the transactions related hereto and contemplated hereby (including legal
expenses relating to this Agreement and the documents related hereto); (ii) the
reasonable fees and expenses incurred in connection with an investment or
acquisition by the Partnership or any of its Subsidiaries; (iii) the fees and
expenses incurred with respect to any amendments or waivers (whether or not the
same become effective) under or in respect of any of this Agreement or the
agreements referred to herein or contemplated hereby or thereby (including,
without limitation, in connection with any proposed merger, sale or
recapitalization of the Partnership or any of its Subsidiaries); (iv) stamp and
other taxes which may be payable in respect of the execution and delivery of
this Agreement or the issuance, delivery or acquisition of any Percentage
Interests; (v) the fees and expenses incurred with respect to the enforcement of
the rights granted under any provision of this Agreement, the Percentage
Interests, and the other agreements referred to herein or contemplated hereby or
thereby; and (vi) the reasonable fees and expenses incurred by each such Person
in any filing with any Governmental Entity with respect to its investment in the
Partnership which mentions such Person.
15.12 OFFSET. Whenever the Partnership is to pay any sum to any
Partner or Assignee or any Affiliate or related person thereof, any amounts that
such Partner or Assignee or such Affiliate or related person owes to the
Partnership may be deducted from that sum before payment.
15.13 ENTIRE AGREEMENT. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements
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or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
15.14 REMEDIES. Each Partner and Assignee shall have all rights and
remedies set forth in this Agreement and all rights and remedies which such
Person has been granted at any time under any other agreement or contract and
all of the rights which such Person has under any law. Any Person having any
rights under any provision of this Agreement or any other agreements
contemplated hereby shall be entitled to enforce such rights specifically
(without posting a bond or other security), to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law.
15.15 DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the context, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa. The use of the word "including" in
this Agreement shall be by way of example rather than by limitation. Reference
to any agreement, document or instrument means such agreement, document or
instrument as amended or otherwise modified from time to time in accordance with
the terms thereof, and if applicable hereof. Without limiting the generality of
the immediately preceding sentence, no amendment or other modification to any
agreement, document or instrument that requires the consent of any Person
pursuant to the terms of this Agreement or any other agreement will be given
effect hereunder unless such Person has consented in writing to such amendment
or modification. Wherever required by the context, references to a Fiscal Year
shall refer to a portion thereof. The use of the words "or," "either" and "any"
shall not be exclusive. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement. Wherever a conflict exists between
this Agreement and any other agreement, this Agreement shall control but solely
to the extent of such conflict.
* * * * *
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IN WITNESS WHEREOF, the undersigned have executed or caused to be
executed on their behalf this Amended and Restated Limited Partnership
Agreement as of the date first written above.
GENERAL PARTNER
---------------
ACR MANAGEMENT, L.L.C.
By: _____________________________________
Its:_____________________________________
LIMITED PARTNER
---------------
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: _____________________________________
Its: ____________________________________
<PAGE>
SCHEDULE I
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<TABLE>
<CAPTION>
Capital
Name and Address Contributions Percentage Interest
- ----------------------------------- ----------------- ------------------------
<S> <C> <C>
GENERAL PARTNER:
ACR Management, L.L.C. $885,240 1%
Two Copley Place
Boston, MA 02116
Attn: Paul Edgerley
Andrew Balson
LIMITED PARTNERS:
Anthony Crane Rental Holdings, L.P. $87,658,560 99%
Two Copley Place
Boston, MA 02116
Attn: Paul Edgerley
Andrew Balson
--------------- ------------------------
$88,543,800 100%
=============== ========================
</TABLE>
<PAGE>
SCHEDULE II
-----------
Name and Address
- ----------------
GENERAL PARTNER:
ACR Management, L.L.C. $885,240
Two Copley Place
Boston, MA 02116
Attn: Paul Edgerley
Andrew Balson
LIMITED PARTNERS:
Anthony Crane Rental $87,658,560
Holdings, L.P.
Two Copley Place
Boston, MA 02116
Attn: Paul Edgerley
Andrew Balson
<PAGE>
EXHIBIT 10.10
<PAGE>
- --------------------------------------------------------------------------------
Anthony Crane Rental, L.P.
Anthony Crane Capital Corporation
SERIES A AND SERIES B
10 3/8% SENIOR NOTES DUE 2008
INDENTURE
_____________________________
Dated as of July 22, 1998
_____________________________
State Street Bank and Trust Company
Trustee
______________
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
310 (a)(1)............................................... 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.
(a)(4)............................................... N.A.
(a)(5)............................................... 7.10
(b).................................................. 7.10
(c).................................................. N.A.
311 (a).................................................. 7.11
(b).................................................. 7.11
(c).................................................. N.A.
312 (a).................................................. 2.05
(b).................................................. 11.03
(c).................................................. 11.03
313 (a).................................................. 7.06
(b)(1)............................................... 10.03
(b)(2)............................................... 7.07
(c).................................................. 7.06;11.02
(d).................................................. 7.06
314 (a).................................................. 4.03;11.02
(b).................................................. 10.02
(c)(1)............................................... 11.04
(c)(2)............................................... 11.04
(c)(3)............................................... N.A.
(e).................................................. 11.05
(f).................................................. N.A.
315 (a).................................................. 7.01
(b).................................................. 7.05,11.02
(c).................................................. 7.01
(d).................................................. 7.01
(e).................................................. 6.11
316 (a) (last sentence).................................. 2.09
(a)(1)(A)............................................ 6.05
(a)(1)(B)............................................ 6.04
(a)(2)............................................... N.A.
(b).................................................. 6.07
(c).................................................. 2.12
317 (a)(1)............................................... 6.08
(a)(2)............................................... 6.09
(b).................................................. 2.04
318 (a).................................................. 11.01
(b).................................................. N.A.
(c).................................................. 11.01
</TABLE>
N.A. means not applicable
*This Cross Reference Table is not part of the Indenture
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE......................................................... 1
Section 1.01. Definitions..................................................................................... 1
Section 1.02. Other Definitions............................................................................... 19
Section 1.03. TIA definitions................................................................................. 20
Section 1.04. Rules of Construction........................................................................... 20
ARTICLE 2. THE NOTES.......................................................................................... 21
Section 2.01. Form and Dating................................................................................. 21
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............................................................................... 35
Section 2.08. Outstanding Notes............................................................................... 36
Section 2.09. Treasury Notes.................................................................................. 36
Section 2.10. Temporary Notes................................................................................. 36
Section 2.11. Cancellation.................................................................................... 36
Section 2.12. Defaulted Interest.............................................................................. 37
ARTICLE 3. REDEMPTION AND PREPAYMENT.......................................................................... 37
Section 3.01. Notices to Trustee.............................................................................. 37
Section 3.02. Selection of Notes to Be Redeemed............................................................... 37
Section 3.03. Notice of Redemption............................................................................ 37
Section 3.04. Effect of Notice of Redemption.................................................................. 38
Section 3.05. Deposit of Redemption Price..................................................................... 38
Section 3.06. Notes Redeemed in Part.......................................................................... 39
Section 3.07. Optional Redemption............................................................................. 39
Section 3.08. Mandatory Redemption............................................................................ 39
Section 3.09. Offer to Purchase by Application of Net Proceeds Offer Amount................................... 39
ARTICLE 4. COVENANTS.......................................................................................... 41
Section 4.01. Payment of Notes................................................................................ 43
Section 4.02. Maintenance of Office or Agency................................................................. 43
Section 4.03. Reports......................................................................................... 43
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 Restricted Subsidiaries....................... 48
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock...................................... 48
Section 4.10. Asset Sales..................................................................................... 49
Section 4.11. Transactions with Affiliates.................................................................... 51
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 4.12. Liens........................................................................................... 52
Section 4.13. Conduct of Business............................................................................. 52
Section 4.14. Corporate Existence............................................................................. 52
Section 4.15. REPURCHASE AT THE OPTION OF HOLDERS............................................................. 53
Section 4.16. Sale Leaseback Transactions..................................................................... 53
Section 4.17. Additional Subsidiary Guarantees................................................................ 54
ARTICLE 5. SUCCESSORS......................................................................................... 54
Section 5.01. Merger, Consolidation, or Sale of Assets........................................................ 54
Section 5.02. Successor Corporation Substituted............................................................... 55
ARTICLE 6. DEFAULTS AND REMEDIES.............................................................................. 55
Section 6.01. Events of Default............................................................................... 55
Section 6.02. Acceleration.................................................................................... 58
Section 6.03. Other Remedies.................................................................................. 58
Section 6.04. Waiver of Past Defaults......................................................................... 58
Section 6.05. Control by Majority............................................................................. 58
Section 6.06. Limitation on Suits............................................................................. 59
Section 6.07. Rights of Holders of Notes to Receive Payment................................................... 59
Section 6.08. Collection Suit by Trustee...................................................................... 59
Section 6.09. Trustee May File Proofs of Claim................................................................ 60
Section 6.10. Priorities...................................................................................... 60
Section 6.11. Undertaking for Costs........................................................................... 60
ARTICLE 7. TRUSTEE............................................................................................ 60
Section 7.01. Duties of Trustee............................................................................... 60
Section 7.02. Rights of Trustee............................................................................... 61
Section 7.03. Individual Rights of Trustee.................................................................... 62
Section 7.04. Trustee's Disclaimer............................................................................ 62
Section 7.05. Notice of Defaults.............................................................................. 62
Section 7.06. Reports by Trustee to Holders of the Notes...................................................... 63
Section 7.07. Compensation and Indemnity...................................................................... 63
Section 7.08. Replacement of Trustee.......................................................................... 64
Section 7.09. Successor Trustee by Merger, etc................................................................ 65
Section 7.10. Eligibility; Disqualification................................................................... 65
Section 7.11. Preferential Collection of Claims Against Issuers............................................... 65
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE........................................................... 65
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance........................................ 65
Section 8.02. Legal Defeasance and Discharge.................................................................. 65
Section 8.03. Covenant Defeasance............................................................................. 66
Section 8.04. Conditions to Legal or Covenant Defeasance...................................................... 66
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions... 67
Section 8.06. Repayment to Issuers............................................................................ 68
Section 8.07. Reinstatement................................................................................... 68
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER................................................................... 68
Section 9.01. Without Consent of Holders of Notes............................................................. 68
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Section 9.02. With Consent of Holders of Notes................................................................ 69
Section 9.03. Compliance with Trust Indenture Act............................................................. 70
Section 9.04. Revocation and Effect of Consents............................................................... 70
Section 9.05. Notation on or Exchange of Notes................................................................ 71
Section 9.06. Trustee to Sign Amendments, etc................................................................. 71
ARTICLE 10 SUBSIDIARY GUARANTEES.............................................................................. 71
Section 10.01. Subsidiary Guarantee........................................................................... 71
Section 10.02. Limitation on Subsidiary Guarantor Liability................................................... 72
Section 10.03. Execution and Delivery of Subsidiary Guarantee................................................. 72
Section 10.04. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.................................. 73
Section 10.05. Releases Following Sale of Assets.............................................................. 74
ARTICLE 11. MISCELLANEOUS..................................................................................... 74
Section 11.01. Trust Indenture Act Controls................................................................... 74
Section 11.02. Notices........................................................................................ 74
Section 11.03. Communication by Holders of Notes with Other Holders of Notes.................................. 76
Section 11.04. Certificate and Opinion as to Conditions Precedent............................................. 76
Section 11.05. Statements Required in Certificate or Opinion.................................................. 76
Section 11.06. Rules by Trustee and Agents.................................................................... 76
Section 11.07. No Personal Liability of Partners, Directors, Officers, Employees and Stockholders............. 76
Section 11.08. Governing Law.................................................................................. 77
Section 11.09. No Adverse Interpretation of Other Agreements.................................................. 77
Section 11.10. Successors..................................................................................... 77
Section 11.11. Severability................................................................................... 77
Section 11.12. Counterpart Originals.......................................................................... 77
Section 11.13. Table of Contents, Headings, etc............................................................... 77
</TABLE>
EXHIBITS
Exhibit A FORM OF NOTES
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF NOTATION OF SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
iii
<PAGE>
INDENTURE dated as of July 22, 1998 among Anthony Crane Rental, L.P.,
a Pennsylvania limited partnership (the "Company"), Anthony Crane Capital
Corporation, a Delaware corporation ("AC Capital Corp." and, together with the
Company, the "Issuers"), and State Street Bank and Trust Company, as trustee
(the "Trustee").
The Issuers and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 10 3/8% Series
A Senior Notes due 2008 (the "Series A Notes") and the 10 3/8% Series B Senior
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.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or that is assumed by the Company or any of its Restricted
Subsidiaries in connection with the acquisition of assets from such Person, in
each case excluding any Indebtedness incurred by such Person in connection with,
or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such acquisition.
"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" means a Person who directly or indirectly through one or
more intermediaries controls, or controlled by, or is under common control with,
the Company. The term "control" means the possession directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, no Person (other than the Company or
any Subsidiary of the Company) in whom a Securitization Entity makes an
Investment in connection with a Qualified Securitization Transaction shall be
deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investment.
"Agent" means any Registrar, Paying Agent or co-registrar.
"all or substantially all" shall have the meaning given such phrase in
the Revised Model Business Corporation Act.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person if, as a result of such
Investment, such Person shall become a Restricted Subsidiary of the Company, or
shall be merged with or into the Company or any Restricted Subsidiary of the
Company, or (b) the acquisition by the Company or any Restricted Subsidiary of
the Company of all or substantially all of the assets of any other Person or any
division or line of business of any other Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease, assignment or other transfer for value (other than operating
leases entered into in the ordinary course of
<PAGE>
business (other than Sale and Leaseback Transactions)) by the Company or any of
its Restricted Subsidiaries to any Person other than the Company or a Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted Subsidiary
of the Company or (b) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business; provided, however, that Asset Sales shall not include (i) a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $1.0
million, (ii) the sale, lease, conveyance, disposition or other transfer of all
substantially all of the assets of the Company as permitted by Section 5.01 or
any disposition that constitutes a Change of Control, (iii) the sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof, (iv) the factoring of accounts receivable arising in the
ordinary course of business pursuant to arrangements customary in the industry,
(v) the licensing of intellectual property, (vi) disposals or replacements of
used or obsolete cranes and equipment in the ordinary course of business, (vii)
the sale, lease conveyance, disposition or other transfer by the Company or any
Restricted Subsidiary of assets or property to one or more Restricted
Subsidiaries in connection with Investments permitted by Section 4.07 and (viii)
sales of accounts receivable, equipment and related assets (including contract
rights) of the type specified in the definition of "Qualified Securitization
Transaction" to a Securitization Entity for the fair market value thereof,
including cash in an amount at least equal to 75% of the fair market value
thereof. For the purposes of clause (viii), Purchase Money Notes shall be deemed
to be cash.
"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.
"Attributable Debt" means, in respect of a sale and leaseback
transaction, at the time of determination, the present value (discounted at the
rate of interest implicit in such transaction, determined in accordance with
GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Borrowing Base" means, as of any date, an amount equal to the sum of
(i) 100% of the orderly liquidation value of cranes and lifting equipment; (ii)
75% of the orderly liquidation value of trucks and trailers; (iii) 85% of the
face amount of all accounts receivable owned by the Company and its Restricted
Subsidiaries as of such date that are not more than 90 days past due, as
calculated on a consolidated basis and in accordance with GAAP and (iv) 75% of
the book value of spare parts inventory. To the extent that information is not
available as to the amount of accounts receivable as of a specific date, the
Company may utilize the most recent available information for purposes of
calculating the Borrowing Base.
"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.
2
<PAGE>
"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) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's; (iii) commercial paper maturity no more
than one year from the date of creation thereof and at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances (or, with respect to foreign
banks, similar instruments) maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, having at
the date of acquisition thereof combined capital and surplus of not less than
$500.0 million; (v) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (iv)
above; and (vi) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (i) through (v)
above.
"Cedel" means Cedel Bank, SA.
"Certificated 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.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of Holdings and its Subsidiaries (determined on a consolidated basis)
or the Company and its Subsidiaries (determined on a consolidated basis) to any
Person or group of related Persons, as defined in Section 13(d) of the Exchange
Act (a "Group"), together with any Affiliates thereof (whether or not otherwise
in compliance with the provisions hereof) other than a Principal or a Related
Party of a Principal; (ii) the approval by the holders of Capital Stock of one
or more of the Issuers or the General Partner of any plan or proposal for the
liquidation or dissolution of the Issuers or the General Partner (whether or not
otherwise in compliance with the provisions hereof); (iii) any Person or Group
(other than one of the Principals or their respective Related Parties) shall
become the owner, directly or indirectly, beneficially or of record, of more
than 50% of either the aggregate Voting Stock or Capital Stock of Holdings, the
General Partner, one of the Issuers or any successor to all or substantially all
of their respective assets; (iv) the occurrence of any transaction, the result
of which is that the General Partner is no longer the sole general partner of
the Company; (v) the first day on which the Company fails to own 100% of the
issued and outstanding Equity Interests of AC Capital Corp.; and (vi) (A) for so
long as the Company is a partnership (or other pass-through entity for federal
income tax purposes) with a limited liability company serving as the General
Partner, the first day on which a majority of the members of the Management
Committee of the General Partner are not Continuing Members and (B) at
3
<PAGE>
all such other times, the first day on which a majority of the members of the
Company's Management Committee are not Continuing Members. Notwithstanding the
foregoing, any reorganization of the Company and Anthony Crane Capital
Corporation pursuant to the last sentence of Section 5.01 shall not constitute a
Change of Control under this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Anthony Crane Rental, L.P., Anthony Crane Capital
Corporation and any and all successors thereto.
"Consolidated EBITDA" means, with respect to any Person for any
period, the sum (without duplication) of such Person's (i) Consolidated Net
Income (less any gains on Used Crane Sales) and (ii) to the extent Consolidated
Net Income has been reduced thereby, (A) all income taxes and foreign
withholding taxes of such Person and its Restricted Subsidiaries paid or accrued
in accordance with GAAP for such period and any provision for taxes paid or
accrued based on income or profits or the Tax Amount of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes or Tax
Amount was included in computing such Consolidated Net Income, (B) Consolidated
Interest Expense, (C) Consolidated Noncash Charges, (D) all one-time cash
compensation payments made in connection with the Transactions, and (E) any
payments related to addressing the Company's or any of its Restricted
Subsidiaries "Year 2000" information systems issues or to re-engineering efforts
that must be expensed in accordance with EITF 97-13.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the most recent
four full fiscal quarters for which internal financial statements are available
(the "Four-Quarter Period") ending on or prior to the date of the transaction
giving rise to the need to calculate the Consolidated Fixed Charge Coverage
Ratio (the "Transaction Date") to Consolidated Fixed Charges of such Person for
the Four-Quarter Period. In addition to and without limitation of the foregoing,
for purposes of this definition, Consolidated EBITDA and Consolidated Fixed
Charges shall be calculated after giving effect on a pro forma basis for the
period of such calculation to (i) the incurrence of any Indebtedness or the
issuance of any preferred stock of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) and any repayment of
other Indebtedness or redemption of other preferred stock occurring during the
Four-Quarter Period or at any time subsequent to the last day of the Four-
Quarter Period and on or prior to the Transaction Date, as if such incurrence,
repayment, issuance or redemption, as the case may be (and the application of
the proceeds thereof), occurred on the first day of the Four-Quarter Period and
(ii) any Asset Sales or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of such Person or one of its Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring,
assuming or otherwise being liable for Acquired Indebtedness and also including
any Consolidated EBITDA (including any Pro Forma Cost Savings) associated with
such Asset Acquisition) occurring during the Four-Quarter Period or at any time
subsequent to the last day of the Four-Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any such Indebtedness or Acquired
Indebtedness) occurred on the first day of the Four-Quarter Period. If such
Person or any of its Restricted Subsidiaries directly or indirectly Guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Restricted
Subsidiary of such Person had directly incurred or otherwise assumed such
guaranteed Indebtedness. Furthermore, in calculating Consolidated Fixed Charges
for purposes of determining the denominator (but not the numerator) of this
Consolidated Fixed Charge Coverage Ratio, (1) interest on outstanding
Indebtedness determined on a
4
<PAGE>
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (2) if interest on any Indebtedness actually incurred on the Transaction
Date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Four-Quarter Period; and (3) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating rate, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense
(excluding amortization or write off of debt issuance costs incurred on or prior
to the date of this Indenture) plus (ii) the product of (a) all cash dividend
payments or other distributions (and non cash dividend payments in the case of a
Person that is a Subsidiary) on any series of preferred equity of such Person,
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 (or, in the case of a Person that is a partnership or a
limited liability company, the combined federal, state and local income tax rate
that was or would have been utilized to calculate the Tax Amount of such
Person), expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP, provided that with respect to any series of preferred
stock that was not paid cash dividends during such period but that is eligible
to be paid cash dividends during any period prior to the maturity date of the
Notes, cash dividends shall be deemed to have been paid with respect to such
series of preferred stock during such period for purposes of clause (ii) of this
definition.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of, without duplication, (i) the aggregate of all cash and
non-cash interest expense with respect to all outstanding Indebtedness
(including amortization or write-off of debt issuance costs) of such Person and
its Restricted Subsidiaries, including the net costs associated with Interest
Swap Obligations, for such period determined on a consolidated basis in
conformity with GAAP, (ii) the consolidated interest expense incurred by such
Person and its Restricted Subsidiaries that was capitalized during such period,
and (iii) the interest component of Capitalized Lease Obligations and imputed
interest with respect to Attributable Debt paid, accrued and/or scheduled to be
paid or accrued by such Person and its Restricted Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, (i) the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, provided that there shall be excluded therefrom (a) gains (or losses)
from Asset Sales (without regard to the $1.0 million limitation set forth in the
definition thereof) or abandonments or reserves relating thereto and the related
tax effects according to GAAP, (b) gains (or losses) due solely to fluctuations
in currency values and the related tax effects according to GAAP, (c) items
classified as extraordinary, unusual or nonrecurring gains (or losses)
(including, without limitation, severance, relocation, other restructuring costs
and multiemployer pension plan insured liability payments), and the related tax
effects according to GAAP and any related Tax Amounts with respect thereto, (d)
the net income (or loss) of any Person acquired in a pooling of interests
transaction accrued prior to the date it becomes a Restricted Subsidiary of the
Company or is merged or consolidated with the Company or any Restricted
Subsidiary of the Company, (e) the net income of any Restricted Subsidiary of
the Company to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of the Company of that income is
restricted by
5
<PAGE>
contract, operation of its charter (or the equivalent thereof), operation of law
or otherwise, (f) the net income of any Person, other than a Restricted
Subsidiary of the Company, except to the extent of cash dividends or
distributions paid to the Company or a Restricted Subsidiary of the Company by
such Person, (g) only for purposes of clause (c)(i) of the first paragraph of
Section 4.07, any amounts included pursuant to clause (c)(iii) of the first
paragraph of such covenant, (h) the net income (or loss) from the operations of
any business that has been divested by distribution, sale, spin-off or
abandonment, and (i) one time non-cash compensation charges, including any
arising from existing stock options resulting from any merger or
recapitalization transaction, less (ii) any cash distribution paid or accrued
related to payment of the Tax Amount for such period.
"Consolidated Noncash Charges" means, with respect to any Person for
any period, the aggregate depreciation, amortization and any other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person for such period, determined on a consolidate basis in
accordance with GAAP excluding any such non-cash charge constituting an
extraordinary item or loss or any such non-cash charge which requires an accrual
of or a reserve for cash charges for any future period.
"Continuing Members" means, as of any date of determination, any
member of the Management Committee of the Company who (i) was a member of such
Management Committee on the date of this Indenture or (ii) was nominated for
election or elected to such Management Committee by any of the Principals or
with the approval of a majority of the Continuing Members who were members of
such Board 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 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facilities" means one or more debt facilities (including,
without limitation, the Senior Credit Facilities) or commercial paper facilities
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) and/or letters of credit.
"Currency Agreements" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"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.
"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 Noncash Consideration" means any non-cash consideration
(other than non-cash consideration that would constitute a Restricted
Investment) received by the Company or one of
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its Restricted Subsidiaries in connection with an Asset Sale that is so
designated as Designated Noncash Consideration pursuant to an Officers'
Certificate executed by the principal executive officer and the principal
financial officer of the Company or such Restricted Subsidiary. Such Officers'
Certificate shall state the basis of such valuation, which shall be a report of
a nationally recognized investment banking firm with respect to the receipt in
one or a series of related transactions of Designated Noncash Consideration with
a fair market value in excess of $10.0 million.
"Designated Preferred Stock" means preferred stock that is so
designated as Designated Preferred Stock, pursuant to an Officers' Certificate
executed by the principal executive officer and the principal financial officer
of the Company, on the issuance date thereof, the cash proceeds of which are
excluded from the calculation set forth in clause (iv) of the first paragraph of
Section 4.07.
"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 if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07.
"Distribution Compliance Period" means the 40-day distribution
compliance period as defined in Regulation S.
"dividends" means, for so long as the Company or any applicable
Subsidiary is a partnership (or other pass-through entity for federal income tax
purposes), dividends or distributions.
"EITF" means the Emerging Issues Task Force of the Financial
Accounting Standards Board.
"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).
"Equity Offering" means any offering of Qualified Capital Stock of
Holdings or the Company; provided that, in the event of any Equity Offering by
Holdings, Holdings contributes to the capital of the Company the portion of the
net cash proceeds of such Equity Offering necessary to pay the aggregate
redemption price (plus accrued interest and Liquidated Damages, if any, to the
redemption date) of the Notes to be redeemed pursuant to the second paragraph of
Section 3.07.
"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.
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"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 Senior Credit
Facilities) in existence on the date of this Indenture, until such amounts are
permanently repaid.
"Four-Quarter Period" has the meaning specified in the definition of
Consolidated Fixed Charge Coverage Ratio.
"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 on December 31, 1997.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A 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.
"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 (including Interest Swap
Obligations) and (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.
"Holdings" means Anthony Crane Rental Holdings, L.P., a Delaware
limited partnership, and its successors.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the 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 to Institutional Accredited Investors.
"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
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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. For purposes of calculating the amount of Indebtedness of a
Securitization Entity outstanding as of any date, the face or notional amount of
any interest in receivables or equipment that is outstanding as of such date
shall be deemed to be Indebtedness but any such interests held by Affiliates of
such Securitization Entity shall be excluded for purposes of such calculation.
"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 $155.0 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.
"Interest Swap Obligations" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Persons calculated by applying a fixed or a floating rate of interest on the
same notional amount.
"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 Subsidiary of the Company sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a 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 Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 4.07.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal corporate
trust office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment
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<PAGE>
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 Issuers 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.
"Management Committee" means (i) for so long as the Company is a
partnership (or other pass through entity for federal income tax purposes), the
management committee (or the equivalent thereof for any other pass through
entity for federal income tax purposes) of the General Partner and (ii)
otherwise, the Board of Directors of the Company.
"Marketable Securities" means publicly traded debt or equity
securities that are listed for trading on a national securities exchange and
that were issued by a corporation whose debt securities are rated at least "AAA-
" from S&P or "Aaa3" from Moody's.
"Moody's" means Moody's Investors Service, Inc.
"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 or Tax Distributions
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.
"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 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; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
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"Notes" has the meaning assigned to it in the preamble of this
Indenture.
"Obligations" means any principal, interest (including interest that,
but for the filing of a petition in bankruptcy with respect to the Issuers,
would accrue on such obligations), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"Offering" means the offering of the Notes by the Issuers.
"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
Issuers by two Officers of the Issuers, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Issuers, that meets the requirements of
Sections 11.04 and 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Sections
11.04 and 11.05 hereof. The counsel may be an employee of or counsel to the
Issuers, 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).
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Business" means any business that derives a majority of its
revenues from the sale, rental or lease of cranes or other lifting equipment or
activities that are reasonably similar, ancillary or related to, or a reasonable
extension, development or expansion of, the businesses in which the Company and
its Restricted Subsidiaries are engaged on the date of this Indenture.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Restricted Subsidiary of the Company
(whether existing on the date of this Indenture or created thereafter) or in any
other Person (including by means of any transfer of cash or other property) if
as a result of such Investment such Person shall become a Restricted Subsidiary
of the Company and Investments in the Company by any Restricted Subsidiary of
the Company, (ii) cash and Cash Equivalents, (iii) Investments existing on the
date of this Indenture, (iv) loans and advances to employees and officers of the
Company and its Restricted Subsidiaries in the ordinary course of business, (v)
accounts receivable created or acquired in the ordinary course of business, (vi)
Interest Swap Obligations entered into in the ordinary course of the Company's
businesses and otherwise in compliance with this Indenture, (vii) Investments in
Unrestricted Subsidiaries an amount at any one time outstanding not to exceed
$10.0 million, (viii) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers, (ix) guarantees
by the Company of Indebtedness otherwise permitted to be incurred by Restricted
Subsidiaries of the Company under this Indenture, (x) Investments the payment
for which consists exclusively of Qualified Capital Stock of the Company, (xi)
additional Investments
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having an aggregate fair market value, taken together with all other Investments
made pursuant to this clause (xi) that are at that time outstanding, not to
exceed 5% of Total Assets at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without giving
effect to subsequent changes in value), (xii) Investments received by the
Company or its Restricted Subsidiaries as consideration for asset sales,
including Asset Sales; provided that in the case of an Asset Sale, such Asset
Sale is effected in compliance with Section 4.10, and (xiii) any Investment by
the Company or a Subsidiary of the Company in a Securitization Entity or any
Investment by a Securitization Entity in any other Person in connection with a
Qualified Securitization Transaction; provided that any Investment in a
Securitization Entity is in the form of a Purchase Money Note or an equity
interest.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries shall
have set aside on its books such reserves as may be required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default;
(v) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not interfering in
any material respect with the ordinary conduct of the business of the Company or
any of its Restricted Subsidiaries;
(vi) any interest or title of a lessor under any Capitalized Lease
Obligation;
(vii) purchase money Liens to finance property or assets of the
Company or any Restricted Subsidiary of the Company acquired in the ordinary
course of business; provided, however, that (A) the related purchase money
Indebtedness shall not exceed the cost of such property or assets and shall not
be secured by any property or assets of the Company or any Restricted Subsidiary
of the Company other than the property and assets so acquired and (B) the Lien
securing such Indebtedness shall be created with 90 days of such acquisition;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment, or storage of such inventory or other goods;
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(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and set-off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xii) Liens securing Acquired Indebtedness incurred in reliance on
the second paragraph of Section 4.09;
(xiii) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary with respect to obligations that do not in
the aggregate exceed $10.0 million at any one time outstanding;
(xiv) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and its Restricted
Subsidiaries;
(xv) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(xvi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customer duties in connection with the
importation of goods;
(xvii) Liens on assets of Unrestricted Subsidiaries that secure Non-
Recourse Debt of Unrestricted Subsidiaries;
(xviii) Liens existing on the date of the Indenture, together with any
Liens securing Indebtedness incurred in reliance on clause (xiii) of the
definition of Permitted Indebtedness in order to refinance the Indebtedness
secured by Liens existing on the date of this Indenture; provided that the Liens
securing the refinancing Indebtedness shall not extend to property other than
that pledged under the Liens securing the Indebtedness being refinanced;
(xix) Liens securing Indebtedness and other Obligations under Credit
Facilities that will be permitted by the terms of this Indenture to be incurred;
(xx) Liens securing Attributable Debt incurred in connection with
any sale and leaseback transaction permitted to be consummated pursuant Section
4.16;
(xxi) Liens securing Indebtedness permitted to be incurred pursuant
to (A) the Senior Credit Facilities (whether such Indebtedness is incurred
pursuant to the Consolidated Fixed Charge Coverage Ratio set forth in the first
paragraph of Section 4.09 or clause (ii) of Section 4.09, (B) clause (ix) of
Section 4.09 and (C) clause (xiv) of Section 4.09; and
(xxii) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case incurred in connection with a
Qualified Securitization Transaction.
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"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).
"Principals" means Bain Capital, Inc. and any Affiliate of Bain
Capital, Inc.
"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.
"Productive Assets" means assets (including Capital Stock) that are
used or usable by the Company and its Restricted Subsidiaries in Permitted
Businesses; provided that for any Capital Stock to qualify as Productive Assets,
it must, after giving pro forma effect to the transaction in which it was
acquired, be Capital Stock of a Restricted Subsidiary.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs that occurred during the Four-Quarter Period or after the end
of the Four-Quarter Period and on or prior to the Transaction Date that were (i)
directly attributable to an Asset Acquisition and calculated on a basis that is
consistent with Article 11 of Regulation S-X under the Securities Act as in
effect on the date of the Indenture or (ii) implemented by the business that was
the subject of any such Asset Acquisition within six months of the date of the
Asset Acquisition and that are supportable and quantifiable by the underlying
accounting records of such business, as if, in the case of each of clause (i)
and (ii), all such reductions in costs had been effected as of the beginning of
such period.
"Purchase Money Note" means a promissory note of a Securitization
Entity evidencing a line of credit, which may be irrevocable, from the Company
or any Restricted Subsidiary of the Company in connection with a Qualified
Securitization Transaction, which note shall be repaid from cash available to
the Securitization Entity, other than (i) amounts required to be established as
reserves pursuant to agreements, (ii) amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and (iii) amounts
paid in connection with the purchase of newly generated receivables or newly
acquired equipment.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Stock.
"Qualified Securitization Transaction" means any transaction or series
of transactions pursuant to which the Company or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to (a) a Securitization
Entity (in the case of a transfer by the Company or any of its Restricted
Subsidiaries) and (b) any other Person (in case of a transfer by a
Securitization Entity), or may grant a security interest in, any accounts
receivable or equipment (whether now existing or arising or acquired in the
future) of the Company or any of its Restricted Subsidiaries, and any assets
related thereto including, without limitation, all collateral securing such
accounts receivable and equipment, all contracts and contract rights and all
Guarantees or other obligations in respect to such accounts receivable and
equipment, proceeds of such accounts receivable and equipment and other assets
(including contract rights) which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable and equipment, all of
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the foregoing for the purpose of providing working capital financing on terms
that are more favorable to the Company and its Restricted Subsidiary than would
otherwise be available at that time.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Issuers 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 Issuers
and the other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Issuers 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" 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 Distribution Compliance 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.
"Related Party" with respect to any Principal means (A) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (B) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).
"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 Certificated Note" means a Certificated 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 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.
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"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 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.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard & Poor's.
"Sale and Leaseback Transaction" means any sale and leaseback
transaction by the Company or any of its Restricted Subsidiaries with respect to
assets with an aggregate fair market value (as determined in good faith by the
Management Committee) in excess of $1.0 million.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Entity" means a Wholly Owned Subsidiary of the Company
(or another Person in which the Company or any Subsidiary of the Company makes
an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable or equipment and related assets) that engages in
no activities other than in connection with the financing of accounts receivable
or equipment and that is designated by the Management Committee of the Company
(as provided below) as a Securitization Entity (a) no portion of the
Indebtedness or any other Obligations (contingent or otherwise) of which (i) is
guaranteed by the Company or any Restricted Subsidiary of the Company (excluding
guarantees of Obligations (other than the principal of, and interest on,
Indebtedness)) pursuant to Standard Securitization Undertakings, (ii) is
recourse to or obligates the Company or any Restricted Subsidiary of the Company
in any way other than pursuant to Standard Securitization Undertakings or (iii)
subjects any property or asset of the Company or any Restricted Subsidiary of
the Company, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (B) with which neither the Company nor any Restricted Subsidiary
of the Company has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
that are not Affiliates of the Company, other than fees payable in the ordinary
course of business in connection with servicing receivables of such entity, and
(c) to which neither the Company nor any Restricted Subsidiary of the Company
has any obligation to maintain or preserve such entity's financial condition or
cause such entity to achieve certain levels of operating results. Any such
designation by the Management Committee of the Company shall be evidenced to
each of the Trustees by filing with the Trustees a certified copy of the
resolution of the Management Committee of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"Senior Credit Facilities" means the Term and Revolving Credit
Agreements, dated as of the date of this Indenture, by and among the Company,
Goldman Sachs Credit Partners L.P., and the Agent, Collateral Agent and the
financial institutions party thereto, providing for revolving credit borrowings
and term loan borrowings, including any related notes, guarantees, collateral
documents,
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instruments and agreements executed in connection therewith, and in each case as
amended (including any amendment and restatement thereof), modified, renewed,
refunded, replaced, refinanced or restructured from time to time and whether
with the same or any other agent, lender or group of lenders, including to
increase the amount of available borrowings thereunder.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company that are reasonably customary in an accounts
receivable or equipment transactions.
"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 shares of
Capital Stock 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), but shall not
include any Unrestricted Subsidiary.
"Subsidiary Guarantee" means the Guarantee by each Subsidiary
Guarantor of the Issuers payment obligations under this Indenture and the Notes,
executed pursuant to the provisions of this Indenture.
"Subsidiary Guarantors" means (i) all Restricted Subsidiaries (other
than AC Capital Corp.) and (ii) any other subsidiary that executes a Subsidiary
Guarantee in accordance with the provisions of this Indenture, and their
respective successors and assigns.
"Tax Amount" means the amount of distributions, whether paid or
accrued, necessary to permit Holdings' and the Company's partners to pay federal
and state income tax liabilities arising from income of the Company and its
Restricted Subsidiaries and taxable to such partners, including the tax
distributions contemplated by the Holdings' and the Company's respective
partnership agreements attributable to such partners solely as a result of the
Company (and any intermediate entity through which any such partner owns its
interest in the Company) being a partnership or similar pass-through entity for
federal income tax purposes.
"Tax Distributions" means a distribution in respect of taxes to the
partners of the Company pursuant to clause (9) of the second paragraph of
Section 4.07.
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"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"Total Assets" means the total consolidated assets of the Company and
its Restricted Subsidiaries, as set forth on the Company's most recent
consolidated balance sheet.
"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 Certificated Note" means one or more Certificated Notes
that do not bear and are not required to bear the Private Placement Legend.
"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 Subsidiary" means (i) any Subsidiary (other than AC
Capital Corp.) that is designated by the Management Committee as an Unrestricted
Subsidiary pursuant to a 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 (x) to subscribe for additional Equity
Interests or (y) 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. Any such designation by the
Management Committee 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 and was permitted by Section 4.07. If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of the 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, the Company shall be in default of
such section). The Management Committee 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, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period,
(ii) such Subsidiary shall execute a Note Guarantee and deliver an Opinion of
Counsel, in accordance with the terms of the Indenture and (iii) no Default or
Event of Default would be in existence following such designation.
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"Used Crane Sales" means sales of used cranes, used parts and other
used equipment by the Company or any of its Restricted Subsidiaries pursuant to
the Company's fleet management program in the ordinary course of business
consistent with past practices on the date of this Indenture.
"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
Management Committee or Board of Directors, as applicable, 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 or by one or more Wholly Owned Restricted
Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.
"Wholly Owned Subsidiary" of any Person means a 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 or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"Acceleration Notice"................................ 6.02
"Affiliate Transaction".............................. 4.11
"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
"DTC"................................................ 2.03
"Event of Default"................................... 6.01
"incur".............................................. 4.09
"Legal Defeasance"................................... 8.02
"Net Proceeds Offer"................................. 4.10
"Net Proceeds Offer Amount".......................... 4.10
"Net Proceeds Offer Payment Date".................... 4.10
"Net Proceeds Offer Trigger Date".................... 4.10
</TABLE>
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Defined in
Term Section
"Offer Period"....................................... 3.09
"Paying Agent"....................................... 2.03
"Permitted Indebtedness"............................. 4.09
"Purchase Date"...................................... 3.09
"Refinancing Indebtedness"........................... 4.09
"Refunding Capital Stock"............................ 4.07
"Registrar".......................................... 2.03
"Required Premiums".................................. 4.09
"Restricted Payments"................................ 4.07
"Retired Capital Stock".............................. 4.07
Section 1.03. TIA definitions.
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 Issuers
and the Subsidiary 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;
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(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 Issuers, the
Subsidiary 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) Temporary Global Notes. 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 Issuers and authenticated by the
Trustee as hereinafter provided. The Distribution Compliance 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 Distribution Compliance Period pursuant
to another exemption from registration under the Securities Act and who will
take delivery of a beneficial ownership interest in a Rule 144A Global Note or
an IAI Global Note bearing a Private Placement
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Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an
Officers' Certificate from the Issuers. Following the termination of the
Distribution Compliance 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. Execution and Authentication.
Two Officers shall sign the Notes for the Issuers by manual or
facsimile signature. The Issuers' seal shall 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 Issuers 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
Issuers 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 Issuers.
Section 2.03. Registrar and Paying Agent.
The Issuers 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 Issuers 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 Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Issuers fail 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.
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The Issuers initially appoint The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Issuers initially appoint 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 Issuers 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 of any default by the Issuers 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 Issuers 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 Issuers, 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 (S) 312(a). If the Trustee is
not the Registrar, the Issuers 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 Issuers shall otherwise comply with TIA (S) 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, 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
Issuers for Certificated Notes if (i) the Issuers deliver to the Trustee 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
Issuers within 120 days after the date of such notice from the Depositary or
(ii) the Issuers in their sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Certificated 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 Issuers for
Certificated Notes prior to (x) the expiration of the Distribution Compliance
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, Certificated Notes shall
be issued in such names as the Depositary shall instruct the Trustee. 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
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<PAGE>
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 Distribution Compliance 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 Certificated 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 Certificated Note shall be
registered to effect the transfer or exchange referred to in (1) above;
provided that in no event shall Certificated 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 Distribution Compliance 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
Issuers 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.
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(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 Rule 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications in item (1) thereof;
(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 Global Note, 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 transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if
applicable.
(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 Issuers;
(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 Participating 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
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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
Issuers 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 Certificated Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Certificated Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Certificated Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Certificated 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 Certificated 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,
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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 Issuers shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Certificated Note in
the appropriate principal amount. Any Certificated 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 Certificated Notes to the Persons in whose names such Notes
are so registered. Any Certificated 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
Certificated Note or transferred to a Person who takes delivery thereof in the
form of a Certificated Note prior to (x) the expiration of the Distribution
Compliance 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.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Certificated Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Certificated
Note or may transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Certificated 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 Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
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<PAGE>
(C) such transfer is effected by a Participating 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 Certificated 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 Certificated 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.
(iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Certificated Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Certificated
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Certificated 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 Issuers shall execute
and the Trustee shall authenticate and deliver to the Person designated in the
instructions a Certificated Note in the appropriate principal amount. Any
Certificated Note issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(iii) 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
Certificated Notes to the Persons in whose names such Notes are so registered.
Any Certificated Note issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(iii) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Certificated Notes for Beneficial Interests.
(i) Restricted Certificated Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Certificated Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or to
transfer such Restricted Certificated 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 Certificated Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from
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such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Certificated 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 Certificated 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 Certificated 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 Certificated 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 Certificated 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 Certificated 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 Certificated 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 Rule 144A Global Note, in the case of clause (c)
above, the Regulation S Global Note, and in all other cases, the IAI Global
Note.
(ii) Restricted Certificated Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Restricted Certificated Note may exchange such
Note for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Certificated 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 Issuers;
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(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 Participating 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 Certificated 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 Certificated 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 Certificated Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) Unrestricted Certificated Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Certificated Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Certificated 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 Certificated 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 Certificated 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 Issuers 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 Certificated Notes so transferred.
(e) Transfer and Exchange of Certificated Notes for Certificated Notes.
Upon request by a Holder of Certificated Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Certificated Notes. Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Certificated Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
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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 Certificated Notes to Restricted Certificated Notes.
Any Restricted Certificated Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Certificated 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 Certificated Notes to Unrestricted Certificated Notes.
Any Restricted Certificated Note may be exchanged by the Holder thereof for an
Unrestricted Certificated Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Certificated 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 Issuers;
(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 Participating
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 Certificated
Notes proposes to exchange such Notes for an Unrestricted
Certificated 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 Certificated
Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Certificated
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
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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
Issuers 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 Certificated Notes to Unrestricted Certificated Notes.
A Holder of Unrestricted Certificated Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Certificated
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Certificated 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 Issuers 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 Issuers, and
accepted for exchange in the Exchange Offer and (ii) Certificated Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Certificated 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 Issuers shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Certificated Notes so accepted Certificated
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Certificated 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 Certificated Note (and all Notes issued
in exchange therefor or substitution thereof) shall bear the
legend in substantially the following form
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:
1. REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS
NOTE IN AN
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OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT (AN "IAI"),
2. AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF
ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT
OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND
3. AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING."
(B) Notwithstanding the foregoing, any Global Note or
Certificated Note issued pursuant to subparagraphs (b)(iv),
(c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii),
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(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 ISSUERS."
(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
Certificated Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled 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 Certificated
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 Issuers shall
execute and the Trustee shall authenticate Global Notes and Certificated Notes
upon the Issuers' order or at the Registrar's request.
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(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Certificated Note for any
registration of transfer or exchange, but the Issuers 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 Certificated Notes issued upon any
registration of transfer or exchange of Global Notes or Certificated Notes
shall be the valid obligations of the Issuers, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Global Notes or
Certificated Notes surrendered upon such registration of transfer or exchange.
(v) The Issuers 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 Issuers 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 Issuers
shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Certificated 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.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Issuers
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Issuers 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 Issuers, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Issuers may charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuers
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
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Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled 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
Issuers 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 Issuers consider
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers 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 Issuers 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
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be
delivered to the Issuers. The Issuers may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
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Section 2.12. Defaulted Interest.
If the Issuers default 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 Issuers 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 Issuers 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 Issuers (or,
upon the written request of the Issuers, the Trustee in the name and at the
expense of the Issuers) 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 Issuers elect 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, (iv) the redemption price and (v) the CUSIP
numbers of the Notes to be redeemed.
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 in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. 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 Issuers 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 Issuers 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.
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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 Issuers default 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 Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at its expense; provided, however, that the
Issuers 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 Issuers 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 Issuers any
money deposited with the Trustee or the Paying Agent by the Issuers in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Issuers comply 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 Issuers to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is
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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 Issuers shall
issue and, upon the Issuers' written request, the Trustee shall authenticate for
the Holder at the expense of the Issuers a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as provided below, the Notes will not be redeemable at the
Issuers' option prior to August 1, 2003. Thereafter, the Notes will be subject
to redemption at any time at the option of the Issuers, 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 August 1 of the
years indicated below:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ----------------
<S> <C>
2003................................ 105.188%
2004................................ 103.458%
2005................................ 101.729%
2006 and thereafter................. 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to August 1,
2001, the Issuers may on any one or more occasions redeem up to 35% of the
aggregate principal amount of Notes originally issued under the Indenture at a
redemption price of 110.375% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of any Equity Offerings; provided that at least 65%
of the 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 provided further that such redemption shall
occur within 120 days of the date of the closing of any such Equity 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 Issuers shall not be required to make mandatory redemption
payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Net Proceeds Offer Amount.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence a Net Proceeds Offer, it shall follow the procedures
specified below.
The Net Proceeds 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
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"Offer Period"). No later than five Business Days after the termination of the
Offer Period (the "Purchase Date"), the Company shall purchase the Net Proceeds
Offer Amount of Notes or, if less than the Net Proceeds Offer Amount has been
tendered, all Notes tendered in response to the Net Proceeds 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 Net Proceeds Offer.
Upon the commencement of an Net Proceeds 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 Net Proceeds
Offer. The Net Proceeds Offer shall be made to all Holders. The notice, which
shall govern the terms of the Net Proceeds Offer, shall state:
(a) that the Net Proceeds Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Net Proceeds Offer shall
remain open;
(b) the Net Proceeds Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Net
Proceeds Offer may only elect to have all of such Note purchased and may not
elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any Net
Proceeds 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;
(g) 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;
(h) 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
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(i) 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 Net
Proceeds Offer Amount of Notes or portions thereof tendered pursuant to the Net
Proceeds Offer, or if less than the Net Proceeds 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 Net
Proceeds 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 Issuers 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
Issuers in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Issuers 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 Issuers 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 Issuers 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 Issuers in respect of the Notes and this Indenture may be
served. The Issuers 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 Issuers shall fail to maintain any such required office or agency or
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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 Issuers 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
Issuers of their obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Issuers 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 Issuers hereby designate the Corporate Trust Office of the Trustee
as one such office or agency of the Issuers 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 Issuers will 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 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 each case within the time
periods specified in the SEC's rules and regulations. In addition, following
the consummation of the exchange offer contemplated by the Registration Rights
Agreement, 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 within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.
(b) For so long as any Notes remain outstanding, the Company and the
Subsidiary Guarantors shall furnish to the Holders 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 Subsidiary Guarantor (to the extent that such
Subsidiary 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
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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 Issuers and each of the Subsidiary 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 Issuers and each of the Subsidiary 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
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 Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Qualified Capital Stock 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 or any direct or indirect parent 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 (other than intercompany Indebtedness), except a
payment of interest or
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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; and
(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 Consolidated
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09; 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 of this Indenture (excluding Restricted Payments permitted by
clauses (3), (4) (but only to the extent such Restricted Payment is made with
the cash proceeds received by the Company from any "key man" life insurance
policies), (5), (7), (8) and (9) of the next succeeding paragraph), is less than
the sum, without duplication, of (i) 50% of the Consolidated Net Income of the
Company for the period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after the date of this Indenture 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 (ii) 100% of the aggregate net proceeds (including the fair
market value of property other than cash (determined in good faith by the
Management Committee as evidenced by a certificate filed with the Trustee,
except that in the event the value of any non cash consideration shall be $15.0
million or more, the value shall be determined based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing)) received by the Company since the date of this Indenture as
a contribution to its common equity capital or from the issue or sale of Equity
Interests (other than Disqualified Stock) of the Company (excluding any net
proceeds from an Equity Offering or capital contribution to the extent used to
redeem Notes in accordance with the optional redemption provisions of the Notes)
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 (iii) to the extent that any Restricted
Investment that was made after the date of this Indenture is sold for cash or
otherwise liquidated or repaid for cash, the cash return of capital with respect
to such Restricted Investment (less the cost of disposition, if any), plus (iv)
any dividends (the fair market value of property other than cash shall be
determined in good faith by the Management Committee as evidenced by a
certificate filed with the trustee, except that in the event the value of any
non-cash consideration shall be $15.0 million or more, the value shall be
determined based upon an opinion or appraisal issued by an accounting, appraisal
or investment banking firm of national standing) received by the Company or a
Restricted Subsidiary after the date of this Indenture from any Unrestricted
Subsidiary of the Company, to the extent that such dividends were not otherwise
included in Consolidated Net Income of the Company for such period, plus (v) to
the extent that any Unrestricted Subsidiary is redesignated as a Restricted
Subsidiary after the date of this Indenture, if as a result of such
redesignation, (x) the Fixed Charge Coverage Ratio of the Company on a pro forma
basis is lower than such ratio immediately prior thereto, then the lesser of (A)
the fair market value of the Company's Investment in such Subsidiary as of the
date of such redesignation or (B) such fair market value as of the date on which
such Subsidiary was originally designated as an Unrestricted Subsidiary or (y)
the Fixed Charge Coverage Ratio of the Company on a pro forma basis is equal to
or higher than such ratio immediately prior thereto, the fair market value of
the Company's Investment in such Subsidiary as of the date of such
redesignation.
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Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph will not prohibit (1) the payment of any
dividend or the consummation of any irrevocable redemption within 60 days after
the date of declaration of such dividend or notice of such redemption if the
dividend or payment of the redemption price, as the case may be, would have been
permitted on the date of declaration or notice; (2) if no Event of Default shall
have occurred and be continuing or shall occur as a consequence thereof, the
acquisition of any Capital Stock of the Company (the "Retired Capital Stock"),
either (i) solely in exchange for Qualified Capital Stock of the Company (the
"Refunding Capital Stock"), or (ii) through the application of the net proceeds
of a substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of Qualified Capital Stock of the Company, and, in the case of
subclause (i) of this clause (2), if immediately prior to the retirement of the
Retired Capital Stock the declaration and payment of dividends thereon was
permitted under clause (3) of this paragraph, the declaration and payment of
dividends on the Refunding Capital Stock in an aggregate amount per year no
greater than the aggregate amount of dividends per annum that was declarable and
payable on such Retired Capital Stock immediately prior to such retirement;
provided that at the time of the declaration of any such dividends on the
Refunding Capital Stock, no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof; (3) if no Default or
Event of Default shall have occurred and be continuing or would occur as a
consequence thereof, the declaration and payment of dividends to holders of any
class or series of Designated Preferred Stock (other than Disqualified Stock)
issued after the date of this Indenture (including, without limitation, the
declaration and payment of dividends on Refunding Capital Stock in excess of the
dividends declarable and payable thereon pursuant to clause (2) of this
paragraph); provided that, at the time of such issuance, the Company, after
giving effect to such issuance on a pro forma basis, would have had a
Consolidated Fixed Charge Coverage Ratio of at least 2.0 to 1.0 for the most
recent Four- Quarter Period; (4) the repurchase, redemption or other acquisition
or retirement for value of any Equity Interests of Holdings or the Company or
any Subsidiary of the Company held by any former member of the Holdings' or the
Company's (or any of their Subsidiaries') management committee or any former
officer, employee or director of Holdings or the Company pursuant to any equity
subscription agreement, stock option agreement, employment agreement or other
similar agreements and any dividends or distributions to Holdings to fund such
purchase, redemption or other acquisition or retirement; provided that (A) the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed (x) $1.5 million in any calendar year (with
unused amounts in any calendar year being carried over to succeeding calendar
years) plus (y) the aggregate cash proceeds received by Holdings or the Company
during such calendar year from any reissuance of Equity Interests by Holdings or
the Company to members of management of the Company and its Restricted
Subsidiaries and (B) no Default or Event of Default shall have occurred and be
continuing immediately after such transaction; provided, further that the
aggregate cash proceeds referred to in (y) above shall be excluded from clause
(c)(ii) of the preceding paragraph; (5) the making of distributions, loans or
advances to Holdings in an amount not to exceed $1.5 million per annum in order
to permit Holdings to pay the ordinary operating expenses of Holdings
(including, without limitation, directors' fees, indemnification obligations,
professional fees and expenses); (6) if no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof, other
Restricted Payments in an aggregate amount not to exceed $7.5 million since the
date of this Indenture; (7) repurchases of Capital Stock deemed to occur upon
the exercise of stock options if such Capital Stock represents a portion of the
exercise price thereof; (8) distributions to Holdings and the Current Owners to
fund the Transactions and (9) so long as the Company is treated as a partnership
or disregarded as an entity separate from its owners for federal income tax
purposes, distributions to the partners of the Company in an amount with respect
to any period after June 30, 1998 not to exceed the Tax Amount of the Company
for such period.
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The Management Committee 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 will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. 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.
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.
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly an indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to (a) pay dividends or make any
other distributions on or in respect of its Capital Stock, (b) make loans or
advances or to pay any Indebtedness or other obligation owed to the Company or
any other Restricted Subsidiary of the Company or (c) transfer any of its
property or assets to the Company or any other Restricted Subsidiary of the
Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) the Indenture; (3) non-assignment provisions
of any contract or any lease entered into in the ordinary course of business;
(4) any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person or the properties or assets of the Person so
acquired; (5) agreements existing on the date of the Indenture (including,
without limitation, the Senior Credit Facilities); (6) restrictions on the
transfer of assets subject to any Lien permitted under the Indenture imposed by
the holder of such Lien; (7) restrictions imposed by any agreement to sell
assets or Capital Stock permitted under the Indenture to any Person pending the
closing of such sale; (8) any agreement or instrument governing Capital Stock of
any Person that is in effect on the date such Person is acquired by the Company
or a Restricted Subsidiary of the Company; (9) any Purchase Money Note, or other
Indebtedness or other contractual requirements of a Securitization Entity in
connection with a Qualified Securitization Transaction; provided that such
restrictions apply only to such Securitization Entity; (10) other Indebtedness
permitted to be incurred subsequent to the date of this Indenture pursuant to
Section 4.09; provided that any such restrictions are ordinary and customary
with respect to the type of Indebtedness or preferred stock being incurred or
issued (under the relevant circumstances); (11) restrictions on cash or other
deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business; and (12) any encumbrances or restrictions imposed
by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (1) through (11) above;
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the good faith
judgment of the Management Committee, no more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividend or
other payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.
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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 and that the Company
shall not issue any Disqualified Stock and shall not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Issuers may incur Indebtedness or issue shares of Disqualified
Stock and the Company's Restricted Subsidiaries that are Subsidiary Guarantors
may incur Indebtedness or issue shares of preferred stock if (i) no Default or
Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of any such Indebtedness or the issuance of any
such Disqualified Stock, and (ii) the Consolidated Fixed Charge Coverage Ratio
for the Company's most recently ended Four-Quarter Period would have been at
least 2.0 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, at the beginning
of such Four-Quarter Period.
The provisions of the first paragraph of this covenant will not apply
to the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Indebtedness"):
(i) the Notes issued in the Offering and the Subsidiary Guarantees
thereof;
(ii) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness incurred pursuant to one or more Credit Facilities in an
aggregate principal amount at any time outstanding (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company and its Subsidiaries thereunder) not to exceed the
sum of (a) $50.0 million (which amount shall initially be utilized for term
Indebtedness) plus (b) the greater of (I) the Borrowing Base or (II) $275.0
million, less, in the case of clauses (a) and (b)(II), taken together, (A) the
aggregate amount of Indebtedness of Securitization Entities at the time
outstanding less (B) the amount of all optional or mandatory principal
payments actually made by the Company or any of its Restricted Subsidiaries
since the date of this Indenture in respect of term loans under Credit
Facilities incurred under this clause (ii) (excluding any such payments to the
extent refinanced at the time of payment under a Credit Facility), and (C)
further reduced by (X) any repayments of revolving credit borrowings under
Credit Facilities that are applied in accordance with Section 4.10 and (Y) any
Attributable Debt incurred in pursuant to Section 4.16;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness under Currency Agreements;
(iv) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness;
(v) Interest Swap Obligations of the Company and its Restricted
Subsidiaries covering Indebtedness of the Company and its Restricted
Subsidiaries; provided that any Indebtedness to which any such Interest Swap
Obligations correspond is otherwise permitted to be incurred under this
Indenture; and provided, further, that such Interest Swap Obligations are
entered into, in the judgment of the Company, to protect the Company and its
Restricted Subsidiaries from fluctuation in interest rates on its outstanding
Indebtedness;
(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,
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however, that (i) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in cash of
all Obligations with respect to the Notes and (ii)(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 Subsidiary thereof and (B) any
sale or other transfer of any such Indebtedness to a Person that is not either
the Company or a Restricted Subsidiary thereof shall be deemed, in each case,
to constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by this
clause (vi);
(vii) the incurrence of Acquired Indebtedness of Restricted Subsidiaries
of the Company to the extent the Company could have incurred such Indebtedness
in accordance with the first paragraph of this covenant on the date such
Indebtedness became Acquired Indebtedness;
(viii) Guarantees by the Company and the Subsidiary Guarantors of each
other's Indebtedness; provided that such Indebtedness is permitted to be
incurred under this Indenture;
(ix) Indebtedness (including Capitalized Lease Obligations) incurred by
the Company or any of its Restricted Subsidiaries to finance the purchase,
lease or improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any Person
owning such assets) in an aggregate principal amount outstanding not to exceed
5% of Total Assets at the time of any incurrence thereof (including any
Refinancing Indebtedness with respect thereto) (which amount may, but need
not, be incurred in whole or in part under the Senior Credit Facilities);
(x) the incurrence of Indebtedness (including letters of credit) in
respect of workers' compensation claims, self-insurance obligations,
performance, surety, bid or similar bonds and completion guarantees provided
by the Company or a Restricted Subsidiary in the ordinary course of business
and consistent with past practices;
(xi) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification, adjustment
of purchase price, earn out or other similar obligations, in each case,
incurred or assumed in connection with the disposition of any business, assets
or a Restricted Subsidiary of the Company, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of financing such
acquisition; provided that the maximum assumable liability in respect of all
such Indebtedness shall at no time exceed the gross proceeds actually received
by the Company and its Restricted Subsidiaries in connection with such
disposition;
(xii) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary of
the Company in the ordinary course of business;
(xiii) any refinancing, modification, replacement, renewal, restatement,
refunding, defeasance, deferral, extension, substitution, supplement,
reissuance or resale of existing or future Indebtedness (other than
intercompany Indebtedness), including any additional Indebtedness incurred to
pay interest or premiums required by the instruments governing such existing
or future Indebtedness as in effect at the time of issuance thereof ("Required
Premiums") and fees in connection therewith ("Refinancing Indebtedness");
provided that (1) any such event shall not directly or indirectly result in an
increase in the aggregate principal amount of Permitted Indebtedness (except
to the extent such
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increase is a result of a simultaneous incurrence of additional Indebtedness
(A) to pay Required Premiums and related fees or (B) otherwise permitted to be
incurred under this Indenture) of the Company and its Restricted Subsidiaries,
(2) such Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has 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, (3) if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries
of additional Indebtedness and/or the issuance of Disqualified Stock in an
aggregate principal amount or aggregate liquidation value, as applicable (or
accreted value, as applicable), at any time outstanding, including all
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xiv), not to exceed $20
million; and
(xv) the incurrence by a Securitization Entity of Indebtedness in a
Qualified Securitization Transaction that is Non-Recourse Debt (except for
Standard Securitization Undertakings) with respect to the Company and its
other Restricted Subsidiaries.
The Issuers shall also not incur any Indebtedness (including Permitted
Indebtedness) that is contractually subordinated in right of payment to any
other Indebtedness of the Issuers unless such Indebtedness is also contractually
subordinated in right of payment to the Notes on substantially identical terms;
provided, however, that no Indebtedness of the Issuers shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Issuers solely by virtue of being unsecured.
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 Indebtedness described in clauses (i) through (xv) above
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Issuers shall, in their 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, the payment of
interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Stock in the form of
additional shares of the same class of Disqualified Stock shall not be deemed to
be an incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this Section 4.09; provided, in each such case, that the amount
thereof is included in Consolidated 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 the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by the
Management Committee), (ii) at least 75% of the consideration received by the
Company or the Restricted Subsidiary, as the case may be, from such Asset Sale
shall be cash or Cash Equivalents; 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
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any such Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee of any such
assets, (b) any notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are immediately converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received), and (c) any Designated Noncash Consideration received by the Company
or any of its Restricted Subsidiaries in such Asset Sale having an aggregate
fair market value, taken together with all other Designated Noncash
Consideration received pursuant to this clause (c) that is at that time
outstanding, not to exceed 10% of Total Assets at the time of the receipt of
such Designated Noncash Consideration (with the fair market value of each item
of Designated Noncash Consideration being measured at the time received and
without giving effect to subsequent changes in value), shall be deemed to be
cash for the purposes of this provision, and (iii) upon the consummation of an
Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to
apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of
receipt thereof to reinvest in Productive Assets or to repay Indebtedness under
the Senior Credit Facilities. Pending the final application of any such Net Cash
Proceeds, the Company or such Restricted Subsidiary may invest such Net Cash
Proceeds in Cash Equivalents.
On the 366th day after an Asset Sale or such earlier date, if any, as
the Management Committee or such Restricted Subsidiary determines not to apply
the Net Cash Proceeds relating to such Asset Sale as set forth in clause (iii)
of the preceding paragraph (each, a "Net Proceeds Offer Trigger Date"), the
aggregate amount of Net Cash Proceeds that have not been applied on or before
such Net Proceeds Offer Trigger Date as permitted in clause (iii) of the
preceding paragraph (each a "Net Proceeds Offer Amount") shall be applied by the
Company or such Restricted Subsidiary to make an offer to purchase (the "Net
Proceeds Offer") on a date (the ''Net Proceeds Offer Payment Date") not less
than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders on a pro rata basis that amount of Notes equal to
the Net Proceeds Offer Amount at a price equal to 100% of the principal amount
of the Notes to be purchased, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase; provided, however, that if at
any time any non cash consideration (including any Designated Noncash
Consideration) received by the Company or any Restricted Subsidiary of the
Company, as the case may be, in connection with any Asset Sale is converted into
or sold or otherwise disposed of for cash (other than interest received with
respect to any such non cash consideration), then such conversion or disposition
shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds
thereof shall be applied in accordance with this Section 4.10.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less
than $10.0 million, the application of the Net Cash Proceeds constituting such
Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such
time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by the
Company and its Restricted Subsidiaries aggregates at least $10.0 million, at
which time the Company or such Restricted Subsidiary shall apply all Net Cash
Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred
to make a Net Proceeds Offer (the first date the aggregate of all such deferred
Net Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to
be a "Net Proceeds Offer Trigger Date").
Notwithstanding the two immediately preceding paragraphs, the Company
and its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent (i) at least 75% of the
consideration for such Asset Sale constitutes Productive Assets, cash, Cash
Equivalents and/or Marketable Securities and (ii) such Asset Sale is for fair
market value (as determined in good faith by the Management Committee of the
General Partner); provided that
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any consideration not constituting Productive Assets received by the Company or
any of its Restricted Subsidiaries in connection with any Asset Sale permitted
to be consummated under this paragraph shall be subject to the provisions of the
two preceding paragraphs.
Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in Section 3.09. To the extent that the aggregate amount of Notes
tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds Offer
Amount, the Company may use any remaining Net Proceeds Offer Amount for general
corporate purposes. Upon completion of any such Net Proceeds Offer, the Net
Proceeds Offer Amount shall be reset at zero.
The Issuers 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 pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of the Indenture, the Issuers shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue thereof.
Section 4.11. Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to occur any
transaction or series or related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(b) below and (y) Affiliate Transactions on terms that are not materially less
favorable than those that would have been obtained in a comparable transaction
at such time on an arm's length basis from a Person that is not an Affiliate of
the Company or any of its Restricted Subsidiaries; provided, however, that for a
transaction or series of related transactions with an aggregate value of $5.0
million or more, at the Company's option, either (i) a majority of the
disinterested members of the Management Committee shall determine in good faith
that such Affiliate Transaction is on terms that are not materially less
favorable than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's length basis from a Person that is not an
Affiliate of the Company or (ii) the Management Committee or any such Restricted
Subsidiary party to such Affiliate Transaction shall have received an opinion
from a nationally recognized investment banking firm that such Affiliate
Transaction is on terms not materially less favorable than those that might
reasonably have been obtained in a comparable transaction at such time on an
arm's length basis from a Person that is not an Affiliate of the Company; and
provided, further, that for an Affiliate Transaction with an aggregate value of
$10.0 million or more the Management Committee or any such Restricted Subsidiary
party to such Affiliate Transaction shall have received an opinion from a
nationally recognized investment banking firm that such Affiliate Transaction is
on terms not materially less favorable than those that might reasonably have
been obtained in a comparable transaction at such time on an arm's length basis
from a Person that is not an Affiliate of the Company.
(b) The foregoing restrictions shall not apply to (i) reasonable fees
and compensation paid to and indemnity provided on behalf of, officers,
directors, employee or consultants of the Company or any Subsidiary as
determined in good faith by the Management Committee or senior management; (ii)
transactions exclusively between or among the Company and any of its Restricted
Subsidiaries or exclusively between or among such Restricted Subsidiaries,
provided such transactions
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are not otherwise prohibited by this Indenture; (iii) any agreement as in effect
as of the date of this Indenture or any amendment or replacement thereto or any
transaction contemplated thereby (including pursuant to any amendment or
replacement thereto) so long as any such amendment or replacement agreement is
not more disadvantageous to the Holders in any material respect than the
original agreement as in effect on the date of this Indenture; (iv) Restricted
Payments permitted by this Indenture; (v) the payment of customary annual
management, consulting and advisory fees and related expenses to the Principals
and their Affiliates made pursuant to any financial advisory, financing,
underwriting or placement agreement or in respect of other investment banking
activities, including, without limitation, in connection with acquisitions or
divestitures which are approved by the Management Committee or such Restricted
Subsidiary in good faith; (vi) payments or loans to employees or consultants
that are approved by the Management Committee in good faith; (vii) the existence
of, or the performance by the Company or any of its Restricted Subsidiaries of
its obligations under the terms of, any securityholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which it
is a party as of the date of this Indenture and any similar agreements which it
may enter into thereafter; provided, however, that the existence of, or the
performance by the Company or any of its Restricted Subsidiaries of obligations
under, any future amendment to any such existing agreement or under any similar
agreement entered into after the date of this Indenture shall only be permitted
by this clause (vii) to the extent that the terms of any such amendment or new
agreement are not disadvantageous to the Holders of Notes in any material
respect; (viii) transactions permitted by, and complying with, the provisions of
Section 5.01; (ix) transactions effected as part of a Qualified Securitization
Transaction; (x) transactions with customers, clients, suppliers, or purchasers
or sellers of goods or services, in each case in the ordinary course of business
and otherwise in compliance with the terms of this Indenture which are fair to
the Company or its Restricted Subsidiaries, in the reasonable determination of
the Management Committee or the senior management thereof, or are on terms at
least as favorable as might reasonably have been obtained at such time from an
unaffiliated party; and (xi) any Affiliate Transaction with (A) a Principal or
Related Party not in excess of $1.0 million or (B) any other Person not in
excess of $100,000.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens of any kind
against or upon any of its property or assets, or any proceeds therefrom, except
for Permitted Liens.
Section 4.13. Conduct of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any businesses a majority of whose revenues are not
derived from the same or reasonably similar, ancillary or related to, or a
reasonable extension, development or expansion of, the businesses in which the
Company and its Restricted Subsidiaries are engaged on the date of this
Indenture.
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 Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or
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franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Management Committee shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its 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. REPURCHASE AT THE OPTION OF HOLDERS.
Upon the occurrence of a Change of Control, each Holder of Notes will
have the right to require the Issuers 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
(the "Change of Control Payment") 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. Within ten days following any Change of
Control, the Issuers will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date 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"), pursuant to the procedures
required by this Indenture and described in such notice. The Issuers will 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 the Notes as a
result of a Change of Control.
On the Change of Control Payment Date, the Issuers shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) 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 (3) 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
Issuers. 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. The Issuers shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of this Indenture are applicable. Except as
described above with respect to a Change of Control, this Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Issuers repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The Issuers 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 Indenture applicable to a Change of Control Offer made by the
Issuers and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
Section 4.16. Sale Leaseback Transactions
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any of its Restricted Subsidiaries
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may enter into a sale and leaseback transaction if (i) the Company or such
Restricted Subsidiary, as applicable, could have (a) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to either (A) the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09 or (B) clause (ii) of Section 4.09
and (b) incurred a Lien to secure such Indebtedness pursuant to Section 4.12,
(ii) the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (as determined in good faith by the Management
Committee and set forth in an Officers' Certificate delivered to the Trustee) of
the property that is the subject of such sale and leaseback transaction and
(iii) the transfer of assets in such sale and leaseback transaction is permitted
by, and the Company applies the proceeds of such transaction in compliance with
Section 4.10.
Section 4.17. Additional Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries shall acquire or
create another domestic Subsidiary after the date of this Indenture, then such
newly acquired or created Subsidiary shall execute a Subsidiary Guarantee and
deliver an Opinion of Counsel, in accordance with the terms of this Indenture;
provided, that all Subsidiaries that have properly been designated as
Unrestricted Subsidiaries in accordance with this Indenture shall not be subject
to the requirements of this Section 4.18 for so long as they continue to
constitute Unrestricted Subsidiaries.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, 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 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 to which such sale, assignment, transfer, 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 the entity or Person to which such sale,
assignment, transfer, conveyance or other disposition shall have been made
assumes all the obligations of the Company under the Registration Rights
Agreement, the Notes and this Indenture pursuant to supplemental indentures in
forms reasonably satisfactory to the Trustee; (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 Restricted Subsidiary of
the Company and except in the case of a merger entered into solely for the
purpose of incorporating the Company or reincorporating the Company in another
jurisdiction, the Company or the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made will,
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 Consolidated Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09. The Company may not, directly or indirectly, lease
all or substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 5.01 shall not
be applicable to a merger, sale, assignment, transfer, conveyance or other
disposition of assets between or among the Company and any of its Restricted
Subsidiaries. Notwithstanding the foregoing, the Company is
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<PAGE>
permitted to reorganize as a corporation in accordance with the procedures
established in this Indenture (and AC Capital Corp. may thereafter liquidate);
provided that the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Trustee confirming
that such reorganization (and, if applicable, liquidation of AC Capital Corp.)
is not adverse to holders of the Notes from a U.S. federal tax standpoint (it
being recognized that such reorganization shall not be deemed adverse to the
holders of the Notes solely because (i) of the accrual of deferred tax
liabilities resulting from such reorganization or (ii) the successor or
surviving corporation (a) is subject to income tax as a corporate entity or (b)
is considered to be an "includible corporation" of an affiliated group of
corporations within the meaning of the Code or any similar state or local law)
and certain other conditions are satisfied.
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 fails to pay interest on any Notes when the same becomes
due and payable if the default continues for a period of 30 days;
(b) the Company fails to pay the principal on any Notes when such
principal becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Notes tendered pursuant to
a Change of Control Offer or a Net Proceeds Offer);
(c) the Company or any of its Restricted Subsidiaries fails to comply with
the provisions of the covenants described in Section 4.10 or 4.15 hereof;
(d) the Company defaults in the observance or performance of any other
covenant or agreement contained in this Indenture if the default continues for a
period of 30 days after the Issuers receive written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes;
(e) the Company fails to pay at final stated maturity (giving effect to
any extensions thereof) the principal amount of any Indebtedness of the Company
or any Restricted Subsidiary (other than a
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Securitization Entity), which failure continues for at least 10 days, or the
acceleration of the maturity of any such Indebtedness, which acceleration
remains uncured and unrescinded for at least 10 days, if the aggregate principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness in default for failure to pay principal at final maturity or
which has been accelerated, aggregates $10.0 million or more at any time;
(f) one or more judgments in an aggregate amount in excess of $10.0
million shall have been rendered against the Issuers or any of their Significant
Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a
period of 60 days after such judgment or judgments become final and non
appealable;
(g) the Company or any of its Significant Subsidiaries or any group of
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;
(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 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 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
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 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 case for
any reason to be in full force and effect or any Subsidiary Guarantor, or any
Person acting on behalf of any Subsidiary Guarantor, shall deny or disaffirm its
obligations under such Subsidiary Guarantee.
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<PAGE>
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 Issuers, any
Significant Subsidiary or any group of Significant 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 outstanding Notes
may declare the principal of and accrued interest on all the Notes to be due and
payable by notice in writing to the Issuers and the Trustee specifying the
respective Event of Default and that such notice is a "notice of acceleration"
(the "Acceleration Notice"), and the same shall become immediately due and
payable. If an Event of Default specified in clause (g) or (h) of Section 6.01
occurs with respect to the Issuers, any of the Company's Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, then such amount shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder of Notes.
At any time after a declaration of acceleration with respect to the
Notes as described in the preceding paragraph, the Holders of a majority in
principal amount of Notes may rescind and cancel such declaration and its
consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Issuers have paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of an Event of Default of the type described in
clause (vi) of the description above of Events of Default, the Trustee shall
have received an Officers' Certificate and an Opinion of Counsel that such Event
of Default has been cured or waived. The holders of a majority in principal
amount of Notes may waive any existing Default or Event of Default under this
Indenture, and its consequences, except a default in the payment of the
principal of or interest on any Notes.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding payment of the premium that the Issuers would have had
to pay if the Issuers then had elected to redeem the Notes pursuant to Section
3.07, an equivalent premium shall also become and be immediately due and payable
to the extent permitted by law upon the acceleration of the Notes. If an Event
of Default occurs prior to August 1, 2003 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Issuers with the intention
of avoiding the prohibition on redemption of the Notes prior to August 1, 2003,
then the premium set forth below for each of the years beginning on August 1 of
such year shall also become immediately due and payable to the extent permitted
by law upon the acceleration of the Notes (expressed as a percentage of the
principal amount of the Notes on the date of payment that would otherwise be due
but for the provisions of this sentence):
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
1998................................................ 113.833%
1999................................................ 112.104%
2000................................................ 110.375%
2001................................................ 108.646%
2002................................................ 106.917%
</TABLE>
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<PAGE>
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 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
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(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 Issuers 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 Issuers
(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.
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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 Issuers 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
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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
negligent action, its own 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
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), (c), (e) and (f) of this Section and Section 7.02.
(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 Issuers. 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 misconduct or 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.
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<PAGE>
(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.
(g) Except with respect to Section 4.01 hereof, the Trustee shall have
no duty to inquire as to the performance of the Issuers' covenants in Article 4
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.01(a), 6.01(b) and 4.01 or (ii) any Default or Event of Default of
which the Trustee shall have received written notification or obtained actual
knowledge.
(h) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Trustee
may, in its discretion, make such further inquiry or investigation into such
facts or matters as it may see fit and if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company personally or by agent or attorney.
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 Issuers or any
Affiliate of the Issuers 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 Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' 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.
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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 (S) 313(a) (but if no event described in
TIA (S) 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA
(S) 313(b)(2). The Trustee shall also transmit by mail all reports as required
by TIA (S) 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 (S) 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 Issuers 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 Issuers 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 Issuers 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 Issuers (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Issuers 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 Issuers promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Issuers shall not relieve the Issuers of their obligations hereunder. The
Issuers shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Issuers shall pay the reasonable
fees and expenses of such counsel. The Issuers need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The obligations of the Issuers under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Issuers' 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.
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The Trustee shall comply with the provisions of TIA (S) 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 Issuers. 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 Issuers in writing. The Issuers 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 Issuers 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 Issuers.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, 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 Issuers. 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 Issuers' obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
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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.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
Section 7.11. Preferential Collection of Claims Against Issuers.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 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 Issuers may, at the option of the Management Committee evidenced
by a resolution set forth in an Officer's 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 Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers 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 Issuers 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 demand of
and at the expense of the Issuers, 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, if any, and interest on such Notes when such payments
are due, (b) the Issuers' 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 Issuers' obligations in connection
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therewith and (d) this Article Eight. Subject to compliance with this Article
Eight, the Issuers may exercise their 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 Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers 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 Issuers 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 Issuers' 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 Issuers must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Notes, cash in U.S. 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, if any, interest and Liquidated
Damages, if any, on all outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Issuers must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of an election under Section 8.02 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Issuers have
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;
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(c) in the case of an election under Section 8.03 hereof, the Issuers
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 (including this Indenture and the Senior Credit Facilities) 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 Issuers shall have delivered to the Trustee an Opinion of Counsel
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 Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders of Notes over the other creditors of the Issuers with
the intent of defeating, hindering, delaying or defrauding creditors of the
Issuers or others; and
(h) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for 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 Issuers 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 Issuers 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.
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Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the request
of the Issuers 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 Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuers, 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 Issuers on its request or (if then held by the Issuers) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuers 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 Issuers 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 Issuers.
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 Issuers' 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 Issuers make any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of their obligations, the Issuers 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 Issuers, the
Subsidiary Guarantors and the Trustee may amend or supplement this Indenture or
the Notes without the consent of any Holder of Notes:
(a) to cure any ambiguity, defect or inconsistency;
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(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 Issuer's obligations to the
Holders of the Notes by a successor to the Issuers pursuant to Article 5 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 under this Indenture of any such Holder;
(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 Subsidiary Guarantor to execute a supplemental indenture
and/or a Subsidiary Guarantee with respect to the Notes.
Upon the request of the Issuers accompanied by a resolution of the
Management Committee 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 Issuers and
the Subsidiary 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, the Issuers and the
Trustee may amend or supplement this Indenture (including Sections 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 then outstanding (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), 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).
Upon the request of the Issuers accompanied by a resolution of the
Management Committee 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 Issuers 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
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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 Issuers shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers 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 Issuers 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, except as provided above with respect to 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, if any, or interest 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 interest on the Notes;
(g) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
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
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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 may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuers 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 Issuers may not sign an amendment or supplemental Indenture until the
Management Committee 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
SUBSIDIARY GUARANTEES
Section 10.01. Subsidiary Guarantee.
Subject to this Article 10, each of the Subsidiary 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 Issuers 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 Issuers 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 Subsidiary Guarantors shall
be jointly and severally obligated to pay the same immediately. Each Subsidiary
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
The Subsidiary 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
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to any provisions hereof or thereof, the recovery of any judgment against the
Issuers, 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 Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Issuers, any right to require a proceeding first against the Issuers,
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 Issuers, the Subsidiary Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Issuers or
the Subsidiary 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 Subsidiary 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 Subsidiary Guarantor further agrees that, as between the Subsidiary
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 Subsidiary Guarantors for the purpose of
this Subsidiary Guarantee. The Subsidiary Guarantors shall have the right to
seek contribution from any non-paying Subsidiary Guarantor so long as the
exercise of such right does not impair the rights of the Holders under the
Guarantee.
Section 10.02. Limitation on Subsidiary Guarantor Liability.
Each Subsidiary 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 Subsidiary 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 Subsidiary Guarantors
hereby irrevocably agree that the obligations of such Subsidiary Guarantor under
its Subsidiary Guarantee and this Article 10 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 Subsidiary 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
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under this Article 10, result in the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer
or conveyance.
Section 10.03. Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Subsidiary Guarantor on each Note authenticated
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and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Subsidiary Guarantor by its President or one of its Vice Presidents.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee
set forth in Section 10.01 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 Subsidiary Guarantors.
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.24 hereof,
the Company shall cause such Subsidiaries to execute supplemental indentures to
this Indenture and Subsidiary Guarantees in accordance with Section 4.24 hereof
and this Article 10, to the extent applicable.
Section 10.04. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Subsidiary
Guarantor (other than a Subsidiary Guarantor) unless:
(a) subject to Section 10.05 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Subsidiary
Guarantor) assumes all the obligations of such Subsidiary Guarantor, pursuant to
a supplemental indenture substantially in the form included in Exhibit F and
otherwise reasonably satisfactory to the Trustee, under the Notes, this
Indenture and the Registration Rights Agreement;
(b) immediately after giving pro forma effect to such transaction, no
Default or Event of Default exists; and
(c) the Company would be permitted by virtue of the Company's
Consolidated Fixed Charge Coverage Ratio, immediately after giving pro forma
effect to such transaction, to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated 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 Subsidiary Guarantor, such successor Person shall succeed to
and be substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as a Subsidiary 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
73
<PAGE>
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 Subsidiary Guarantor with
or into the Company or another Subsidiary Guarantor, or shall prevent any sale
or conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company or another Subsidiary Guarantor.
Section 10.05. Releases Following Sale of Assets.
In the event of a sale or other disposition of all or substantially
all of the assets of any Subsidiary Guarantor, by way of merger, consolidation
or otherwise, or a sale or other disposition of all of the capital stock of any
Subsidiary Guarantor, then such Subsidiary Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise, of all
of the capital stock of such Subsidiary 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 Subsidiary 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 Subsidiary Guarantor from its obligations under its
Subsidiary Guarantee.
Any Subsidiary 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 Subsidiary Guarantor
under this Indenture as provided in this Article 10.
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA (S) 318(c), the imposed duties shall control.
Section 11.02. Notices.
Any notice or communication by the Issuers, any Subsidiary 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
74
<PAGE>
If to the Issuers or the Subsidiary Guarantors:
Anthony Crane Rental, L.P.
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Telecopier No.: (412) 469-0691
Attention: Investor Services
With a copy to:
Kirkland & Ellis
153 East 53rd Street
New York, NY 10022
Telecopier No.: (412) 446-4800
Attention: Lance Balk, Esq.
If to the Trustee:
State Street Bank and Trust Company
Goodwin Square, 23rd Floor
225 Asylum Street
Hartford, CT 06103
Telecopier No.: 860-244-1889
Attention: Dennis Fisher
The Issuers, any Subsidiary 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 (S) 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 Issuers mail a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
75
<PAGE>
Section 11.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Issuers,
the Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take
any action under this Indenture, the Issuers 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 11.05 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 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 11.05. 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 (S) 314(a)(4)) shall comply with the provisions of TIA
(S) 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 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 11.06. 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 11.07. No Personal Liability of Partners, Directors, Officers, Employees
and Stockholders.
No partner, director, officer, employee, incorporator or stockholder
of the Issuers, as such, or Subsidiary Guarantors, as such, shall have any
liability for any obligations of the Issuers or the Subsidiary Guarantors under
the Notes, any Subsidiary Guarantee or this Indenture or for any claim
76
<PAGE>
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of 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.
Section 11.08. 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 11.09. 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 11.10. Successors.
All agreements of the Issuers in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
Section 11.11. 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 11.12. 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 11.13. 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]
77
<PAGE>
SIGNATURES
Dated as of July 22, 1998
Anthony Crane Rental, L.P.
By: Anthony Crane Rental, Inc.,
its General Partner
By: /s/ David Mahokey
________________________________
Name: David Mahokey
Title: Chief Financial Officer
By: /s/ Dale Buckwalter
________________________________
Name: Dale Buckwalter
Title: Vice President
Anthony Crane Capital Corporation
By: /s/ David Mahokey
________________________________
Name: David Mahokey
Title: Chief Financial Officer
By: /s/ Dale Buckwalter
________________________________
Name: Dale Buckwalter
Title: Vice President
Anthony Crane Sales and Leasing, L.P.,
By: Anthony Crane Rental, Inc.,
its General Partner
By: /s/ David Mahokey
________________________________
Name: David Mahokey
Title: Chief Financial Officer
By: /s/ Dale Buckwalter
________________________________
Name: Dale Buckwalter
Title: Vice President
78
<PAGE>
Anthony Crane International, L.P.
By: Anthony Crane Rental, Inc.,
its general partner
By: /s/ David Mahokey
________________________________
Name: David Mahokey
Title: Chief Financial Officer
By: /s/ Dale Buckwalter
________________________________
Name: Dale Buckwalter
Title: Vice President
State Street Bank and Trust Company
By: /s/ Dennis Fisher
________________________________
Name: Dennis Fisher
Title: Assistant Vice President
79
<PAGE>
EXHIBIT A-1
(Face of Note)
================================================================================
(a) CUSIP/CINS_______________________
10 3/8% [Series A] [Series B] Senior Notes due 2008
No.____ $______
Anthony Crane Rental, L.P.
Anthony Crane Capital Corporation
promises to pay to______________________________________________
or registered assigns,
the principal sum of_______________________________________
Dollars on August 1, 2008.
Interest Payment Dates: February 1, and August 1
Record Dates: January 15, and February 1
Dated July 22, 1998
Anthony Crane Capital Corporation Anthony Crane Rental, L.P.
By:______________________________ By:____________________________
Name: Name:
Title: Title:
(SEAL) (SEAL)
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
By:________________________________
A-1-1
<PAGE>
(Back of Note)
10 3/8% [Series A] [Series B] Senior 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 ISSUERS.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
1. REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS NOTE IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT
OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)
(1), (2), (3) OR (7) OR REGULATION D UNDER THE SECURITIES ACT (AN "IAI"),
2. AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY)
OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND
A-1-2
<PAGE>
3. AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Anthony Crane Rental, L.P., a Pennsylvania limited
partnership (the "Company"), and Anthony Crane Capital Corporation, a Delaware
corporation ("AC Capital Corp." and, together with the Company, the "Issuers"),
promise to pay interest on the principal amount of this Note at 10 3/8% per
annum from February 1, 1999 until maturity and shall pay the Liquidated Damages
payable pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Issuers will pay interest and Liquidated Damages semi-annually on
February 1 and August 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 February 1, 1999. The Issuers 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 (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 Issuers will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the January 15 or July
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 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 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, 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.
A-1-3
<PAGE>
4. Indenture. The Company issued the Notes under an Indenture dated
as of July 22, 1998 (the "Indenture") between the Issuers 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 (S)(S) 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 $255.0 million
in aggregate principal amount.
5. Optional Redemption.
(a) Except as set forth below, the Notes will not be redeemable at
the Issuers' option prior to August 1, 2003. Thereafter, the Notes will be
subject to redemption at any time at the option of the Issuers, 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 August
1 of the years indicated below:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ----------------
<S> <C>
2003................................. 105.188%
2004................................. 103.458%
2005................................. 101.729%
2006 and thereafter.................. 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to August 1,
2001, the Issuers may on any one or more occasions redeem up to 35% of the
aggregate principal amount of Notes originally issued under the Indenture at a
redemption price of % of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the redemption date, with
the net cash proceeds of any Equity Offerings; provided that at least 65% of the
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 provided further that such redemption shall
occur within 120 days of the date of the closing of any such Equity Offering.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption 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 10 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.
A-1-4
<PAGE>
(b) If the Company or a Subsidiary consummates any Asset Sales,
within 25 days of each date on which the aggregate amount of Net Proceeds Offer
Amount exceeds $10 million, the Company shall commence an offer to all Holders
of Notes ("Net Proceeds 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 Net Proceeds Offer Amount 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 the aggregate amount of Notes (including any
Additional Notes) tendered pursuant to a Net Proceeds Offer is less than the Net
Proceeds Offer Amount, the Company (or such Subsidiary) may use such deficiency
for general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Net Proceeds Offer Amount,
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 Net
Proceeds 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 Subsidiary 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
Commission 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
A-1-5
<PAGE>
with the limitations set forth in the Indenture, or to allow any Subsidiary
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) the
Company fails to pay interest on any Notes when the same becomes due and payable
if the default continues for a period of 30 days, (ii) the Company fails to pay
the principal on any Notes when such principal becomes due and payable, at
maturity, upon redemption or otherwise (including the failure to make a payment
to purchase Notes tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer), (iii) the Company or any of its Restricted Subsidiaries fails
to comply with the provisions of the covenants described in Section 4.10 or 4.15
of the Indenture, (iv) the Company defaults in the observance or performance of
any other covenant or agreement contained in the Indenture if the default
continues for a period of 30 days after the Issuers receive written notice
specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least 25% of the outstanding principal amount of
the Notes, (v) the Company fails to pay at final stated maturity (giving effect
to any extensions thereof) the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary (other than a Securitization Entity), which
failure continues for at least 10 days, or the acceleration of the maturity of
any such Indebtedness, which acceleration remains uncured and unrescinded for at
least 10 days, if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for failure
to pay principal at final maturity or which has been accelerated, aggregates
$10.0 million or more at any time, (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 is held in any judicial proceeding to be unenforceable or
invalid or shall case for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under such Subsidiary
Guarantee. If any Event of Default 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 outsanding 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 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
interest on, or the principal of, 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 partner, director, officer,
employee, incorporator or stockholder, of the Company, as such, shall not have
any liability for any obligations of the Issuers under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
A-1-6
<PAGE>
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 Certificated Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Certificated Notes shall have all the rights set forth in the Registration
Rights Agreement dated as of July 22, 1998, between the Issuers and the parties
named on the signature pages thereof or, in the case of Additional Notes,
Holders of Restricted Global Notes and Restricted Certificated Notes shall have
the rights set forth in one or more registration rights agreements, if any,
between the Company and the other parties thereto, relating to rights given by
the Company to the purchasers of any Additional Notes (collectively, 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.
A-1-7
<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:
Anthony Crane Rental, L.P.
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Attention: Investor Services
A-1-8
<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 Issuers. 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.
A-1-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers
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
Issuers 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.
A-1-10
<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 Certificated Note, or exchanges of a part of
another Global Note or Certificated Note for an interest in this Global Note,
have been made:
<TABLE>
<CAPTION>
Principal Amount of
Amount of decrease in Amount of increase in this Global Note Signature of authorized
Principal Amount of Principal Amount of following such officer of Trustee or
Date of Exchange this Global Note this Global Note decrease (or increase) Note Custodian
---------------- ---------------- ---------------- ---------------------- --------------
<S> <C> <C> <C> <C>
</TABLE>
A-1-11
<PAGE>
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
================================================================================
(a) CUSIP/CINS ______________
10 3/8% [Series A] [Series B] Senior Notes due 2008
No.____ $________
Anthony Crane Rental, L.P.
Anthony Crane Capital Corporation
promises to pay to ___________________________________________
or registered assigns,
the principal sum of ____________________________________________
Dollars on August 1, 2008.
Interest Payment Dates: February 1, and August 1
Record Dates: January 15, and July 15
Dated July 22, 1998
Anthony Crane Capital Corporation Anthony Crane Rental, L.P.
By: _____________________________ By:_____________________________
Name: Name:
Title: Title:
(SEAL) (SEAL)
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
By:_________________________________
===============================================================================
A-2-1
<PAGE>
(Back of Regulation S Temporary Global Note)
10 3/8% [Series A] [Series B] Senior 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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & COMPANY OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & COMPANY OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & COMPANY, HAS AN INTEREST HEREIN.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
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 NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE 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 OF 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 FOREIGN 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 THE 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
OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
A-2-2
<PAGE>
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Anthony Crane Rental, L.P., a Pennsylvania limited
partnership (the "Company"), and Anthony Crane Capital Corporation, a Delaware
corporation ("AC Capital Corp." and, together with the Company, the "Issuers"),
promise to pay interest on the principal amount of this Note at 10 3/8% per
annum from February 1, 1999 until maturity and shall pay the Liquidated Damages
payable pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Issuers will pay interest and Liquidated Damages semi-annually on
February 1 and August 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 February 1, 1999. The Issuers 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; they 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 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 Issuers will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the January 15 or July
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, interest and Liquidated
Damages 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 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 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, 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 Issuers issued the Notes under an Indenture dated
as of July 22, 1998 (the "Indenture") among the Issuers and the Trustee. The
terms of the Notes include those stated in
A-2-3
<PAGE>
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 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. The Notes are secured obligations of the
Company limited to $255.0 million in aggregate principal amount.
5. Optional Redemption.
(a) Except as provided below, the Notes will not be redeemable at the
Issuers' option prior to August 1, 2003. Thereafter, the Notes will be subject
to redemption at any time at the option of the Issuers, 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 August 1 of the
years indicated below:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ---------------------
<S> <C>
2003 105.188%
2004 103.458%
2005 101.729%
2006 and thereafter 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to 2001, the
Issuers may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Notes originally issued under the Indenture at a redemption
price of % of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages thereon, if any, to the redemption date, with the net
cash proceeds of any Equity Offerings; provided that at least 65% of the
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 provided further that such redemption shall
occur within 120 days of the date of the closing of any such Equity Offering.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Issuers shall not be
required to make mandatory redemption 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, if any, to the date of purchase (the "Change of Control
Payment"). Within 10 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 Subsidiary consummates any Asset Sales,
within 25 days of each date on which the aggregate amount of Net Proceeds Offer
Amount exceeds $10 million, the Company shall commence an offer to all Holders
of Notes ("Net Proceeds Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes that may be purchased out of the
Net Proceeds Offer Amount at an offer price in cash in an amount equal to 100%
of the principal
A-2-4
<PAGE>
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 the aggregate amount
of Notes tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds
Offer Amount, the Company (or such Subsidiary) may use such deficiency for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Net Proceeds Offer Amount,
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 Net
Proceeds 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, it 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 distribution compliance 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 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 any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture 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 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, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
A-2-5
<PAGE>
12. Defaults and Remedies. Events of Default include: (i) the
Company fails to pay interest on any Notes when the same becomes due and payable
if the default continues for a period of 30 days, (ii) the Company fails to pay
the principal on any Notes when such principal becomes due and payable, at
maturity, upon redemption or otherwise (including the failure to make a payment
to purchase Notes tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer), (iii) the Company or any of its Restricted Subsidiaries fails
to comply with the provisions of the covenants described in Section 4.10 or 4.15
of the Indenture, (iv) the Company defaults in the observance or performance of
any other covenant or agreement contained in the Indenture if the default
continues for a period of 30 days after the Issuers receive written notice
specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least 25% of the outstanding principal amount of
the Notes, (v) the Company fails to pay at final stated maturity (giving effect
to any extensions thereof) the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary (other than a Securitization Entity), which
failure continues for at least 10 days, or the acceleration of the maturity of
any such Indebtedness, which acceleration remains uncured and unrescinded for at
least 10 days, if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for failure
to pay principal at final maturity or which has been accelerated, aggregates
$10.0 million or more at any time, (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 this Indenture, any
Subsidiary Guarantee is held in any judicial proceeding to be unenforceable or
invalid or shall case for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under such Subsidiary
Guarantee. If any Event of Default 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 outtanding 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 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
interest on, or the principal of, 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 partner, director, officer,
employee, incorporator or stockholder, of the Issuers, as such, shall not have
any liability for any obligations of the Issuers under the Notes 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.
A-2-6
<PAGE>
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 Certificated Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Certificated Notes shall have all the rights set forth in the Registration
Rights Agreement dated as of July 22, 1998, between the Issuers and the parties
named on the signature pages thereof or, in the case of Additional Notes,
Holders of Restricted Global Notes and Restricted Certificated Notes shall have
the rights set forth in one or more registration rights agreements, if any,
between the Company and the other parties thereto, relating to rights given by
the Company to the purchasers of any Additional Notes (collectively, 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.
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:
Anthony Crane Rental, L.P.
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Attention: Investor Services
A-2-7
<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 Issuers. 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.
A-2-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers
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
Issuers 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.
A-2-9
<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:
<TABLE>
<CAPTION>
Amount of Principal Amount
decrease in Amount of increase of this Global Note Signature of
Principal Amount in Principal following such authorized officer
of Amount of decrease (or of Trustee or Note
Date of Exchange this Global Note this Global Note increase) Custodian
- ----------------- ------------------ ------------------------ --------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
A-2-10
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Anthony Crane Rental, L.P.
Anthony Crane Capital Corporation
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
[Registrar address block]
Re: 10 3/8% Senior Notes due 2008
-----------------------------
Reference is hereby made to the Indenture, dated as of July 22, 1998
(the "Indenture"), between Anthony Crane Rental L.P. and Anthony Crane Capital
---------
Corporation, as issuers (the "Issuers"), and State Street Bank and Trust
-------
Company, 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
----------------------------------------------------------------------
RULE 144A GLOBAL NOTE OR A CERTIFICATED 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 Certificated Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Certificated 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 Certificated Note will be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Rule 144A Global Note and/or the
Certificated 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
- ---------------------------------------------------------------------
CERTIFICATED 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
B-1
<PAGE>
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 Distribution
Compliance 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 Certificated 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 Certificated Note and in the Indenture and the Securities
Act.
3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
-------------------------------------------------------------------
INTEREST IN THE IAI GLOBAL NOTE OR A CERTIFICATED 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 Certificated
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 Certificated
Notes and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form of Exhibit
D to the Indenture and (2) if such Transfer is in respect of a principal amount
of Notes at the time of transfer of less than $250,000, 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 Certificated Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the IAI Global Note and/or
the Certificated Notes and in the Indenture and the Securities Act.
B-2
<PAGE>
4. [_] Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Certificated 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
Certificated 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 Certificated 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 Certificated 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 Certificated 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 Certificated Note will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Restricted Certificated 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:_________,_____
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] Rule 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Global Note (CUSIP _________), or
(iii) [_] IAI Global Note (CUSIP ________); or
(b) [_] a Restricted Certificated Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] Rule 144A Global Note (CUSIP ________), or
(ii) [_] Regulation S Global Note (CUSIP ________), or
(iii) [_] IAI Global Note (CUSIP ________); or
(iv) [_] Unrestricted Global Note (CUSIP ________); or
(b) [_] a Restricted Certificated Note; or
(c) [_] an Unrestricted Certificated Note,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Anthony Crane Rental, L.P.
Anthony Crane Capital Corporation
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
[Registrar address block]
Re: 10 3/8% Senior Notes due 2008
-----------------------------
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of July 22, 1998
(the "Indenture"), among Anthony Crane Rental, L.P. and Anthony Crane Capital
---------
Corporation, as issuers (the "Issuers"), and State Street Bank and Trust
-------
Company, 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 CERTIFICATED NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED CERTIFICATED 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 CERTIFICATED NOTE. In connection with
- --------------------------------------------------------
the Exchange of the Owner's beneficial interest in a Restricted Global Note for
an Unrestricted Certificated Note, the Owner hereby certifies (i) the
Certificated 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 Certificated Note is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
C-1
<PAGE>
(c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED NOTE TO
---------------------------------------------------------
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
- --------------------------------------------------
Owner's Exchange of a Restricted Certificated 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 Certificated 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 CERTIFICATED NOTE TO
---------------------------------------------------------
UNRESTRICTED CERTIFICATED NOTE. In connection with the Owner's Exchange of a
- ------------------------------
Restricted Certificated Note for an Unrestricted Certificated Note, the Owner
hereby certifies (i) the Unrestricted Certificated 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
Certificated 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 Certificated Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
2. EXCHANGE OF RESTRICTED CERTIFICATED NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED CERTIFICATED NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
--------------------------------------------------
RESTRICTED GLOBAL NOTE TO RESTRICTED CERTIFICATED NOTE. In connection with the
- ------------------------------------------------------
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Certificated Note with an equal principal amount, the Owner hereby
certifies that the Restricted Certificated 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
Certificated Note issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Certificated Note and in the Indenture and the Securities Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED NOTE TO
---------------------------------------------------------
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
- -----------------------------------------------
Exchange of the Owner's Restricted Certificated Note for a beneficial interest
in the [CHECK ONE] "Rule 144A Global Note, "Regulation S Global Note, "IAI
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.
C-2
<PAGE>
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: ________________, ____
C-3
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Anthony Crane Rental, L.P.
Anthony Crane Capital Corporation
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
[Registrar address block]
Re: __% Senior Notes due 2008
-------------------------
Reference is hereby made to the Indenture, dated as of July __, 1998
(the "Indenture"), among Anthony Crane Rental, L.P. and Anthony Crane Capital
---------
Corporation, as issuers (the "Issuers"), and State Street Bank and Trust
-------
Company, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Certificated Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
--------------
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which
we are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (c) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and , if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $250,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the
D-1
<PAGE>
Securities Act, and we further agree to provide to any
person purchasing the Certificated Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
__________________________________________
[Insert Name of Accredited Investor]
By:_______________________________
Name:
Title:
Dated: __________________, ____
D-2
<PAGE>
EXHIBIT E
FORM OF NOTATION OF SUBSIDIARY GUARANTEE
For value received, each Subsidiary 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 July 22, 1998 (the "Indenture")
among Anthony Crane Rental, L.P. and Anthony Crane Capital Corporation, the
Subsidiary Guarantors listed on Schedule I thereto and State Street Bank and
Trust Company, 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 Subsidiary Guarantors to the
Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth in Article 10 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.
[Name of Subsidiary Guarantor(s)]
By:________________________________
Name:
Title:
E-1
<PAGE>
EXHIBIT F
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 Anthony Crane Rental, L.P. (or its permitted successor), a
Pennsylvania limited partnership (the "Company"), the other Subsidiary
Guarantors (as defined in the Indenture referred to herein) and State Street
Bank and Trust Company, 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 July 22, 1998 providing for
the issuance of an aggregate principal amount of up to $255.0 million of
10 3/8% Senior 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 Subsidiary 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
F-1
<PAGE>
(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
Subsidiary 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 Subsidiary Guarantors, or
any Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or the Subsidiary
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 Subsidiary 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
Subsidiary Guarantors for the purpose of this Subsidiary
Guarantee.
F-2
<PAGE>
(h) The Subsidiary Guarantors shall have the right to seek
contribution from any non-paying Subsidiary Guarantor so long as
the exercise of such right does not impair the rights of the
Holders under the Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after giving effect
to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance laws, and after giving effect to any
collections from, rights to receive contribution from or payments
made by or on behalf of any other Subsidiary Guarantor in respect
of the obligations of such other Subsidiary Guarantor under
Article 10 of the Indenture shall result in the obligations of
such Subsidiary Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance.
3 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.
4. 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 Subsidiary Guarantor is the surviving
Person) another corporation, Person or entity whether or not
affiliated with such Subsidiary Guarantor unless:
(i) subject to Section 10.05 of the Indenture, the Person formed by
or surviving any such consolidation or merger (if other than a
Subsidiary Guarantor or the Company) unconditionally assumes all
the obligations of such Subsidiary 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 Subsidiary
Guarantor, such successor corporation shall succeed to and be
substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as a Subsidiary 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.
F-3
<PAGE>
(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 Subsidiary
Guarantor with or into the Company or another Subsidiary Guarantor, or shall
prevent any sale or conveyance of the property of a Subsidiary Guarantor as an
entirety or substantially as an entirety to the Company or another Subsidiary
Guarantor.
5. Releases.
(a) In the event of a sale or other disposition of all of the assets of
any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all to the capital stock
of any Subsidiary Guarantor, then such Subsidiary 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 Subsidiary
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 Subsidiary 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 Subsidiary Guarantor from its obligations under its
Subsidiary Guarantee.
(b) Any Subsidiary 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 Subsidiary Guarantor under the Indenture as provided in Article
10 of the Indenture.
6. No Recourse Against Others. No past, present or future partner,
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 Commission that such a waiver is
against public policy.
7. 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.
8. 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.
F-4
<PAGE>
9. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10 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.
F-5
<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:
Anthony Crane Rental, L.P.
By: _________________________________
Name:
Title:
Anthony Crane Capital Corporation
By: _________________________________
Name:
Title:
ANTHONY CRANE SALES AND LEASING, L.P.
By: ______________________________
Name:
Title
ANTHONY CRANE INTERNATIONAL, L.P.
By: ______________________________
Name:
Title
STATE STREET BANK AND TRUST COMPANY
as Trustee
By: ______________________________
Name:
Title:
F-2
<PAGE>
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Subsidiary Guarantor under the
Indenture as of July 22, 1998:
Anthony Crane Sales and Leasing, L.P.
Anthony Crane International, L.P.
<PAGE>
EXHIBIT 10.11
<PAGE>
ANTHONY CRANE RENTAL L.P.
ANTHONY CRANE CAPITAL CORPORATION
THE SUBSIDIARY GUARANTORS NAMED ON SCHEDULE A
$155,000,000
10 3/8% Senior Notes due 2008
Purchase Agreement
July 15, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
<PAGE>
$155,000,0000
10 3/8% Senior Notes due 2008
of
Anthony Crane Rental, L.P.
and
Anthony Crane Capital Corporation
PURCHASE AGREEMENT
July 15, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
c/o Donaldson, Lukfin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Ladies and Gentlemen:
Anthony Crane Rental L.P., a Pennsylvania limited partnership (the
"COMPANY") and Anthony Crane Capital Corporation a Delaware corporation ("AC
- -------- --
CAPITAL CORP." and, together with the COMPANY, the "ISSUERS"), propose to issue
- ------------ ------- -------
and sell to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and
Goldman, Sachs & Co. ("GOLDMAN SACHS" and, together with DLJ, the "INITIAL
------------- -------
PURCHASERS") an aggregate of $155,000,000 in principal amount of their 10/3//8%
- ----------
Senior Notes due 2008 (the "SERIES A NOTES"), subject to the terms and
--------------
conditions set forth herein. The Series A Notes are to be issued pursuant to
the provisions of an indenture (the "INDENTURE"), to be dated as of the Closing
---------
Date (as defined below), among the Issuers, the Subsidiary Guarantors (as
defined below) and State Street Bank and Trust Company, as trustee (the
"TRUSTEE"). The Series A Notes and the Series B Notes (as defined below)
-------
issuable in exchange therefor are collectively referred to herein as the
"NOTES." The Notes will be guaranteed (the "SUBSIDIARY GUARANTEES") by each of
----- ---------------------
the entities listed on Schedule A, hereto (each, a "SUBSIDIARY GUARANTOR" and
--------------------
collectively the "SUBSIDIARY GUARANTORS"). Capitalized terms used but not
---------------------
defined herein shall have the meanings given to such terms in the Indenture.
1. OFFERING MEMORANDUM. The Series A Notes will be offered and sold
-------------------
to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Issuers and the Subsidiary Guarantors have prepared a preliminary
---
offering memorandum, dated June 29, 1998 (the "PRELIMINARY OFFERING MEMORANDUM")
-------------------------------
and a final offering memorandum, dated July 15, 1998 (the "OFFERING
--------
MEMORANDUM"), relating to the Series A Notes and the Subsidiary Guarantees.
- ----------
<PAGE>
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE ACT)(a "QIB"), (B) IT HAS ACQUIRED THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE ACT OR (iii) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
ACT (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT
OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR
(G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
2
<PAGE>
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
-------------------------------
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Issuers agree to issue
and sell to the Initial Purchasers, and each Initial Purchaser agrees, severally
and not jointly, to purchase from the Issuers, the principal amount of Series A
Notes set forth opposite the name of such Initial Purchaser on Schedule B hereto
at a purchase price equal to 97% of the principal amount thereof (the "PURCHASE
--------
PRICE").
- -----
3. TERMS OF OFFERING. The Initial Purchasers have advised the
-----------------
Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALES") of
--------------
the Series A Notes purchased hereunder on the terms set forth in the Offering
Memorandum, as amended or supplemented, solely to (i) persons whom the Initial
Purchasers reasonably believe to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBS"), and (ii) persons permitted to purchase the
----
Series A Notes in offshore transactions in reliance upon Regulation S under the
Act (each, a "REGULATION S PURCHASER") (such persons specified in clauses (i)
----------------------
and (ii) being referred to herein as the "ELIGIBLE PURCHASERS"). The Initial
-------------------
Purchasers will offer the Series A Notes to Eligible Purchasers initially at a
price equal to 100% of the principal amount thereof. Such price may be changed
at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
-----------------------------
the form of Exhibit A hereto, for so long as such Series A Notes constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights
- -------------------------------
Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the
Subsidiary Guarantors will agree to file with the Securities and Exchange
Commission (the "COMMISSION") under the circumstances set forth therein, (i) a
----------
registration statement under the Act (the "EXCHANGE OFFER REGISTRATION
---------------------------
STATEMENT") relating to the Issuers' new series of 10 3/8 %nior Notes due
- ---------
2008 (the "SERIES B NOTES"), to be offered in exchange for the Series A Notes
--------------
(such offer to exchange being referred to as the "EXCHANGE OFFER") and the
--------------
Subsidiary Guarantees thereof and (ii) a shelf registration statement pursuant
to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with
----------------------------
the Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS")
-----------------------
relating to the resale by certain holders of the Series A Notes and to use its
best efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes, the Subsidiary Guarantees and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS."
-------------------
4. DELIVERY AND PAYMENT.
--------------------
(a) Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at the offices of Latham & Watkins, New York, New York or
such other location as may be mutually acceptable. Such delivery and payment
shall be made at 9:00 a.m. New York City time, on July 22, 1998 or at such other
time on the same date or such other date as shall be agreed upon by the Initial
Purchasers and the Issuers in writing. The time and date of such delivery and
the payment for the Series A Notes are herein called the "CLOSING DATE."
------------
(b) One or more of the Series A Notes in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate
---
principal amount of the Series A Notes (collectively, the "GLOBAL NOTE"), shall
-----------
be delivered by the Issuers to the Initial Purchasers (or as the Initial
Purchasers direct) in each case with any transfer taxes thereon duly paid by the
Issuers against payment by the Initial Purchasers of the Purchase Price thereof
by wire transfer in same day funds to the order of the Issuers.
3
<PAGE>
The Global Note shall be made available to the Initial Purchasers for inspection
not later than 9:30 a.m., New York City time, on the business day immediately
preceding the Closing Date.
5. AGREEMENTS OF THE ISSUERS AND THE SUBSIDIARY GUARANTORS. Each of
--------------------------------------------------------
the Issuers and the Subsidiary Guarantors hereby agrees with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested
by the Initial Purchasers, confirm such advice in writing, (i) of the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Series A Notes for offering
or sale in any jurisdiction designated by the Initial Purchasers pursuant to
Section 5(e) hereof, or the initiation of any proceeding by any state securities
commission or any other federal or state regulatory authority for such purpose
and (ii) of the happening of any event during the period referred to in Section
5(c) below that makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires any
additions to or changes in the Preliminary Offering Memorandum or the Offering
Memorandum in order to make the statements therein not misleading. The Issuers
and the Subsidiary Guarantors shall use their best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any Series A Notes under any state securities or Blue Sky laws and, if at any
time any state securities commission or other federal or state regulatory
authority shall issue an order suspending the qualification or exemption of any
Series A Notes under any state securities or Blue Sky laws, the Issuers and the
Subsidiary Guarantors shall use their best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Issuers as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchasers'
compliance with its representations and warranties and agreements set forth in
Section 7 hereof, the Issuers consent to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchasers and the Issuers an Offering Memorandum is required by law to
be delivered in connection with Exempt Resales by the Initial Purchasers, (i)
not to make any amendment or supplement to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which the
Initial Purchasers shall reasonably object after being so advised and (ii) to
prepare promptly upon the Initial Purchasers' reasonable request, any amendment
or supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales.
(d) If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchasers and the Issuers, it becomes necessary to
amend or supplement the Offering Memorandum in order to make the statements
therein, in the light of the circumstances when such Offering Memorandum is
delivered to an Eligible Purchaser, not misleading, or if, in the opinion of
counsel to the Initial Purchasers and the Issuers, it is necessary to amend or
supplement the Offering Memorandum to comply with any applicable law, forthwith
to prepare an appropriate amendment or supplement to such Offering Memorandum so
that the statements therein, as so amended or supplemented, will not, in the
light of the circumstances when it is so delivered, be misleading, or so that
such Offering Memorandum will comply with applicable law,
4
<PAGE>
and to furnish to the Initial Purchasers and such other persons as the Initial
Purchasers may designate such number of copies thereof as the Initial Purchasers
may reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Series A Notes for offer and sale to the Initial Purchasers
and pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that neither Issuer nor any Subsidiary Guarantor shall be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to matters and
transactions relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction in which it is not now so
subject.
(f) So long as any of the Series A Notes remain outstanding and
during any period in which the Issuers and the Subsidiary Guarantors are not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), to make available to any holder of Series A Notes
------------
in connection with any sale thereof and any prospective purchaser of such Series
A Notes from such holder, the information ("RULE 144A INFORMATION") required by
---------------------
Rule 144A(d)(4) under the Act.
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of the Issuers
and the Subsidiary Guarantors under this Agreement, including: (i) the fees,
disbursements and expenses of counsel to the Issuers and the Subsidiary
Guarantors and accountants of the Issuers and the Subsidiary Guarantors in
connection with the sale and delivery of the Series A Notes to the Initial
Purchasers and pursuant to Exempt Resales, and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Preliminary Offering Memorandum, the Offering Memorandum and all amendments and
supplements to any of the foregoing (including financial statements), including
the mailing and delivering of copies thereof to the Initial Purchasers and
persons designated by it in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Series A Notes to the
Initial Purchasers and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon, (iii) all costs of printing or producing this
Agreement, the other Operative Documents and any other agreements or documents
in connection with the offering, purchase, sale or delivery of the Series A
Notes, (iv) all expenses in connection with the registration or qualification of
the Series A Notes and the Subsidiary Guarantees for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any preliminary and supplemental Blue Sky memoranda in connection
therewith (including the filing fees and fees and disbursements of counsel for
the Initial Purchasers in connection with such registration or qualification and
memoranda relating thereto), (v) the cost of printing certificates representing
the Series A Notes and the Subsidiary Guarantees, (vi) all expenses and listing
fees in connection with the application for quotation of the Series A Notes in
the National Association of Securities Dealers, Inc. ("NASD") Automated
----
Quotation System - PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee
------
and the Trustee's counsel in connection with the Indenture, the Notes and the
Subsidiary Guarantees, (viii) the costs and charges of any transfer agent,
registrar and/or depository (including DTC), (ix) any fees charged by rating
agencies for the rating of the Notes, (x) all costs and expenses of the Exchange
Offer and any Registration Statement, as set forth in the Registration Rights
Agreement, and (xi) and all other costs and expenses incident to the
5
<PAGE>
performance of the obligations of the Issuers and the Subsidiary Guarantors
hereunder for which provision is not otherwise made in this Section.
(h) To use its best efforts to effect the inclusion of the Series
A Notes in PORTAL and to maintain the listing of the Series A Notes on PORTAL
for so long as the Series A Notes are outstanding.
(i) To obtain the approval of DTC for "book-entry" transfer of
the Notes, and to comply with all of its agreements set forth in the
representation letters of the Issuers and the Subsidiary Guarantors to DTC
relating to the approval of the Notes by DTC for "book-entry" transfer.
(j) During the period beginning on the date hereof and continuing
to and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the either Issuer or any
Subsidiary Guarantor or any warrants, rights or options to purchase or otherwise
acquire debt securities of either Issuer or any Subsidiary Guarantor
substantially similar to the Notes and the Subsidiary Guarantees (other than (i)
the Notes and the Subsidiary Guarantees, (ii) any guarantee of either Issuer or
any Subsidiary Guarantor of any indebtedness of Anthony Crane Rental Holdings,
L.P. or Anthony Crane Rental Holdings Capital Corporation, and (iii) commercial
paper issued in the ordinary course of business), without the prior written
consent of the Initial Purchasers.
(k) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Series A Notes to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Series A Notes under the Act.
(l) Not to voluntarily claim, and to actively resist any attempts
to claim, the benefit of any usury laws against the holders of any Notes and the
related Subsidiary Guarantees.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(n) To use its best efforts to do and perform all things required
or necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes and the Subsidiary Guarantees.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ISSUERS AND THE
-----------------------------------------------------------------
SUBSIDIARY GUARANTORS. As of the date hereof, each of the Issuers and the
- ----------------------
Subsidiary Guarantors represents and warrants to, and agrees with, the Initial
Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any 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, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchasers furnished to the Issuers in
writing by the Initial Purchasers expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
6
<PAGE>
(b) Each of the Company and its subsidiaries organized as a
limited partnership has been duly formed, is validly subsisting as a limited
partnership in good standing under the laws of its jurisdiction of formation and
has the partnership power and authority to carry on its business as described in
the Preliminary Offering Memorandum and the Offering Memorandum and to own,
lease and operate its properties and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (a "MATERIAL ADVERSE EFFECT"). Each of the Company's subsidiaries
-----------------------
organized as a corporation has been duly formed, is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to carry on its business as described
in the Preliminary Offering Memorandum and the Offering Memorandum and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a Material Adverse Effect.
(c) The holders of partnership units of the Issuer organized as a
limited partnership have been properly admitted as partners of such Issuer
pursuant to the terms and conditions of the Amended and Restated Partnership
Agreement of the Company, and there are no statutory or contractual preemptive
or similar rights with respect to the issuance of such partnership units. All
outstanding shares of capital stock of the Issuer organized as a corporation
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights.
(d) The entities listed on Schedule C hereto are the only
subsidiaries, direct or indirect, of the Company. The holders of the
partnership units of the Company's subsidiaries organized as limited
partnerships have been properly admitted as partners of such subsidiary pursuant
to the terms and conditions of the partnership agreement of such subsidiary, and
there are no statutory or contractual preemptive or similar rights with respect
to the issuance of such partnership interests, and such interest consisting of
limited partnership units are owned by the Company, directly or indirectly
through one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature (each, a "LIEN").
----
All of the outstanding shares of capital stock of each of the Company's
subsidiaries organized as a corporation have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the Company,
directly or indirectly through one or more subsidiaries, free and clear of any
Lien.
(e) This Agreement has been duly authorized, executed and
delivered by the Issuers and each of the Subsidiary Guarantors.
(f) The Indenture has been duly authorized by the Issuers and
each of the Subsidiary Guarantors and, on the Closing Date, will have been
validly executed and delivered by the Issuers and each of the Subsidiary
Guarantors. When the Indenture has been duly executed and delivered by the
Issuers and each of the Subsidiary Guarantors, the Indenture will be a valid and
binding agreement of the Issuers and each Subsidiary Guarantor, enforceable
against the Issuers and each Subsidiary Guarantor in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Indenture will conform in all material respects to the requirements of the Trust
7
<PAGE>
Indenture Act of 1939, as amended (the "TIA" or "TRUST INDENTURE ACT"), and the
-------------------
rules and regulations of the Commission applicable to an indenture which is
qualified thereunder.
(g) The Series A Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Issuers. When
the Series A Notes have been issued, executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, the Series A
Notes will be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Issuers, enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the Series A
Notes will conform as to legal matters to the description thereof contained in
the Offering Memorandum.
(h) On the Closing Date, the Series B Notes will have been duly
authorized by the Issuers. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Issuers, enforceable
against the Issuers in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Subsidiary Guarantee to be endorsed on the Series A Notes
by each Subsidiary Guarantor has been duly authorized by such Subsidiary
Guarantor and, on the Closing Date, will have been duly executed and delivered
by each such Subsidiary Guarantor. When the Series A Notes have been issued,
executed and authenticated in accordance with the Indenture and delivered to and
paid for by the Initial Purchasers in accordance with the terms of this
Agreement, the Subsidiary Guarantee of each Subsidiary Guarantor endorsed
thereon will be entitled to the benefits of the Indenture and will be the valid
and binding obligation of such Subsidiary Guarantor, enforceable against such
Subsidiary Guarantor in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Subsidiary Guarantees to be
endorsed on the Series A Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum.
(j) The Subsidiary Guarantee to be endorsed on the Series B Notes
by each Subsidiary Guarantor has been duly authorized by such Subsidiary
Guarantor and, when issued, will have been duly executed and delivered by each
such Subsidiary Guarantor. When the Series B Notes have been issued, executed
and authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Subsidiary Guarantee of each Subsidiary Guarantor endorsed
thereon will be entitled to the benefits of the Indenture and will be the valid
and binding obligation of such Subsidiary Guarantor, enforceable against such
Subsidiary Guarantor in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. When the Series B Notes are issued, authenticated and
delivered, the Subsidiary Guarantees to be endorsed on the Series B Notes will
conform as to legal matters to the description thereof in the Offering
Memorandum.
(k) The Registration Rights Agreement has been duly authorized by
the
8
<PAGE>
Issuers and each of the Subsidiary Guarantors and, on the Closing Date, will
have been duly executed and delivered by the Issuers and each of the Subsidiary
Guarantors. When the Registration Rights Agreement has been duly executed and
delivered, the Registration Rights Agreement will be a valid and binding
agreement of the Issuers and each of the Subsidiary Guarantors, enforceable
against the Issuers and each Subsidiary Guarantor in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(l) Neither the Company nor any of its subsidiaries is in (i)
violation of its respective charter or by-laws or (ii) default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, except for defaults that
would not have a Material Adverse Effect.
(m) The execution, delivery and performance of this Agreement and
the other Operative Documents by the Issuers and each of the Subsidiary
Guarantors, compliance by the Issuers and each of the Subsidiary Guarantors with
all provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its subsidiaries, (ii) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states), (iii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iv) violate or conflict
with any applicable law or any rule, regulation, judgment, order or decree of
any court or any governmental body or agency having jurisdiction over the
Company, any of its subsidiaries or their respective property, (v) result in the
imposition or creation of (or the obligation to create or impose) a Lien under,
any agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or their respective
property is bound, or (vi) result in the termination, suspension or revocation
of any Authorization (as defined below) of the Company or any of its
subsidiaries or result in any other impairment of the rights of the holder of
any such Authorization, except in the case of clauses (ii) through (vi) such as
would not have a Material Adverse Effect.
(n) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective property
is or could be subject, which might result, singly or in the aggregate, in a
Material Adverse Effect.
(o) Neither the Company nor any of its subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
------------------
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
-----
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a
9
<PAGE>
Material Adverse Effect.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(q) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
-------------
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(r) The accountants, PricewaterhouseCoopers, L.L.P., that have
certified the financial statements and supporting schedules included in the
Preliminary Offering Memorandum and the Offering Memorandum are independent
public accountants with respect to the Issuers and the Subsidiary Guarantors, as
required by the Act and the Exchange Act. The historical financial statements,
together with related schedules and notes, set forth in the Preliminary Offering
Memorandum and the Offering Memorandum comply as to form in all material
respects with the requirements applicable to registration statements on Form S-1
under the Act.
(s) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Offering Memorandum at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Offering Memorandum (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(t) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum have been prepared
on a basis consistent with the historical financial statements of the Company
and its subsidiaries and give effect to assumptions used in the preparation
thereof on a reasonable basis and in good faith and present fairly the
historical and proposed
10
<PAGE>
transactions contemplated by the Preliminary Offering Memorandum and the
Offering Memorandum; and such pro forma financial statements comply as to form
in all material respects with the requirements applicable to pro forma financial
statements included in registration statements on Form S-1 under the Act. The
other pro forma financial and statistical information and data included in the
Offering Memorandum are, in all material respects, accurately presented and
prepared on a basis consistent with the pro forma financial statements.
(u) Neither Issuer is nor, after giving effect to the offering
and sale of the Series A Notes and the application of the net proceeds thereof
as described in the Offering Memorandum, will be, an "investment company," as
such term is defined in the Investment Company Act of 1940, as amended.
(v) Except as set forth in the Offering Memorandum, there are no
contracts, agreements or understandings between the either Issuer or any
Subsidiary Guarantor and any person granting such person the right to require
such Issuer or such Subsidiary Guarantor to file a registration statement under
the Act with respect to any securities of such Issuer or such Subsidiary
Guarantor or to require such Issuer or such Subsidiary Guarantor to include such
securities with the Notes and Subsidiary Guarantees registered pursuant to any
Registration Statement.
(w) Neither the Company nor any of its subsidiaries nor any agent
thereof acting on the behalf of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Series A
Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System.
(x) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Issuers or any Subsidiary Guarantor that it is
considering imposing) any condition (financial or otherwise) on the Issuers' or
any Subsidiary Guarantor's retaining any rating assigned to the Issuers or any
Subsidiary Guarantor, any securities of the Issuers or any Subsidiary Guarantor
or (ii) has indicated to the Issuers or any Subsidiary Guarantor that it is
considering (a) the downgrading, suspension, or withdrawal of, or any review for
a possible change that does not indicate the direction of the possible change
in, any rating so assigned or (b) any change in the outlook for any rating of
the Issuers, any Subsidiary Guarantor or any securities of the Issuers or any
Subsidiary Guarantor.
(y) Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there has
not been any material adverse change or any development involving a prospective
material adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries, except as disclosed or otherwise
contemplated in the Offering Memorandum, and (iii) neither the Company nor any
of its subsidiaries has incurred any material liability or obligation, direct or
contingent.
(z) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act.
11
<PAGE>
(aa) When the Series A Notes and the Subsidiary Guarantees are
issued and delivered pursuant to this Agreement, neither the Series A Notes nor
the Subsidiary Guarantees will be of the same class (within the meaning of Rule
144A under the Act) as any security of the Issuers or the Subsidiary Guarantors
that is listed on a national securities exchange registered under Section 6 of
the Exchange Act or that is quoted in a United States automated inter-dealer
quotation system.
(bb) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Issuers, the Subsidiary
Guarantors or any of their respective representatives (other than the Initial
Purchasers, as to whom the Issuers and the Subsidiary Guarantors make no
representation) in connection with the offer and sale of the Series A Notes
contemplated hereby, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Series A Notes have been issued and sold by
the Issuers within the six-month period immediately prior to the date hereof.
(cc) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.
(dd) Neither of the Issuers, the Subsidiary Guarantors nor any of
their respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Issuers and the Subsidiary
Guarantors make no representation) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S under the Act ("REGULATION
----------
S") with respect to the Series A Notes or the Subsidiary Guarantees.
- -
(ee) The Series A Notes offered and sold in reliance on
Regulation S have been and will be offered and sold only in offshore
transactions.
(ff) The sale of the Series A Notes pursuant to Regulation S is
not part of a plan or scheme to evade the registration provisions of the Act.
(gg) The Issuers, the Subsidiary Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchasers, as to whom the Issuers and the Subsidiary Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering of the
Series A Notes outside the United States and, in connection therewith, the
Offering Memorandum will contain the disclosure required by Rule 902(g)(2).
(hh) The Series A Notes sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the 40-day
distribution compliance period referred to in Rule 903(c)(3) of the Act and only
upon certification of beneficial ownership of such Series A Notes by non-U.S.
persons or U.S. persons who purchased such Series A Notes in transactions that
were exempt from the registration requirements of the Act.
(ii) No registration under the Act of the Series A Notes or the
Subsidiary Guarantees is required for the sale of the Series A Notes and the
Subsidiary Guarantees to the Initial Purchasers as contemplated hereby or for
the Exempt Resales assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof.
12
<PAGE>
(jj) Each certificate signed by any officer of the Issuers or any
Subsidiary Guarantor and delivered to the Initial Purchasers or counsel for the
Initial Purchasers shall be deemed to be a representation and warranty by the
Issuers or such Subsidiary Guarantor to the Initial Purchasers as to the matters
covered thereby.
(kk) On the Closing Date, the Company and its subsidiaries will
have good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case, except as set forth
on the applicable schedules to the Senior Credit Facilities, free and clear of
all Liens and defects, except such as are described in the Offering Memorandum
or such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries, in each case except as described
in the Offering Memorandum.
(ll) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the Company or
any of its subsidiaries before the National Labor Relations Board or any state
or local labor relations board, (ii) strike, labor dispute, slowdown or stoppage
pending or threatened against the Company or any of its subsidiaries or (iii)
union representation question existing with respect to the employees of the
Company or any of its subsidiaries, except in the case of clauses (i), (ii) and
(iii) for such actions which, singly or in the aggregate, would not have a
Material Adverse Effect. To the best knowledge of the Issuers, no collective
bargaining organizing activities are taking place with respect to the Company or
any of its subsidiaries, except as disclosed in the Offering Memorandum.
(mm) The Company and each of its subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(nn) The indebtedness represented by the Series A Notes is being
incurred for proper purposes and in good faith and each of the Issuers and the
Subsidiary Guarantors will be on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Series A Notes) solvent,
and will have on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Series A Notes) sufficient capital for
carrying on their respective business and will be on the Closing Date (after
giving effect to the application of the proceeds from the issuance of the Series
A Notes) able to pay their respective debts as they mature.
The Issuers acknowledge that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 9 hereof, counsel to the Issuers and the Subsidiary Guarantors and
counsel to the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.
13
<PAGE>
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of the
--------------------------------------------------
Initial Purchasers, severally and not jointly, represents and warrants to the
Issuers and the Subsidiary Guarantors, and agrees that:
(a) Such Initial Purchaser is either a QIB or an "accreted
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Act (an
"ACCREDITED INSTITUTION"), in either case, with such knowledge and experience
----------------------
in financial and business matters as is necessary in order to evaluate the
merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Series A Notes only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and (y) in offshore
transactions in reliance upon Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell
the Series A Notes only to, and will solicit offers to buy the Series A Notes
only from (A) Eligible Purchasers that the Initial Purchaser reasonably believes
are QIBs, and (B) Regulation S Purchasers, in each case, that agree that (x) the
Series A Notes purchased by them may be resold, pledged or otherwise transferred
within the time period referred to under Rule 144(k) (taking into account the
provisions of Rule 144(d) under the Act, if applicable) under the Act, as in
effect on the date of the transfer of such Series A Notes, only (I) to the
Issuers or any of their subsidiaries, (II) to a person whom the seller
reasonably believes is a QIB purchasing for its own account or for the account
of a QIB in a transaction meeting the requirements of Rule 144A under the Act,
(III) in an offshore transaction (as defined in Rule 902 under the Act) meeting
the requirements of Rule 904 of the Act, (IV) in a transaction meeting the
requirements of Rule 144 under the Act, (V) to an Accredited Institution that,
prior to such transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the registration of transfer of such
Series A Note (the form of which is substantially the same as Annex A to the
-------
Offering Memorandum) and, if such transfer is in respect of an aggregate
principal amount of Series A Notes less than $250,000, an opinion of counsel
acceptable to the Issuers that such transfer is in compliance with the Act, (VI)
in accordance with another exemption from the registration requirements of the
Act (and based upon an opinion of counsel acceptable to the Issuers) or (VII)
pursuant to an effective registration statement and, in each case, in accordance
with the applicable securities laws of any state of the United States or any
other applicable jurisdiction and (y) they will deliver to each person to whom
such Series A Notes or an interest therein is transferred a notice substantially
to the effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any person
acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of
14
<PAGE>
Regulation S with respect to the Series A Notes or the Subsidiary Guarantees.
(f) The Series A Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S have been and will be offered and
sold only in offshore transactions.
(g) The sale of the Series A Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that it has not offered or sold
and will not offer or sell the Series A Notes in the United States or to, or for
the benefit or account of, a U.S. Person (other than a distributor), in each
case, as defined in Rule 902 under the Act (i) as part of its distribution at
any time and (ii) otherwise until 40 days after the later of the commencement of
the offering of the Series A Notes pursuant hereto and the Closing Date, other
than in accordance with Regulation S of the Act or another exemption from the
registration requirements of the Act. Such Initial Purchaser agrees that, during
such 40-day distribution compliance period, it will not cause any advertisement
with respect to the Series A Notes (including any "tombstone" advertisement) to
be published in any newspaper or periodical or posted in any public place and
will not issue any circular relating to the Series A Notes, except such
advertisements as permitted by and include the statements required by Regulation
S.
(i) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes by it to any distributor, dealer or
person receiving a selling concession, fee or other remuneration during the 40-
day distribution compliance period referred to in Rule 903(c)(3) under the Act,
it will send to such distributor, dealer or person receiving a selling
concession, fee or other remuneration a confirmation or notice to substantially
the following effect:
"The Series A Notes covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and may not be offered and sold
within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of your distribution at
any time or (ii) otherwise until 40 days after the later of
the commencement of the Offering and the Closing Date,
except in either case in accordance with Regulation S under
the Securities Act (or Rule 144A or to Accredited
Institutions in transactions that are exempt from the
registration requirements of the Securities Act), and in
connection with any subsequent sale by you of the Series A
Notes covered hereby in reliance on Regulation S during the
period referred to above to any distributor, dealer or
person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the
foregoing effect. Terms used above have the meanings
assigned to them in Regulation S."
(j) Such Initial Purchaser agrees that the Series A Notes offered
and sold in reliance on Regulation S will be represented upon issuance by a
global security that may not be exchanged for definitive securities until the
expiration of the 40-day distribution compliance period referred to in Rule
903(c)(3) of the Act and only upon certification of beneficial ownership of such
Series A Notes by non-U.S. persons or U.S. persons who purchased such Series A
Notes in transactions that were exempt from the registration requirements of the
Act.
15
<PAGE>
Such Initial Purchaser acknowledges that the Issuers and the
Subsidiary Guarantors and, for purposes of the opinions to be delivered to each
Initial Purchaser pursuant to Section 9 hereof, counsel to the Issuers and the
Subsidiary Guarantors and counsel to the Initial Purchaser will rely upon the
accuracy and truth of the foregoing representations and such Initial Purchaser
hereby consents to such reliance.
8. INDEMNIFICATION.
---------------
(a) Each Issuer and each Subsidiary Guarantor agree, jointly and
severally, to indemnify and hold harmless the each Initial Purchaser, its
directors, its officers and each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Issuers or any Subsidiary Guarantor to any holder or
prospective purchaser of Series A Notes pursuant to Section 5(f) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to an Initial Purchaser furnished in
writing to the Issuers by such Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Issuers and the Subsidiary Guarantors, and their
respective directors and officers and each person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the
Issuers or the Subsidiary Guarantors, to the same extent as the foregoing
indemnity from the Issuers and the Subsidiary Guarantors to an Initial Purchaser
but only with reference to information relating to such Initial Purchaser
furnished in writing to the Issuers by such Initial Purchaser expressly for use
in the Preliminary Offering Memorandum or the Offering Memorandum.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
- ------------------
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
------------------
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Initial Purchasers shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Initial Purchasers). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying
16
<PAGE>
party shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expeses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case
of the parties indemnified pursuant to Section 8(a), and by the Issuers, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than twenty
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers and the Subsidiary Guarantors, on the one hand, and the Initial
Purchaser on the other hand from the offering of the Series A Notes or (ii) if
the allocation provided by clause 8(d)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(d)(i) above but also the relative fault of the
Issuers and the Subsidiary Guarantors, on the one hand, and such Initial
Purchaser, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuers and the Subsidiary Guarantors, on the one hand and the
Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Series A Notes
(after underwriting discounts and commissions, but before deducting expenses)
received by the Issuers, and the total discounts and commissions received by the
Initial Purchaser bear to the total price to investors of the Series A Notes, in
each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Issuers and the Subsidiary Guarantors, on
the one hand, and the Initial Purchaser, 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 t state a
material fact relates to information supplied by the Issuers or the Subsidiary
Guarantors, on the one hand, or the Initial Purchaser, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Issuers and the Subsidiary Guarantors, and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata
17
<PAGE>
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total discounts and commissions received by such Initial Purchasers
exceeds the amount of any damages which the Initial Purchaser 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 Initial Purchasers' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective principal amount
of Series A Notes purchased by each of the Initial Purchasers hereunder and not
joint.
(e) The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations
---------------------------------------------
of the Initial Purchasers to purchase the Series A Notes under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Issuers and the
Subsidiary Guarantors contained in this Agreement shall be true and correct on
the Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Issuers or any Subsidiary Guarantor or any securities of the
Issuers or any Subsidiary Guarantor (including, without limitation, the placing
of any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Issuers or any Subsidiary Guarantor or any
securities of the Issuers or any Subsidiary Guarantor by any such rating
organization and (iii) no such rating organization shall have given notice that
it has assigned (or is considering assigning) a lower rating to the Notes than
that on which the Notes were marketed.
(c) Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there shall not have
been any change
18
<PAGE>
or any development involving a prospective change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries, except as disclosed or
otherwise contemplated in the Offering Memorandum and (iii) neither the Company
nor any of its subsidiaries shall have incurred any liability or obligation,
direct or contingent, the effect of which, in any such case described in clause
9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is material and adverse and,
in your judgment, makes it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum.
(d) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by the General Manager and the Chief Financial
Officer of the Issuers and each of the Subsidiary Guarantors, confirming the
matters set forth in Sections 6(y), 9(a) and 9(b) and stating that each of the
Issuers and the Subsidiary Guarantors has complied with all the agreements and
satisfied all of the conditions herein contained and required to be complied
with or satisfied on or prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Kirkland & Ellis, New York, New York, and Williams Coulson, Pittsburgh,
Pennsylvania, counsel for the Issuers and the Subsidiary Guarantors,
substantially in the form of Exhibits B-1 and B-2 hereto, respectively.
The opinions of Kirkland & Ellis and Williams Coulson described in
Section 9(e) above shall be rendered to you at the request of the Issuers and
the Subsidiary Guarantors and shall so state therein.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of Latham & Watkins, New York, New York,
counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof or
the Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers from Coopers & Lybrand, L.L.P., independent public
accountants, containing the information and statements of the type ordinarily
included in accountants' "comfort letters" to the Initial Purchasers with
respect to the financial statements and certain financial information contained
in the Offering Memorandum.
(h) The Series A Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
(i) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Issuers, the Subsidiary Guarantors and the Trustee.
(j) The Issuers and the Subsidiary Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Issuers and the Subsidiary
Guarantors.
(k) The Initial Purchasers shall have received on the Closing Date a
solvency opinion, dated the Closing Date, from a mutually agreeable firm, in
form and substance reasonably satisfactory to the Initial Purchasers.
19
<PAGE>
(l) The Initial Purchasers shall have received evidence satisfactory
to the Initial Purchasers that the other Transactions (as defined in the
Offering Memorandum) have been completed.
(m) The Initial Purchasers shall have received fully executed copies
of the Senior Credit Facilities (as defined in the Offering Memorandum).
(n) Neither of the Issuers nor the Subsidiary Guarantors shall have
failed at or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Issuers or the Subsidiary Guarantors, as the case may be, at or prior to the
Closing Date.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement shall
------------------------------------------
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Issuers if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers' judgment, makes it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Issuers or any Subsidiary
Guarantor on any exchange or in the over-the-counter market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase the Series A Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Series
A Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than one tenth
of the aggregate principal amount of the Series A Notes to be purchased on such
date by all Initial Purchasers, each non defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount of the Series
A Notes set forth opposite its name in Schedule B bears to the aggregate
principal amount of the Series A Notes which all the non defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Series A Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial Purchaser
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one ninth of such principal amount of
the Series A Notes without the written consent of such Initial Purchaser. If on
the Closing Date any Initial Purchaser or Initial Purchasers shall fail or
refuse to purchase the Series A Notes and the aggregate principal amount of the
Series A Notes with respect to which such default occurs is more than one tenth
of the aggregate
20
<PAGE>
principal amount of the Series A Notes to be purchased by all Initial Purchasers
and arrangements satisfactory to the Initial Purchasers and the Issuers for
purchase of such the Series A Notes are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any non
defaulting Initial Purchaser and the Issuers. In any such case which does not
rsult in termination of this Agreement, either you or the Issuers shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Offering Memorandum or any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Initial Purchaser from liability in
respect of any default of any such Initial Purchaser under this Agreement.
11. MISCELLANEOUS. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (i) if to the Issuers or any
Subsidiary Guarantor, 1165 Camp Hollow Road, West Mifflin, Pennsylvania 15122;
412-469-3700 and (ii) if to the Initial Purchasers, Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Issuers, the Subsidiary Guarantors and
the Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Series A Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchasers, the officers or directors of the Initial Purchasers, any person
controlling the Initial Purchasers, the Issuers, any Subsidiary Guarantor, the
officers or directors of the Issuers or any Subsidiary Guarantor, or any person
controlling the Issuers or any Subsidiary Guarantor, (ii) acceptance of the
Series A Notes and payment for them hereunder and (iii) termination of this
Agreement.
If for any reason the Series A Notes are not delivered by or on behalf
of the Issuers as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Issuers and each Subsidiary
Guarantor, jointly and severally, agree to reimburse the Initial Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by them. Notwithstanding any termination of this Agreement, the Issuers
shall be liable for all expenses which it has agreed to pay pursuant to Section
5(i) hereof. The Issuers and each Subsidiary Guarantor also agree, jointly and
severally, to reimburse the Initial Purchasers and their officers, directors and
each person, if any, who controls such Initial Purchasers within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act for any and all fees and
expenses (including without limitation the fees and expenses of counsel)
incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the Subsidiary
Guarantors, the Initial Purchasers, the Initial Purchasers' directors and
officers, any controlling persons referred to herein, the directors of the
Issuers and the Subsidiary Guarantors and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include a purchaser of any of the
Series A Notes from the Initial Purchasers merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
21
<PAGE>
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
* * *
22
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among the
Issuers, the Subsidiary Guarantors and the Initial Purchasers.
Very truly yours,
ISSUERS:
ANTHONY CRANE RENTAL L.P.
By: Anthony Crane Rental, Inc.,
its general partner
By: /s/ David Mahokey
_____________________________
Name: David Mahokey
Title: Chief Financial Officer
ANTHONY CRANE CAPITAL CORPORATION
By: /s/ David Mahokey
_____________________________
Name: David Mahokey
Title: Chief Financial Officer
SUBSIDIARY GUARANTORS:
ANTHONY CRANE INTERNATIONAL, L.P.,
by: Anthony Crane Rental, Inc., its general
partner
By: /s/ David Mahokey
_____________________________
Name: David Mahokey
Title: Chief Financial Officer
ANTHONY CRANE SALES AND LEASING, L.P.,
by: Antohny Crane Rental, Inc., its general
partner
By: /s/ David Mahokey
_____________________________
Name: David Mahokey
Title: Chief Financial Officer
23
<PAGE>
Accepted and Agreed to on behalf of the
Initial Purchases by:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Edward Biggins
---------------------------------
Name: Edward Biggins
Title: Vice President
24
<PAGE>
SCHEDULE A
SUBSIDIARY GUARANTORS
ANTHONY CRANE INTERNATIONAL, L.P.
ANTHONY CRANE SALES AND LEASING, L.P.
S-1
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
Principal Amount
Initial Purchasers of Notes
------------------ --------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation............................. $108,500,000
Goldman, Sachs & Co. .................................. $ 46,500,000
Total.................................................. $155,000,000
============
</TABLE>
S-2
<PAGE>
SCHEDULE C
SUBSIDIARIES
ANTHONY CRANE INTERNATIONAL, L.P.
ANTHONY CRANE SALES AND LEASING L.P.
S-3
<PAGE>
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
<PAGE>
EXHIBIT 10.12
<PAGE>
REGISTRATION RIGHTS AGREEMENT
Dated as of July 22, 1998
by and among
Anthony Crane Rental, L.P.,
Anthony Crane Capital Corporation,
The Guarantors Named on the Signature Pages Hereto,
and
Donaldson, Lufkin & Jenrette Securities Corporation
And
Goldman, Sachs & Co.
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of July __, 1998, by and among Anthony Crane Rental, L.P., a
Pennsylvania limited partnership ("ACR"), Anthony Crane Capital Corporation, a
Delaware Corporation (together with ACR, the "Company"), the guarantors named on
the signature pages hereto (the "Guarantors") and Donaldson, Lufkin & Jenrette
Securities Corporation and Goldman, Sachs & Co. (each an "Initial Purchaser"
and, collectively, the "Initial Purchasers"), each of whom has agreed to
purchase the Company's 10 3/8% Senior Notes due 2008 (the "Notes") pursuant to
the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated July
15, 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 Notes, the Company and the Guarantors have 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 9 of the Purchase Agreement.
Capitalized terms used herein and not otherwise defined are used as
defined the Indenture (as defined herein).
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.
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 (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (ii) 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
minimum period required pursuant to Section 3(b) hereof and (iii) the delivery
by the Company to the Registrar under the Indenture of Exchange Notes in the
same aggregate principal amount as the aggregate principal amount of 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.
Page 1
<PAGE>
Exchange Notes: The Company's 10 3/8% Senior Notes due 2008 to be
issued pursuant to the Indenture : (x) in the Exchange Offer or (y) as
contemplated by Section 4 hereof.
Exchange Offer: The exchange and issuance by the Company of a
principal amount at maturity of Exchange Notes (which shall be registered
pursuant to the Exchange Offer Registration Statement) equal to the outstanding
principal amount at maturity of the Notes that are tendered by such Holders in
connection with such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement
relating to an Exchange Offer, including the related Prospectus.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
Guarantors: The Guarantors defined in the preamble hereto and any
Person which becomes a guarantor of the Notes after the date hereof pursuant to
the terms of the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The indenture, dated the Closing Date, among the Company,
the Guarantors and State Street Bank and Trust Company, as trustee (the
"Trustee"), pursuant to which the Notes are to be issued, as such indenture is
amended or supplemented from time to time in accordance with the terms thereof.
Participating Broker-Dealer: Any Broker-Dealer that holds Exchange
Notes that were acquired in the Exchange Offer in exchange for Notes that such
Broker-Dealer acquired for its own account as a result of market making
activities or other trading activities (other than Notes acquired directly from
the Company or any of its affiliates).
Person: An individual, partnership, limited liability company,
corporation, trust, unincorporated organization, or a government or agency or
political subdivision thereof.
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 and
the Guarantors relating to (a) an offering of any Exchange Notes (including
guarantees thereof by the Guarantors) 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.
Page 2
<PAGE>
Regulation S: Regulation S promulgated under the Act.
Rule 144: Rule 144 promulgated under the Act.
Securities: The Notes and the Exchange Notes (including guarantees
thereof by the Guarantors).
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 (A) Note, until the earliest to
occur of (i) the date on which such Note is exchanged in the Exchange Offer for
an Exchange Note which is entitled to be resold to the public by the Holder
thereof without complying with the prospectus delivery requirements of the
Securities Act, (ii) the date on which such Note has been disposed of in
accordance with a Shelf Registration Statement (and purchasers thereof have been
issued Exchange Notes) or (iii) the date on which such Note is distributed to
the public pursuant to Rule 144 under the Securities Act and each (B) Exchange
Note held by a Broker Dealer until the date on which such Exchange Note is
disposed of by a Broker Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the prospectus contained therein).
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 or policy of the Commission (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 90 days after the Closing Date (such
90th 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 165 days after the Closing Date (such
165th 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 Exchange 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, use
its best efforts to commence and Consummate the Exchange Offer. The Exchange
Offer shall be on the appropriate form permitting registration of the Exchange
Notes to be offered in exchange for the Notes that are Transfer Restricted
Page 3
<PAGE>
Securities and to permit resales of Exchange Notes by Broker-Dealers that
tendered into the Exchange Offer for Notes that such Broker-Dealer acquired for
its own account as a result of market making activities or other trading
activities (other than 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 Exchange 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 and the Guarantors 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 Exchange
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.
To the extent necessary to ensure that the Exchange Offer Registration
Statement is available for sales of Exchange 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 180 days 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.
Page 4
<PAGE>
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
------------------
applicable law or Commission (after the Company and the Guarantors have complied
with the procedures set forth in Section 6(a)(i) below) or (ii) any Holder of
Transfer Restricted Securities shall notify the Company in writing prior to the
20th Business Day 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 Exchange 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 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 30 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 90 days after the
Filing Deadline (such 90th 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 or policy of the
Commission, 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
Page 5
<PAGE>
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 30 Business Days of the Effectiveness Deadline with
respect to the Exchange Offer Registration Statement 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 $.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 $.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 $.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
Securities. 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.
Page 6
<PAGE>
Section 5.1. 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 Exchange Notes by Broker-
Dealers that tendered in the Exchange Offer Notes that such Broker-Dealer
acquired for its own account as a result of its market making activities or
other trading activities (other than 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 and the Guarantors 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 Exchange Notes to be issued in the Exchange Offer and
(C) it is acquiring the Exchange Notes in its ordinary course of business.
As a condition to its participation in the Exchange Offer, each Holder
using the Exchange Offer to participate in a distribution of the Exchange
Notes shall acknowledge and agree that, if the resales are of Exchange
Notes obtained by such Holder in exchange for 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.
Page 7
<PAGE>
(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 any
Guarantor has entered into any arrangement or understanding with any Person
to distribute the Exchange 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
Exchange Notes in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the
Exchange 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 (i) 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, and
(ii) issue, upon the request of any Holder or purchaser of Notes covered by any
Shelf Registration Statement contemplated by this Agreement, Exchange Notes
having an aggregate principal amount equal to the aggregate principal amount of
Notes sold pursuant to the Shelf Registration Statement and surrendered to the
Company for cancellation; the Company shall register Exchange Notes on the Shelf
Registration Statement for this purpose and issue the Exchange Notes to the
purchaser(s) of securities subject to the Shelf Registration Statement in the
names as such purchaser(s) shall designate.
(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.
Page 8
<PAGE>
(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 Purchasers 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),
Page 9
<PAGE>
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;
Page 10
<PAGE>
(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) (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 Sections 6(y), 9(a) and 9(b) 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 Section 9(e)
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 (relying as to materiality to the extent
such counsel deems appropriate upon the statements of officers and
other representatives of the Company and the Guarantors), 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
Page 11
<PAGE>
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 9(g) of the
Purchase Agreement;
(B) set forth in full or incorporated by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) 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).
If at any time the representations and warranties of the Company and
each of the Guarantors set forth in the certificate contemplated in clause
(A)(1) above cease to be true and correct, the Company shall so advise the
Initial Purchasers and the underwriters, if any, and each selling Holder
promptly and, if requested by such Persons, shall confirm such advice in
writing;
(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 Notes covered by any
Shelf Registration Statement contemplated by this Agreement, Exchange Notes
having an aggregate principal amount, surrendered to the Company by such Holder
in exchange therefor or being sold by such Holder; such Exchange Notes to be
registered in the name of such Holder or in the name of the purchasers of such
Exchange Notes, as the case may be; in return, the 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
Page 12
<PAGE>
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 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
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<PAGE>
(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 6. 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
Exchange 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 and the Guarantors; (v) all application and filing
fees in connection with listing the Exchange 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, not to exceed
$25,000, 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. Such
Holders shall be responsible for any and all other out-of-pocket expenses of the
Holders incurred in connection with the registration of the Securities.
SECTION 7. INDEMNIFICATION
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder and (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 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
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<PAGE>
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an
"Indemnified Holder"), from and against any and all losses, claims, damages,
liabilities, judgments, (including without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by 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 Exchange
Notes, or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities or
judgments 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.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company or the Guarantors, to the same extent as the foregoing indemnity
from the Company and the Guarantors 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 (i) 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 the amount
paid by such Indemnified Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Indemnified Holder, its directors, officers
or any Person who controls such Indemnified Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) hereof (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), an Indemnified Holder shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Indemnified Holder). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the
Page 15
<PAGE>
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority of the
Indemnified Holders, in the case of the parties indemnified pursuant to Section
8(a), and by the Company, in the case of parties indemnified pursuant to Section
8(b). The indemnifying party shall indemnify and hold harmless the indemnified
party from and against any and all losses, claims, damages, liabilities and
judgments by reason of any settlement of any action (i) effected with its
written consent or (ii) effected without its written consent if the settlement
is entered into more than twenty business days after the indemnifying party
shall have received a request from the indemnified party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses are
at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, from their sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Guarantors, on the one hand,
and of the Indemnified Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Indemnified 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 or such Guarantor, on the one
hand, or by the Indemnified Holder, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and judgments referred to above shall
be deemed to include, subject to the limitations set forth in the second
paragraph of Section 8(a), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
Page 16
<PAGE>
The Company, the Guarantors and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. 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(c) are several in proportion to the respective principal amount
of Transfer Restricted Securities held by each of the Holders hereunder and not
joint.
SECTION 8. 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 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 9. 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 Guarantor's 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
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<PAGE>
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) Adjustments Affecting the Notes. Neither the Company nor any of the
-------------------------------
Guarantors shall take any action, or permit any change to occur, with respect to
the Notes that would materially and adversely affect the ability of the Holders
to Consummate any Exchange Offer.
(d) 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.
(e) 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.
(f) 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:
Anthony Crane Rental, L.P.
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Telecopier No.: (412) 469-0691
Attention: Dale Buckwalter
With a copy to:
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022
Page 18
<PAGE>
Telecopier No.: (212) 446-4800
Attention: Lance Balk, 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 Donaldson, Lufkin &
Jenrette Securities Corporation, on behalf of the Initial Purchasers (in the
form attached hereto as Exhibit A) and shall be addressed to: Attention:
Corporate Secretary, 277 Park Avenue, New York, New York 10172.
(g) 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.
(h) 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.
(i) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(j) 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.
(k) 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.
(l) 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
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<PAGE>
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.
[Registration Rights Agreement Signature Page(s) Follow]
Page 20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Issuers:
Anthony Crane Rental, L.P.
By: Anthony Crane Rental, Inc.,
its general partner
By: /s/ David Mahokey
_____________________________
Name: David Mahokey
Title: Chief Financial Officer
Anthony Crane Capital Corporation
By: /s/ David Mahokey
_____________________________
Name: David Mahokey
Title: Chief Financial Officer
Guarantors:
Anthony Crane Sales and Leasing, L.P.
By: Anthony Crane Rental Inc.,
its general partner
By: /s/ David Mahokey
_____________________________
Name: David Mahokey
Title: Chief Financial Officer
Anthony crane international, l.p.
By: Anthony Crane Rental Inc.,
its general partner
By: /s/ David Mahokey
_____________________________
Name: David Mahokey
Title: Chief Financial Officer
Registration Rights Agreement Signature Pages S-1
<PAGE>
Initial Purchasers:
Donaldson, Lufkin & Jenrette
Securities Corporation
Goldman, Sachs & Co.
By: /s/ Edward Biggins
________________________________
(Donaldson, Lufkin & Jenrette
Securities Corporation.)
Registration Right Agreement Signature Pages S-2
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attn.:
Fax: ( ) -
From: Anthony Crane Rental, L.P.
Anthony Crane Capital Corporation
1165 Camp Hollow Road
West Mifflin, Pennsylvania 15122
Re: ____% Senior Notes due 2008
Date: _______, 199_
For your information only (NO ACTION REQUIRED):
Today, ______, 199_, we filed [an 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.
<PAGE>
EXHIBIT 10.13
[EXECUTION COPY]
ANTHONY CRANE RENTAL, L.P.
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT (this "Agreement") is made as of July 22, 1998, by and
---------
between Anthony Crane Rental, L.P., a Pennsylvania limited partnership (the
"Company") and Ray G. Anthony ("Executive"). Any capitalized terms used herein
- -------- ---------
and otherwise not defined shall have the meanings assigned to them in Section 11
hereof.
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive
----------
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
as provided in paragraph 5 hereof (the "Employment Period").
-----------------
2. Position and Duties.
-------------------
(a) During the Employment Period, Executive shall serve as Chairman
and Chief Executive Officer of the Company and shall have the normal duties,
responsibilities and authority of a Chairman and Chief Executive Officer,
subject to the overall discretion and authority of the Board.
(b) Executive shall report to the Board, and Executive shall devote
his best efforts and his full business time and attention (except for permitted
vacation periods and reasonable periods of illness or other incapacity) to the
business and affairs of the Company and its Subsidiaries. Executive shall
perform his duties and responsibilities to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner.
3. Base Salary and Benefits.
------------------------
(a) During the Employment Period, Executive shall receive a base
salary of $400,000 per annum or such other higher rate as the Board may
designate from time to time (the "Base Salary"), which shall be payable in
-----------
regular installments in accordance with the Company's general payroll practices
and shall be subject to customary withholding. In addition, during the
Employment Period, Executive shall be entitled to participate in all of the
Company's employee benefit programs for which senior executive employees of the
Company and its Subsidiaries are generally eligible, and Executive shall be
entitled to four weeks of paid vacation each year, which
<PAGE>
if not taken may not be carried forward to any subsequent year. In addition, the
Company will provide Executive with disability insurance which will provide a
minimum benefit of at least 50% of his Base Salary for the period from the
seventh month of his disability until Executive reaches age 65.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(c) In addition to the Base Salary, Executive shall be eligible to
earn an annual bonus of up to $200,000 for meeting or exceeding certain goals
which will be determined jointly by Executive and the Executive Committee of the
Board.
5. Term.
----
(a) The Employment Period shall continue until the earlier to occur
of (i) Executive's resignation, death or permanent disability or incapacity (as
determined by the Board in its good faith judgment), (ii) termination by the
Company at any time for Cause (as defined below) or without Cause or (iii) July
22, 2003.
(b) If the Employment Period is terminated by the Company without
Cause during the term of this Agreement, Executive shall be entitled to receive
his Base Salary until July 22, 2003. Any such amounts payable under this
Section 5(b) will be payable at such times as such amounts would have been
payable had Executive not been terminated. Notwithstanding anything in this
Agreement to the contrary, the Company shall have no obligation to pay any
amounts payable under this Section 5(b) during such times as Executive is in
breach of paragraph 6, 7, or 8 hereof. The amounts otherwise payable pursuant
to this paragraph 5(b) shall be reduced by the amount of any compensation
Executive receives with respect to any other employment during the one year
period commencing on the date of Executive's termination. Upon request from
time to time, Executive shall furnish the Company with a true and complete
certificate specifying any such compensation due to or received by him. As a
condition to the Company's obligations (if any) to make payments pursuant to
this paragraph 5(b), Executive will execute and deliver a general release in
form and substance satisfactory to the Company.
(c) If the Employment Period is terminated pursuant to clause (a)(i)
above, Executive shall be entitled to receive his Base Salary through the date
of termination. Any such amounts payable under this Section 5(c) will be
payable at such times as such amounts would have been payable had Executive not
been terminated.
(d) If the Employment Period is terminated by the Company for Cause,
Executive shall be entitled to receive his Base Salary through the date of
termination. Any such amounts
-2-
<PAGE>
payable under this Section 5(d) will be payable at such times as such amounts
would have been payable had Executive not been terminated.
(e) Except as otherwise provided in paragraph 5(b) above, all of
Executive's rights to fringe benefits and bonuses hereunder (if any) which
accrue or become payable after the termination of the Employment Period shall
cease upon such termination. The Company may offset any amounts Executive owes
it or its Subsidiaries against any amounts it owes Executive hereunder.
6. Confidential Information. Executive acknowledges that the
------------------------
information, observations and data obtained by him while employed by the Company
and its Subsidiaries concerning the business or affairs of the Company, or any
predecessor, or any other Subsidiary ("Confidential Information") are the
------------------------
property of the Company or such Subsidiary. Therefore, Executive agrees that he
shall not disclose to any unauthorized person or use for his own purposes any
Confidential Information without the prior written consent of the Board, unless
and to the extent that the aforementioned matters become generally known to and
available for use by the public other than as a result of Executive's acts or
omissions. Executive shall deliver to the Company at the termination of the
Employment Period, or at any other time the Company may request, all memoranda,
notes, plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined below) or the business of the Company or
any Subsidiary which he may then possess or have under his control.
7. Inventions and Patents. Executive acknowledges that all
----------------------
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which relate to the Company's or any of its Subsidiaries' actual or
anticipated business, research and development or existing or future products or
services and which are conceived, developed or made by Executive while employed
by the Company or its predecessor and its Subsidiaries ("Work Product") belong
------------
to the Company or such Subsidiary. Executive shall promptly disclose such Work
Product to the Board and perform all actions reasonably requested by the Board
(whether during or after the Employment Period) to establish and confirm such
ownership (including, without limitation, executing any assignments, consents,
powers of attorney and other instruments).
8. Non-Compete, Non-Solicitation.
-----------------------------
(a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company he shall become familiar, and he has become familiar, with the
Company's trade secrets and with other Confidential Information concerning the
Company and its predecessors and its Subsidiaries and that his services have
been and shall be of special, unique and extraordinary value to the Company and
its Subsidiaries. Therefore, Executive agrees that, during the Employment
Period and for two years thereafter (the "Noncompete Period"), he shall not
directly or indirectly own any interest in, manage, control, participate in,
consult with, render services for, or in any manner engage in any business
competing with the businesses of the Company or its Subsidiaries, as such
businesses exist or are
-3-
<PAGE>
in process on the date of the termination of Executive's employment, within any
geographical area in which the Company or its Subsidiaries engage or plan to
engage in such businesses. Nothing herein shall prohibit Executive from being a
passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (I) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the Employment
Period or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative statements or communications about the Company
or its Subsidiaries).
9. Enforcement. If, at the time of enforcement of paragraph 6, 7 or
-----------
8 of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reason able under such
circumstances shall be substituted for the stated period, scope or area.
Because Executive's services are unique and because Executive has access to
Confidential Information and Work Product, the parties hereto agree that money
damages would not be an adequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof (without posting a bond or
other security). In addition, in the event of an alleged breach or violation by
Executive of paragraph 8, the Noncompete Period shall be tolled until such
breach or violation has been duly cured. Executive agrees that the restrictions
contained in paragraph 8 are reasonable.
10. Executive's Representations. Executive hereby represents and
---------------------------
warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
-4-
<PAGE>
11. Definitions.
-----------
"Board" shall mean the Board of Managers of ACR Management, L.L.C., a
-----
Delaware limited liability company and the General Partner of the Company.
"Cause" shall mean (i) the commission of a felony or a crime involving
-----
moral turpitude or the commission of any other act or omission involving
dishonesty, disloyalty or fraud, (ii) conduct tending to bring the Company or
any of its Subsidiaries into public disgrace or disrepute, (iii) failure to
perform duties as reasonably directed by the Board or (iv) gross negligence or
willful misconduct with respect to the Company or any of its Subsidiaries.
"Credit Agreement" shall mean that certain Credit Agreement, dated as
----------------
of the date hereof, by and among the Company, ACR Management, L.L.C., and the
lenders a party thereto.
"Recapitalization Agreement" shall mean that certain
---------------------------
Recapitalization Agreement, dated as of June 1, 1998 and amended as of July 22,
1998, by and among the Company, the purchasers listed on the Schedule of
Purchasers and the current owners listed on the Schedule of Current Owners.
"Subsidiaries" means, with respect to any person, any corporation,
------------
limited partnership, partnership, association or business entity of which (a) if
a corporation, a majority of the total voting power of shares of 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 that person or one or more of the other Subsidiaries
of that person or a combination thereof, or (b) if a limited partnership,
partnership, association or other business entity (other than a corporation), a
majority of partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by any person or one or more
Subsidiaries of that person or a combination thereof. For purposes hereof, a
person or persons shall be deemed to have a majority ownership interest in a
limited partnership, partnership, association or other business entity (other
than a corporation) if such person or persons shall be allocated a majority of
the limited partnership, partnership, association or other business entity gains
or losses or shall be or control any managing partner or general partner of such
limited partnership, partnership, association or other business entity.
12. Survival. Paragraphs 6, 7 and 8 and paragraphs 11 through 20
--------
shall survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.
13. Notices. Any notice provided for in this Agreement shall be in
-------
writing and shall be either personally delivered, sent by reputable overnight
courier service (charges prepaid) or mailed by first class mail, return receipt
requested, to the recipient at the address below indicated:
-5-
<PAGE>
Notices to Executive:
--------------------
Ray G. Anthony
301 Meadowlark Drive
Uniontown, PA 15401
Notices to the Company:
----------------------
Anthony Crane Rental, L.P.
c/o Bain Capital, Inc.
Two Copley Plaza
Boston, MA 02116
Attn: Paul Edgerley
Andrew Balson
Paige Daly
with a copy to:
--------------
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attn: James L. Learner
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.
14. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
15. Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
16. No Strict Construction. The language used in this Agreement
----------------------
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
-6-
<PAGE>
17. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
18. Successors and Assigns. This Agreement is intended to bind and
----------------------
inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his obligations hereunder without the prior written
consent of the Company.
19. Arbitration. Any controversy, dispute or claim arising out of or
-----------
relating in any way to this Agreement that cannot be resolved by negotiation
between the Company and Executive shall be settled by arbitration in Pittsburgh,
Pennsylvania. Such arbitration shall be administered by the Center for Public
Resources Institute for Dispute Resolutions (the "Institute") in accordance with
---------
its then prevailing Rules for Non-Administered Arbitration of Business Disputes
by an independent and impartial arbitrator. The arbitration shall be governed
by the United States Arbitration Act, 9 U.S.C. (S) 1 et seq. The fees and
-- ---
expenses of the Institute and the arbitrator shall be shared equally by
Executive and the Company and advanced by them from time to time as required;
provided that at the conclusion of the arbitration, the arbitrator shall award
- -------- ----
costs and expenses (including the costs of the arbitration previously advanced
and the fees and expenses of attorneys, accountants and other experts) to the
prevailing party. The arbitrator shall permit and facilitate all reasonable
requests for discovery. The arbitrator shall render his award within 90 days of
the conclusion of the arbitration hearing. The arbitrator shall be expressly
empowered to award to either party the full amount of any losses in connection
with any dispute between them arising out of or relating in any way to this
Agreement. The award rendered by the arbitrator shall be final and not subject
to judicial review, and judgment thereon may be entered in any court of
competent jurisdiction.
20. Choice of Law. All issues and questions concerning the
-------------
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the
Commonwealth of Pennsylvania or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania.
21. Amendment and Waiver. The provisions of this Agreement may be
--------------------
amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
* * * * *
-7-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
ANTHONY CRANE RENTAL, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Andrew B. Balson
--------------------------
Its: Secretary
--------------------------
/s/ Ray G. Anthony
--------------------------------
Ray G. Anthony
<PAGE>
EXHIBIT 10.14
[EXECUTION COPY]
CONSULTING AND NON-COMPETITION AGREEMENT
----------------------------------------
THIS AGREEMENT is entered into as of July 22, 1998 by and between
Samuel R. Anthony (the "Consultant") and Anthony Crane Rental, L.P., a
----------
Pennsylvania limited partnership (the "Company"). The Company and Consultant are
-------
sometimes collectively referred to herein as the "Parties" and individually as a
-------
"Party".
-----
Consultant has been an employee, officer, director and stockholder of
the Company, and as such, possesses special knowledge, abilities and experience
regarding the business of the Company. The Company, Bain/ACR, L.L.C., a Delaware
limited liability company, ACR Management, L.L.C., a Delaware limited liability
company and certain other person are parties to a Recapitalization Agreement
dated as of June 1, 1998 and amended as of July 21, 1998, whereby a
recapitalization of the Company will be consummated (the "Recapitalization").
----------------
Upon the consummation of the Recapitalization, the Company desires to obtain the
services of Consultant to consult with and perform services as an independent
contractor for the Company with respect to its businesses, and Consultant
desires to provide services to the Company upon the terms and conditions set
forth in this Agreement.
In consideration of the mutual covenants and agreements set forth
herein, the Parties agree as follows:
1. Consulting Services. The Company hereby engages Consultant as an
-------------------
independent contractor, and not as an employee, to render consulting services to
the Company as hereinafter provided, and Consultant hereby accepts such
engagement, for a period commencing on the Closing Date (as defined in the
Recapitalization Agreement) and terminating as provided in paragraph 3 below
(the "Consulting Period"). Consultant shall not have any authority to bind or
-----------------
act on behalf of the Company. During the Consulting Period, Consultant shall
render such consulting services to the Company in connection with the Company's
business as the Company's Chief Executive Officer or the Executive Committee of
the Board of Managers of the Company's general partner from time to time
requests, provided that Consultant shall be entitled to four weeks of vacation
-------- ----
per annum.
2. Compensation; Reimbursement. In consideration of Consultant's
---------------------------
consulting services set forth in paragraph 1 above, and in consideration of the
non-competition covenant set forth in paragraph 6 below, the Company shall pay
to Consultant $255,000 annually to be paid monthly (the "Consulting and Non-
-------------------
Compete Payment"). Consultant shall not be entitled to any fringe benefits or
- ---------------
perquisites from the Company. The Company shall reimburse Consultant for all
reasonable expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company's policies in effect from
time to time with respect to travel, entertainment and other business expenses,
subject to the Company's requirements with respect to reporting and
documentation of such expenses.
<PAGE>
3. Term.
----
(a) The Consulting Period shall continue until the earlier to occur
of (i) Consultant's resignation, death or permanent disability or incapacity (as
determined by the Board of Managers of the Company's general partner (the
"Board") in its good faith judgment), (ii) termination by the Company at any
-----
time for Cause (as defined below) or without Cause or (iii) July 22, 2003.
(b) If the Consulting Period is terminated by the Company without
Cause during the term of this Agreement, Consultant shall be entitled to receive
the Consulting and Non-Compete Payment until July 22, 2003. Any such amounts
payable under this Section 3(b) will be payable to Consultant at such times as
such amounts would have been payable had the Consulting Period not been
terminated.
(c) If the Consulting Period is terminated pursuant to clause (a)(i)
above, Consultant shall be entitled to receive the Consulting and Non-Compete
Payment through the date of termination. Any such amounts payable under this
Section 3(c) will be payable at such times as such amounts would have been
payable to Consultant had the Consulting Period not been terminated.
(d) If the Consulting Period is terminated by the Company for Cause,
Consultant shall be entitled to receive the Consulting and Non-Compete Payment
through the date of termina tion. Any such amounts payable under this Section
3(d) will be payable at such times as such amounts would have been payable to
Consultant had the Consulting Period not been terminated.
(e) The Company may offset any amounts Consultant owes it or its
Subsidiaries against any amounts it owes Consultant hereunder.
(f) For purposes of this Agreement, "Cause" means (i) the commission
-----
of a felony or a crime involving moral turpitude or the commission of any other
act or omission involving dishonesty, disloyalty or fraud, (ii) conduct tending
to bring the Company or any of its Subsidiaries into public disgrace or
disrepute, (iii) failure to perform duties as reasonably directed by the Board,
(iv) gross negligence or willful misconduct with respect to the Company or any
of its Subsidiaries or (v) any breach of this Agreement.
4. Confidential Information. Consultant acknowledges that the
------------------------
information, observations and data relating to the business of the Company and
its subsidiaries which Consultant has obtained as an employee, officer, director
and stockholder of the Company and its subsidiaries or shall obtain during the
course of his association with the Company and its subsidiaries and his
performance under this Agreement are the property of the Company and its
subsidiaries. Consultant agrees that he shall not use for his own purposes or
disclose to any third party any of such information, observations or data
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Consultant's acts or omissions. Consultant
shall deliver to the Company at the end of the Consulting Period, or at any
other time the Company may request, all
-2-
<PAGE>
memoranda, notes, plans, records, reports, computer tapes, printouts and
software and other documentation (and copies thereof) relating to the business
of the Company and its subsidiaries which Consultant may then possess or have
under his control.
5. Inventions and Patents. Consultant acknowledges that all
----------------------
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether patentable or
not) which relate to the actual or anticipated business, research and
development or existing or future products or services of the Company and its
subsidiaries and which are conceived, developed or made by him during the
Consulting Period ("Work Product") belong to the Company. Consultant shall
------------
promptly disclose such Work Product to the Board and perform all actions
reasonably requested by the Board (whether during or after the Consulting
Period) to establish and confirm such ownership (including, without limitation,
assignments, powers of attorney and other instruments).
6. Non-Competition.
---------------
(a) In further consideration of the compensation to be paid to
Consultant hereunder, Consultant agrees that during the period beginning on the
Closing Date and ending on the fifth anniversary of the Closing Date (the "Non-
---
Competition Period"), he shall not, directly or indirectly, either for himself
- ------------------
or for any other person, partnership, corporation or company, permit his name to
be used by or participate in any business or enterprise identical to or similar
to any such business which is engaged in by the Company or its subsidiaries as
of the date of this Agreement and which is located anywhere in the world. For
purposes of this Agreement, the term "participate" includes any direct or
indirect interest in any enterprise, whether as an officer, director, employee,
partner, sole proprietor, agent, representative, independent contractor,
consultant, franchisor, franchisee, creditor, owner or otherwise; provided that
-------- ----
the term "participate" shall not include ownership of less than 2% of the stock
of a publicly-held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market. Consultant agrees that this
covenant is reasonable with respect to its duration, geographical area and
scope.
(b) During the Non-Competition Period, Consultant shall not (i)
induce or attempt to induce any employee of the Company or any of its
subsidiaries to leave their employ or in any way interfere with the relationship
between the Company or any of its subsidiaries and any of their employees, (ii)
hire any person who was an employee of the Company or any subsidiary at any time
during the Employment Period or (iii) induce or attempt to induce any supplier,
licensee, licensor, franchisee or other business relation of the Company or any
of its subsidiaries to cease doing business with them or in any way interfere
with the relationship between the Company or any of its subsidiaries and any
such person or business relation (including, without limitation, making any
negative statements or communications about the Company or its subsidiaries).
(c) The Parties hereto agree that the Company would suffer
irreparable harm from a breach by Consultant of any of the covenants or
agreements contained herein. In the event of an alleged or threatened breach by
the Consultant of any of the provisions of this paragraph 6, the Company or its
successors or assigns may, in addition to all other rights and remedies existing
in its favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or
-3-
<PAGE>
other relief in order to enforce or prevent any violations of the provisions
hereof (including the extension of the Non-Competition Period by a period equal
to the length of the violation of this paragraph 6). In the event of an alleged
breach or violation by Consultant of any of the provisions of this paragraph 6,
the Non-Competition Period described above shall be tolled until such alleged
breach or violation has been duly cured. Consultant agrees that these
restrictions are reasonable.
(d) If, at the time of enforcement of any of the provisions of
paragraph 6, a court holds that the restrictions stated therein are unreasonable
under the circumstances then existing, the Parties hereto agree that the maximum
period, scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area.
(e) Consultant agrees that the covenants made in paragraphs 6(a) and
6(b) shall be construed as an agreement independent of any other provision of
this Agreement and shall survive any order of a court of competent jurisdiction
terminating any other provision of this Agreement.
7. Tax Returns. Consultant shall file all tax returns and reports
-----------
required to be filed by him on the basis that Consultant is an independent
contractor, rather than an employee, as defined in Treasury Regulation
(S)31.3121(d)-1(c)(2), and Consultant shall indemnify the Company for the amount
of any employment taxes paid by the Company as the result of Consultant not
withholding employment taxes from the Consulting and Non-Compete Payment.
8. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the Company and its affiliates, successors and assigns
and shall be binding upon and inure to the benefit of Consultant and his legal
representatives and assigns; provided that in no event shall Consultant's
-------- ----
obligations to perform future services for the Company be delegated or
transferred by Consultant without the prior written consent of the Company
(which consent may be withheld in its sole discretion). The Company may assign
or transfer its rights hereunder to any of its affiliates or to a successor
corporation in the event of merger, consolidation or transfer or sale of all or
substantially all of the assets of the Company.
9. Modification of Waiver. No amendment, modification or waiver of
----------------------
this Agreement shall be binding or effective for any purpose unless it is made
in a writing signed by the Party against who enforcement of such amendment,
modification or waiver is sought. No course of dealing between the Parties to
this Agreement shall be deemed to affect or to modify, amend or discharge any
provision or term of this Agreement. No delay on the part of the Company or
Consultant in the exercise of any of their respective rights or remedies shall
operate as a waiver thereof, and no single or partial exercise by the Company or
Consultant of any such right or remedy shall preclude other or further exercises
thereof. A waiver of right or remedy on any one occasion shall not be construed
as a bar to or waiver of any such right or remedy on any other occasion.
10. Governing Law. All issues and questions concerning the
-------------
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law rules or provisions
-4-
<PAGE>
(whether of the Commonwealth of Pennsylvania or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
Commonwealth of Pennsylvania.
11. Severability. Whenever possible each provision and term of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this Agreement shall be held to
be prohibited by or invalid under such applicable law, then such provision or
term shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement;
provided that if a court having competent jurisdiction shall find that the
- -------- ----
covenant contained in paragraph 6(a) hereof is not reasonable, such court shall
have the power to reduce the duration and/or geographic area and/or scope of
such covenant, and the covenant shall be enforceable in this reduced form.
12. No Strict Construction. The language used in this Agreement shall
----------------------
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
Party.
13. Consultant's Representations. Consultant represents and warrants
----------------------------
to the Company that (i) his execution, delivery and performance of this
Agreement does not and shall not conflict with, or result in the breach of or
violation of, any other agreement, instrument, order, judgment or decree to
which he is a party or by which he is bound, (ii) he is not a party to or bound
by any employment agreement, noncompete agreement or confidentiality agreement
with any other person or entity and (iii) upon the execution and delivery of
this Agreement by the Company, this Agreement shall be the valid and binding
obligation of his, enforceable in accordance with its terms.
14. Notice. Any notice required or permitted hereunder shall be given
------
in writing and shall be deemed effectively given upon personal delivery, upon
being sent by reputable overnight courier service (charges prepaid) or upon
deposit in the United States Post Office mail, postage prepaid, addressed to the
other Party hereto at his or its address shown below:
If to the Company:
-----------------
Anthony Crane Rental, L.P.
c/o Bain Capital, Inc.
Two Copley Plaza
Boston, MA 02116
Attn: Paul Edgerley
Andrew Balson
Paige Daly
If to Consultant:
----------------
Samuel R. Anthony
1701 McCorkle Road
Library, PA 15129
-5-
<PAGE>
or at such other address as such Party may designate by ten days advance written
notice to the other Party.
15. Arbitration. Any controversy, dispute or claim arising out of or
-----------
relating in any way to this Agreement that cannot be resolved by negotiation
between the Company and Consultant shall be settled by arbitration in
Pittsburgh, Pennsylvania. Such arbitration shall be administered by the Center
for Public Resources Institute for Dispute Resolutions (the "Institute") in
---------
accordance with its then prevailing Rules for Non-Administered Arbitration of
Business Disputes by an independent and impartial arbitrator. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. (S) 1 et seq.
-- ---
The fees and expenses of the Institute and the arbitrator shall be shared
equally by Consultant and the Company and advanced by them from time to time as
required; provided that at the conclusion of the arbitration, the arbitrator
-------- ----
shall award costs and expenses (including the costs of the arbitration
previously advanced and the fees and expenses of attorneys, accountants and
other experts) to the prevailing party. The arbitrator shall permit and
facilitate all reasonable requests for discovery. The arbitrator shall render
his award within 90 days of the conclusion of the arbitration hearing. The
arbitrator shall be expressly empowered to award to either party the full amount
of any losses in connection with any dispute between them arising out of or
relating in any way to this Agreement. The award rendered by the arbitrator
shall be final and not subject to judicial review, and judgment thereon may be
entered in any court of competent jurisdiction.
16. Headings. The headings used in this Agreement are for convenience
--------
of reference only and do not constitute a part of this Agreement and shall not
be deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement shall be enforced and construed
as if no heading had been used in this Agreement.
17. Counterparts. This Agreement may be executed in counterparts, any
------------
one of which need not contain the signatures of more than one party, but all
such counterparts taken together shall constitute one and the same instrument.
* * * *
-6-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Consulting
Agreement as of the date first above written.
ANTHONY CRANE RENTAL, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Andrew B. Balson
----------------------------------
Its: Secretary
---------------------------------
/s/ Samuel R. Anthony
-------------------------------------
SAMUEL R. ANTHONY
<PAGE>
EXHIBIT 10.15
[EXECUTION COPY]
ANTHONY CRANE RENTAL HOLDINGS, L.P.
EXECUTIVE PURCHASE AGREEMENT
----------------------------
THIS EXECUTIVE PURCHASE AGREEMENT (this "Agreement") is made as of
---------
July 22, 1998, by and between Anthony Crane Rental Holdings, L.P., a
Pennsylvania limited partnership (the "Company"), ACR Management, L.L.C., a
-------
Delaware limited liability company (the "General Partner") and David W. Mahokey.
---------------
Any capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in Section 8 hereof.
WHEREAS, reference is made to the Amended and Restated Limited
Partnership Agreement, dated as of July 22, 1998, by and among the Company and
its partners (the "Partnership Agreement");
---------------------
WHEREAS, reference is made to the Limited Liability Company Agreement,
dated as of July 22, 1998, by and among the General Partner and its members (the
"LLC Agreement"); and
-------------
WHEREAS, the Company and Executive desire to enter into this Agreement
to provide for the sale to Executive by the Company of 158,853.66 of the
Company's Class A Common Units (the "Class A Common Units"); 17,650.41 of the
--------------------
Company's Class L Common Units (the "Class L Common Units"); and a 4% Percentage
--------------------
Interest in the General Partner the (the "Percentage Interest", and together
-------------------
with the Class A Common Units and Class L Common Units, the "Executive Units")
---------------
NOW THEREFORE, in consideration for the premises contained herein and
the mutual obligations of the parties hereto, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive hereto agree as
follows:
1. Purchase and Sale of Executive Units.
------------------------------------
(a) Upon execution of this Agreement, Executive shall purchase, and
the Company shall sell, 158,853.66 Class A Common Units for an aggregate price
of $158,853.66 and 17,650.40 Class L Common Units for an aggregate price of
$1,429,682.92 and Executive shall purchase, and the General Partner shall sell,
the Percentage Interest for an aggregate price of $51,463.42. The Company shall
deliver to Executive an executed copy of the Partnership Agreement indicating
Executive's ownership of such Class A Common Units and Class L Common Units and
the General Partner shall deliver to Executive an executed copy of the LLC
Agreement indicating Executive's ownership of the Percentage Interest.
(b) Representations and Warranties by Executive. In connection with
-------------------------------------------
the purchase and sale of the Executive Units hereunder, Executive represents and
warrants to the Company and the General Partner that:
<PAGE>
(i) The Executive Units to be acquired by Executive pursuant
to this Agreement shall be acquired for Executive's own account and not
with a view to or intention of distribution thereof in violation of the
Securities Act, or any applicable state securities laws, and the Executive
Units shall not be disposed of in contravention of the Securities Act or
any applicable state securities laws.
(ii) Executive is an executive officer of the Company, is
sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in the Executive Units.
(iii) Executive is able to bear the economic risk of his
investment in the Executive Units for an indefinite period of time because
the Executive Units have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
Executive Units and has had full access to such other information
concerning the Company as he has requested. Executive has also reviewed, or
has had an opportunity to review, the following documents: (A) the
Partnership Agreement; (B) the LLC Agreement; (C) the loan agreements,
notes and related documents with the senior and subordinated lenders of the
Company and its Subsidiaries; (D) the Securityholders Agreement and (E) the
Company's audited and unaudited financial statements.
(v) The execution, delivery and performance of this Agreement
by Executive do not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound and upon the
execution and delivery of this Agreement by the Company and the General
Partner, this Agreement shall be the legal, valid and binding obligation of
Executive, enforceable in accordance with its terms.
(vi) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any
person or entity other than the Company.
(vii) Executive has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and he fully
understands the terms and conditions contained herein.
(c) Acknowledgments.
---------------
(i) As an inducement to the Company to issue the Executive Units
to Executive, as a condition thereto, Executive acknowledges and agrees
that:
(A) neither the issuance of the Executive Units to
Executive nor any provision contained herein shall entitle Executive
to remain in the employment
-2-
<PAGE>
of the Company or the General Partner or affect the right of the
Company or the General Partner to terminate Executive's employment at
any time; and
(B) the Company and the General Partner shall not have
any duty or obligation to disclose to Executive, and Executive shall
have no right to be advised of, any material information regarding the
General Partner, the Company and its Subsidiaries at any time prior
to, upon or in connection with the repurchase of Executive Units upon
the termination of Executive's employment with the Company or as
otherwise provided hereunder.
(ii) The Company, the General Partner, and Executive
acknowledge and agree that this Agreement has been executed and delivered,
and the Executive Units have been issued hereunder, in connection with and
as a part of the compensation and incentive arrangements between the
Company, the General Partner and Executive.
2. Right to Purchase Executive Units Upon Termination of Employment.
----------------------------------------------------------------
(a) Repurchase Option. In the event that Executive is no longer
-----------------
employed by the Company as a result of Executive's termination for Cause (the
date of such termination being referred to herein as the "Termination Date"),
----------------
the Executive Units, whether held by Executive or one or more Permitted
Transferees, will be subject to repurchase by the Company and the Investor
pursuant to the terms and conditions set forth in this Section 2 (the
"Repurchase Option").
-----------------
(b) Termination for Cause. If Executive is no longer employed by the
---------------------
Company as a result of Executive's termination for Cause (other than clause
(iii) of the definition thereof), then on or after the Termination Date, the
Company and the General Partner may elect to purchase all or any portion of the
Executive Units at a price equal to the lower of the Original Value thereof or
the Fair Market Value thereof on the Termination Date. If Executive is no
longer employed by the Company as a result of Executive's termination for Cause
pursuant to clause (iii) of the definition thereof, then on or after the
Termination Date, the Company and the General Partner may elect to purchase all
or any portion of the Executive Units at a price equal to the Fair Market Value
thereof on the Termination Date.
(c) Repurchase Procedures. The Company or General Partner may elect
---------------------
to exercise the right to purchase all or any portion of the Executive Units
pursuant to the Repurchase Option by delivering written notice (the "Repurchase
----------
Notice") to the holder or holders of Executive Units within 180 days after
- ------
Executive's Termination Date. The Repurchase Notice will set forth the
number of Executive Units to be acquired from such holder(s), the aggregate
consideration to be paid for such units and the time and place for the closing
of the transaction. If any of the Executive Units are held by Permitted
Transferees of Executive, the Company or General Partner shall purchase the
units elected to be purchased from such holder(s) of Executive Units pro rata
according to the number of Executive Units held by such holder(s) at the time of
delivery of such Repurchase Notice (determined as nearly as practicable to the
nearest unit).
-3-
<PAGE>
(d) Investors' Rights.
-----------------
(i) If for any reason the Company and/or the General Partner
does not elect to purchase all of the Executive Units pursuant to the
Repurchase Option prior to the 180th day following the Termination Date,
the Investor will be entitled to exercise the Repurchase Option, in the
manner set forth in this Section 2, for the Executive Units the Company
and/or the General Partner has not elected to purchase (the "Available
---------
Units"). As soon as practicable, but in any event within thirty (30) days
-----
after the Company determines that there will be any Available Units, the
Company or General Partner will deliver written notice (the "Option
------
Notice") to the Investor setting forth the number of Available Units and
------
the price for each Available Unit.
(ii) The Investor will be permitted to purchase the Available
Units by delivering written notice to the Company within twenty (20) days
after receipt of the Option Notice from the Company (such 20-day period
being referred to herein as the "Investor Election Period").
------------------------
(iii) As soon as practicable but in any event within five (5)
business days after the expiration of the Investor Election Period, the
Company or General Partner will, if necessary, notify the holder(s) of
Executive Units as to the number of Executive Units being purchased from
the holder(s) by the Investor (the "Supplemental Repurchase Notice"). The
------------------------------
Supplemental Repurchase Notice will set forth the number of Executive Units
the Company, the General Partner and the Investor will acquire from such
holder(s), the aggregate consideration to be paid for such units and the
time and place of the closing of the transaction.
(e) Closing. The closing of the transactions contemplated by this
-------
Section 2 will take place on the date designated by the Company or the General
Partner in the Repurchase Notice or the Supplemental Repurchase Notice, as the
case may be, which date will not be more than ninety (90) days after the
delivery of such notice. The Company, the General Partner and/or the Investor,
as the case may be, will pay for the Executive Units to be purchased pursuant to
the Repurchase Option by delivery of, in the case of the Investor, a check
payable to the holder of Executive Units, and in the case of the Company or the
General Partner (i) a check payable to the holder of such Executive Units, (ii)
a note or notes payable in three equal annual installments beginning on the
first anniversary of the Termination Date and bearing interest (payable
quarterly) at a rate per annum equal to 8% or (iii) both (i) and (ii) in the
aggregate amount of the purchase price for such Units; provided, that the
--------
Company and the General Partner may only issue a note or notes to the extent
that they are prohibited by their financing agreements from using cash to pay
for the Executive's Units. Any notes issued by the Company or General Partner
pursuant to this Section 2(e) shall be subject to any restrictive covenants to
which the Company or General Partner is subject at the time of such purchase.
The Company, the General Partner and/or the Investor, as the case may be, will
receive customary representations and warranties from each seller regarding the
sale of the Executive Units, including, but not limited to, the representation
that such seller has good and marketable title to the Executive Units to be
transferred free and clear of all liens, claims and other encumbrances.
(f) Termination of Repurchase Right. The rights of the Company, the
-------------------------------
General
-4-
<PAGE>
Partner and the Investor to repurchase Executive Units pursuant to this Section
2 shall terminate upon the earlier of (i) a Sale of the Company or (ii) a Public
Offering.
3. Restrictions on Transfer. The parties hereby agree that the Executive
------------------------
Units will be subject to the restrictions on Transfer and other provisions
contained in the Securityholders Agreement and will be considered "Other
Securities" for purposes of the Securityholders Agreement.
4. Confidential Information. Executive acknowledges that the
------------------------
information, observations and data obtained by him while employed by the Company
and its Subsidiaries concerning the business or affairs of the Company, or any
of its Subsidiaries ("Confidential Information") are the property of the Company
------------------------
or such Subsidiary. Therefore, Executive agrees that he shall not disclose to
any unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's acts or omissions. Executive
shall deliver to the Company at the Termination Date, or at any other time the
Company may request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or the
business of the Company or any Subsidiary which he may then possess or have
under his control.
5. Inventions and Patents. Executive acknowledges that all inventions,
----------------------
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company or its predecessor and its Subsidiaries ("Work Product") belong to the
------------
Company or such Subsidiary. Executive shall promptly disclose such Work Product
to the Board and perform all actions reasonably requested by the Board (whether
during or after the Employment Period) to establish and confirm such ownership
(including, without limitation, executing any assignments, consents, powers of
attorney and other instruments).
6. Non-Compete, Non-Solicitation.
-----------------------------
(a) In further consideration of the Executive Units to be sold to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company and its Subsidiaries he shall become familiar, and he has
become familiar, with the Company's and its Subsidiaries' trade secrets and with
other Confidential Information concerning the Company and its predecessors and
its Subsidiaries and that his services have been and shall be of special, unique
and extraordinary value to the Company and its Subsidiaries. Therefore,
Executive agrees that, until the Termination Date and for two years thereafter
or earlier upon the date of a repurchase of Executive's Executive Units pursuant
to Section 2 thereof (the "Noncompete Period"), he shall not directly or
-----------------
indirectly own any interest in, manage, control, participate in, consult with,
render services for, or in any manner engage in any business involved in the
business of crane and other lifting equipment rentals or competing with the
businesses of the Company or its Subsidiaries, as such businesses exist or are
in process on the date of the termination of Executive's employment, within any
geographical
-5-
<PAGE>
area in which the Company or its Subsidiaries engage or plan to engage in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time before the Termination
Date or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative statements or communications about the Company
or its Subsidiaries).
7. Enforcement. If, at the time of enforcement of Section 4, 5 or 6 of
-----------
this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area.
Because Executive's services are unique and because Executive has access to
Confidential Information and Work Product, the parties hereto agree that money
damages would not be an adequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof (without posting a bond or
other security). In addition, in the event of an alleged breach or violation by
Executive of Section 6, the Noncompete Period shall be tolled until such breach
or violation has been duly cured. Executive agrees that the restrictions
contained in Section 6 are reasonable.
8. Definitions.
-----------
"Affiliate" has the meaning assigned to it in the Partnership
---------
Agreement.
"Board" means the Board of Managers of the General Partner.
-----
"Cause" means (i) the commission of a felony or a crime involving
-----
moral turpitude or the commission of any other act or omission involving
dishonesty, disloyalty or fraud, (ii) conduct tending to bring the Company or
any of its Subsidiaries into public disgrace or disrepute, (iii) failure to
perform duties as reasonably directed by the Board, (iv) gross negligence or
willful misconduct (including, but not limited to, failing to follow guidelines
as clearly outlined by the Board) with respect to the Company or any of its
Subsidiaries or (v) any breach of this Agreement.
"Common Units" has the meaning assigned to it in the Partnership
------------
Agreement and includes any equity securities issued or issuable directly or
indirectly with respect to such Common
-6-
<PAGE>
Units by way of any dividend or split or exchange or in connection with a
combination of units, recapitalization, merger, consolidation or other
reorganization.
"Executive Units" means collectively the Class A Common Units, Class
---------------
L Common Units and Percentage Interest acquired by the Executive pursuant to
Section 1. Such Units shall continue to be Executive Units in the hands of any
holder other than Executive (except for the Company, the Investor and
transferees in a Public Sale), and except as otherwise provided herein, each
such other holder of Executive Units shall succeed to all rights and obligations
attributable to Executive as a holder of Executive Units hereunder. Executive
Units shall be interests in the Company issued with respect to Executive Units
by way of any split, dividend or recapitalization.
"Fair Market Value" of each Executive Unit means the amount which each
-----------------
such unit would receive upon a complete liquidation of the Company following a
Sale of the Company at its market value as determined in good faith by the Board
and Executive. If the Board and Executive are unable to agree upon such market
value, it shall be determined in good faith by a nationally recognized
investment banking institution selected by the Board, the fees and expenses of
which will be split evenly between the Company and Executive.
"Investor" means Bain/ACR, L.L.C., a Delaware limited liability
--------
company.
"Original Value" with respect to any Executive Unit means the price
--------------
paid by Executive for such Class A Common Unit, Class L Common Unit or
Percentage Interest.
"Partnership Agreement" has the meaning set forth in the preamble.
---------------------
"Permitted Transferee" has the meaning set forth in the
--------------------
Securityholders Agreement.
"Percentage Interest" has the meaning assigned to it in the LLC
-------------------
Agreement.
"Person" shall mean an individual, a partnership, a corporation, a
------
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency, or political subdivision thereof.
"Public Offering" means an offering of the Company's (or a corporate
---------------
successor's) equity securities to the public pursuant to an effective
registration statement under the Securities Act.
"Public Sale" means any sale pursuant to a registered public offering
-----------
under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer or market
maker.
"Recapitalization Agreement" means that certain Recapitalization
--------------------------
Agreement, dated as of June 1, 1998 and amended as of July 21, 1998, by and
among the Company, the purchasers listed on the Schedule of Purchasers and the
current owners listed on the Schedule of Current Owners attached thereto.
-7-
<PAGE>
"Sale of the Company" means (i) any sale of all or substantially all
-------------------
(as defined in the Model Business Corporation Act) of the assets of the Company
and its Subsidiaries on a consolidated basis in one transaction or series of
related transactions, (ii) any sale of all or substantially all of the Common
Units in one transaction or series of related transactions, excluding any sales
of Common Units in a Public Sale or (iii) a merger or consolidation which
accomplishes one of the foregoing; provided that the transactions contemplated
-------- ----
by the Recapitalization Agreement do not constitute a Sale of the Company.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time.
"Securityholders Agreement" means that certain Securityholders
-------------------------
Agreement, dated as of the date hereof, by and among the Company and its
partners.
"Subsidiary" has the meaning assigned to it in the Partnership
----------
Agreement.
"Transfer" has the meaning assigned to it in the Securityholders
--------
Agreement.
9. Notices. Any notice provided for in this Agreement must be in writing
-------
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the Investor at the addresses indicated in the
Company's records and to the other recipients at the address indicated below:
Notices to Executive:
--------------------
Anthony Crane Rental
1165 Camp Hollow Road
Pittsburgh, PA 15122
Attn: David W. Mahokey
Notices to the Company:
----------------------
Anthony Crane Rental Holdings, L.P.
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attn: Paul Edgerley
Andrew Balson
Paige Daly
with a copy to:
--------------
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: James L. Learner
-8-
<PAGE>
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
10. General Provisions.
------------------
(a) Transfers in Violation of Agreement. Any Transfer or attempted
-----------------------------------
Transfer of any Executive Units in violation of any provision of this Agreement
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Executive Units as the owner of such
Executive Units for any purpose.
(b) Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein,
----------------------
this Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the General Partner, the Investor and their respective
successors and assigns (including subsequent holders of Executive Units);
provided that the rights and obligations of Executive under this Agreement shall
- -------- ----
not be assignable except in connection with a permitted Transfer of Executive
Units hereunder.
(f) Arbitration. Any controversy, dispute or claim arising out of or
-----------
relating in any way to this Agreement that cannot be resolved by negotiation
between the Company and Executive shall be settled by arbitration in accordance
with the terms and provisions of Section 8.02 of the Recapitalization Agreement.
(g) Choice of Law. The partnership law of the Commonwealth of
-------------
Pennsylvania shall govern all questions concerning the relative rights of the
Company and its partners. The limited liability company law of the State of
Delaware shall govern all questions concerning the relative rights of the
General Partner and its members. All other issues and questions concerning
-9-
<PAGE>
the construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania.
(h) Remedies. Each of the parties to this Agreement (including the
--------
Investor) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney's
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement.
(i) Amendment and Waiver. The provisions of this Agreement may be
--------------------
amended and waived only with the prior written consent of the Company, the
General Partner and Executive. The provisions of Section 2 may be amended and
waived only with the prior written consent of the Investor.
(j) Third-Party Beneficiaries. The parties hereto acknowledge and
-------------------------
agree that the Investors are third party beneficiaries of this Agreement. This
Agreement will inure to the benefit of and be enforceable by the Investor and
its successors and assigns.
* * * *
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Purchase Agreement on the date first written above.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Andrew B. Balson
--------------------------------------
Its: Secretary
--------------------------------------
ACR MANAGEMENT, L.L.C.
By: /s/ Andrew B. Balson
--------------------------------------
Its: Secretary
--------------------------------------
/s/ David W. Mahokey
--------------------------------------------
David W. Mahokey
<PAGE>
EXHIBIT 10.16
[EXECUTION COPY]
ANTHONY CRANE RENTAL HOLDINGS, L.P.
EXECUTIVE PURCHASE AGREEMENT
----------------------------
THIS EXECUTIVE PURCHASE AGREEMENT (this "Agreement") is made as of
---------
July 22, 1998, by and between Anthony Crane Rental Holdings, L.P., a
Pennsylvania limited partnership (the "Company"), ACR Management, L.L.C., a
-------
Delaware limited liability company (the "General Partner") and Arthur J.
---------------
Innamorato, Jr. Any capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in Section 8 hereof.
WHEREAS, reference is made to the Amended and Restated Limited
Partnership Agreement, dated as of July 22, 1998, by and among the Company and
its partners (the "Partnership Agreement");
---------------------
WHEREAS, reference is made to the Limited Liability Company Agreement,
dated as of July 22, 1998, by and among the General Partner and its members (the
"LLC Agreement"); and
-------------
WHEREAS, the Company and Executive desire to enter into this Agreement
to provide for the sale to Executive by the Company of 39,713.41 of the
Company's Class A Common Units (the "Class A Common Units"); 4,412.60 of the
--------------------
Company's Class L Common Units (the "Class L Common Units"); and a 1% Percentage
--------------------
Interest in the General Partner the (the "Percentage Interest", and together
-------------------
with the Class A Common Units and Class L Common Units, the "Executive Units").
---------------
NOW THEREFORE, in consideration for the premises contained herein and
the mutual obligations of the parties hereto, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive hereto agree as
follows:
1. Purchase and Sale of Executive Units.
------------------------------------
(a) Upon execution of this Agreement, Executive shall purchase, and
the Company shall sell, 39,713.41 Class A Common Units for an aggregate price of
$39,713.41 and 4,412.60 Class L Common Units for an aggregate price of
$357,420.73 and Executive shall purchase, and the General Partner shall sell,
the Percentage Interest for an aggregate price of $12,865.86. The Company shall
deliver to Executive an executed copy of the Partnership Agreement indicating
Executive's ownership of such Class A Common Units and Class L Common Units and
the General Partner shall deliver to Executive an executed copy of the LLC
Agreement indicating Executive's ownership of the Percentage Interest.
(b) Representations and Warranties by Executive. In connection with
-------------------------------------------
the purchase and sale of the Executive Units hereunder, Executive represents and
warrants to the Company and the General Partner that:
<PAGE>
(i) The Executive Units to be acquired by Executive pursuant to this
Agreement shall be acquired for Executive's own account and not with a view to
or intention of distribution thereof in violation of the Securities Act, or any
applicable state securities laws, and the Executive Units shall not be disposed
of in contravention of the Securities Act or any applicable state securities
laws.
(ii) Executive is an executive officer of the Company, is
sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in the Executive Units.
(iii) Executive is able to bear the economic risk of his investment in
the Executive Units for an indefinite period of time because the Executive Units
have not been registered under the Securities Act and, therefore, cannot be sold
unless subsequently registered under the Securities Act or an exemption from
such registration is available.
(iv) Executive has had an opportunity to ask questions and receive
answers concerning the terms and conditions of the offering of Executive Units
and has had full access to such other information concerning the Company as he
has requested. Executive has also reviewed, or has had an opportunity to review,
the following documents: (A) the Partnership Agreement; (B) the LLC Agreement;
(C) the loan agreements, notes and related documents with the senior and
subordinated lenders of the Company and its Subsidiaries; (D) the
Securityholders Agreement and (E) the Company's audited and unaudited financial
statements.
(v) The execution, delivery and performance of this Agreement by
Executive do not and shall not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which
Executive is a party or by which he is bound and upon the execution and delivery
of this Agreement by the Company and the General Partner, this Agreement shall
be the legal, valid and binding obligation of Executive, enforceable in
accordance with its terms.
(vi) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any person or
entity other than the Company.
(vii) Executive has consulted with independent legal counsel regarding
his rights and obligations under this Agreement and he fully understands the
terms and conditions contained herein.
(c) Acknowledgments.
---------------
(i) As an inducement to the Company to issue the Executive Units
to Executive, as a condition thereto, Executive acknowledges and agrees
that:
(A) neither the issuance of the Executive Units to Executive
nor any provision contained herein shall entitle Executive to remain
in the employment
-2-
<PAGE>
of the Company or the General Partner or affect the right of the
Company or the General Partner to terminate Executive's employment at
any time; and
(B) the Company and the General Partner shall not have any
duty or obligation to disclose to Executive, and Executive shall have
no right to be advised of, any material information regarding the
General Partner, the Company and its Subsidiaries at any time prior
to, upon or in connection with the repurchase of Executive Units upon
the termination of Executive's employment with the Company or as
otherwise provided hereunder.
(ii) The Company, the General Partner, and Executive acknowledge
and agree that this Agreement has been executed and delivered, and the
Executive Units have been issued hereunder, in connection with and as a
part of the compensation and incentive arrangements between the Company,
the General Partner and Executive.
2. Right to Purchase Executive Units Upon Termination of Employment.
----------------------------------------------------------------
(a) Repurchase Option. In the event that Executive is no longer
-----------------
employed by the Company as a result of Executive's termination for Cause (the
date of such termination being referred to herein as the "Termination Date"),
----------------
the Executive Units, whether held by Executive or one or more Permitted
Transferees, will be subject to repurchase by the Company and the Investor
pursuant to the terms and conditions set forth in this Section 2 (the
"Repurchase Option").
- ------------------
(b) Termination for Cause. If Executive is no longer employed by the
---------------------
Company as a result of Executive's termination for Cause (other than clause
(iii) of the definition thereof), then on or after the Termination Date, the
Company and the General Partner may elect to purchase all or any portion of the
Executive Units at a price equal to the lower of the Original Value thereof or
the Fair Market Value thereof on the Termination Date. If Executive is no
longer employed by the Company as a result of Executive's termination for Cause
pursuant to clause (iii) of the definition thereof, then on or after the
Termination Date, the Company and the General Partner may elect to purchase all
or any portion of the Executive Units at a price equal to the Fair Market Value
thereof on the Termination Date.
(c) Repurchase Procedures. The Company or General Partner may elect
---------------------
to exercise the right to purchase all or any portion of the Executive Units
pursuant to the Repurchase Option by delivering written notice (the "Repurchase
----------
Notice") to the holder or holders of Executive Units within 180 days after
- ------
Executive's Termination Date. The Repurchase Notice will set forth the number
of Executive Units to be acquired from such holder(s), the aggregate
consideration to be paid for such units and the time and place for the closing
of the transaction. If any of the Executive Units are held by Permitted
Transferees of Executive, the Company or General Partner shall purchase the
units elected to be purchased from such holder(s) of Executive Units pro rata
according to the number of Executive Units held by such holder(s) at the time of
delivery of such Repurchase Notice (determined as nearly as practicable to the
nearest unit).
-3-
<PAGE>
(d) Investors' Rights.
-----------------
(i) If for any reason the Company and/or the General Partner
does not elect to purchase all of the Executive Units pursuant to the
Repurchase Option prior to the 180th day following the Termination Date,
the Investor will be entitled to exercise the Repurchase Option, in the
manner set forth in this Section 2, for the Executive Units the Company
and/or the General Partner has not elected to purchase (the "Available
---------
Units"). As soon as practicable, but in any event within thirty (30) days
-----
after the Company determines that there will be any Available Units, the
Company or General Partner will deliver written notice (the "Option
------
Notice") to the Investor setting forth the number of Available Units and
------
the price for each Available Unit.
(ii) The Investor will be permitted to purchase the Available
Units by delivering written notice to the Company within twenty (20) days
after receipt of the Option Notice from the Company (such 20-day period
being referred to herein as the "Investor Election Period").
------------------------
(iii) As soon as practicable but in any event within five (5)
business days after the expiration of the Investor Election Period, the
Company or General Partner will, if necessary, notify the holder(s) of
Executive Units as to the number of Executive Units being purchased from
the holder(s) by the Investor (the "Supplemental Repurchase Notice"). The
------------------------------
Supplemental Repurchase Notice will set forth the number of Executive Units
the Company, the General Partner and the Investor will acquire from such
holder(s), the aggregate consideration to be paid for such units and the
time and place of the closing of the transaction.
(e) Closing. The closing of the transactions contemplated by this
-------
Section 2 will take place on the date designated by the Company or the General
Partner in the Repurchase Notice or the Supplemental Repurchase Notice, as the
case may be, which date will not be more than ninety (90) days after the
delivery of such notice. The Company, the General Partner and/or the Investor,
as the case may be, will pay for the Executive Units to be purchased pursuant to
the Repurchase Option by delivery of, in the case of the Investor, a check
payable to the holder of Executive Units, and in the case of the Company or the
General Partner (i) a check payable to the holder of such Executive Units, (ii)
a note or notes payable in three equal annual installments beginning on the
first anniversary of the Termination Date and bearing interest (payable
quarterly) at a rate per annum equal to 8% or (iii) both (i) and (ii) in the
aggregate amount of the purchase price for such Units; provided, that the
--------
Company and the General Partner may only issue a note or notes to the extent
that they are prohibited by their financing agreements from using cash to pay
for the Executive's Units. Any notes issued by the Company or General Partner
pursuant to this Section 2(e) shall be subject to any restrictive covenants to
which the Company or General Partner is subject at the time of such purchase.
The Company, the General Partner and/or the Investor, as the case may be, will
receive customary representations and warranties from each seller regarding the
sale of the Executive Units, including, but not limited to, the representation
that such seller has good and marketable title to the Executive Units to be
transferred free and clear of all liens, claims and other encumbrances.
(f) Termination of Repurchase Right. The rights of the Company, the
-------------------------------
General
-4-
<PAGE>
Partner and the Investor to repurchase Executive Units pursuant to this Section
2 shall terminate upon the earlier of (i) a Sale of the Company or (ii) a Public
Offering.
3. Restrictions on Transfer. The parties hereby agree that the Executive
------------------------
Units will be subject to the restrictions on Transfer and other provisions
contained in the Securityholders Agreement and will be considered "Other
Securities" for purposes of the Securityholders Agreement.
4. Confidential Information. Executive acknowledges that the
------------------------
information, observations and data obtained by him while employed by the Company
and its Subsidiaries concerning the business or affairs of the Company, or any
of its Subsidiaries ("Confidential Information") are the property of the Company
------------------------
or such Subsidiary. Therefore, Executive agrees that he shall not disclose to
any unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's acts or omissions. Executive
shall deliver to the Company at the Termination Date, or at any other time the
Company may request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or the
business of the Company or any Subsidiary which he may then possess or have
under his control.
5. Inventions and Patents. Executive acknowledges that all inventions,
----------------------
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company or its predecessor and its Subsidiaries ("Work Product") belong to the
------------
Company or such Subsidiary. Executive shall promptly disclose such Work Product
to the Board and perform all actions reasonably requested by the Board (whether
during or after the Employment Period) to establish and confirm such ownership
(including, without limitation, executing any assignments, consents, powers of
attorney and other instruments).
6. Non-Compete, Non-Solicitation.
-----------------------------
(a) In further consideration of the Executive Units to be sold to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company and its Subsidiaries he shall become familiar, and he has
become familiar, with the Company's and its Subsidiaries' trade secrets and with
other Confidential Information concerning the Company and its predecessors and
its Subsidiaries and that his services have been and shall be of special, unique
and extraordinary value to the Company and its Subsidiaries. Therefore,
Executive agrees that, until the Termination Date and for two years thereafter
or earlier upon the date of a repurchase of Executive's Executive Units pursuant
to Section 2 thereof (the "Noncompete Period"), he shall not directly or
-----------------
indirectly own any interest in, manage, control, participate in, consult with,
render services for, or in any manner engage in any business involved in the
business of crane and other lifting equipment rentals or competing with the
businesses of the Company or its Subsidiaries, as such businesses exist
or are in process on the date of the termination of Executive's employment,
within any geographical
-5-
<PAGE>
area in which the Company or its Subsidiaries engage or plan to engage in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time before the Termination
Date or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative statements or communications about the Company
or its Subsidiaries).
7. Enforcement. If, at the time of enforcement of Section 4, 5 or 6 of
-----------
this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area.
Because Executive's services are unique and because Executive has access to
Confidential Information and Work Product, the parties hereto agree that money
damages would not be an adequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof (without posting a bond or
other security). In addition, in the event of an alleged breach or violation by
Executive of Section 6, the Noncompete Period shall be tolled until such breach
or violation has been duly cured. Executive agrees that the restrictions
contained in Section 6 are reasonable.
8. Definitions.
-----------
"Affiliate" has the meaning assigned to it in the Partnership
---------
Agreement.
"Board" means the Board of Managers of the General Partner.
-----
"Cause" means (i) the commission of a felony or a crime involving
-----
moral turpitude or the commission of any other act or omission involving
dishonesty, disloyalty or fraud, (ii) conduct tending to bring the Company or
any of its Subsidiaries into public disgrace or disrepute, (iii) failure to
perform duties as reasonably directed by the Board, (iv) gross negligence or
willful misconduct (including, but not limited to, failing to follow guidelines
as clearly outlined by the Board) with respect to the Company or any of its
Subsidiaries or (v) any breach of this Agreement.
"Common Units" has the meaning assigned to it in the Partnership
------------
Agreement and includes any equity securities issued or issuable directly or
indirectly with respect to such Common
-6-
<PAGE>
Units by way of any dividend or split or exchange or in connection with a
combination of units, recapitalization, merger, consolidation or other
reorganization.
"Executive Units" means collectively the Class A Common Units, Class
---------------
L Common Units and Percentage Interest acquired by the Executive pursuant to
Section 1. Such Units shall continue to be Executive Units in the hands of any
holder other than Executive (except for the Company, the Investor and
transferees in a Public Sale), and except as otherwise provided herein, each
such other holder of Executive Units shall succeed to all rights and obligations
attributable to Executive as a holder of Executive Units hereunder. Executive
Units shall be interests in the Company issued with respect to Executive Units
by way of any split, dividend or recapitalization.
"Fair Market Value" of each Executive Unit means the amount which each
-----------------
such unit would receive upon a complete liquidation of the Company following a
Sale of the Company at its market value as determined in good faith by the Board
and Executive. If the Board and Executive are unable to agree upon such market
value, it shall be determined in good faith by a nationally recognized
investment banking institution selected by the Board, the fees and expenses of
which will be split evenly between the Company and Executive.
"Investor" means Bain/ACR, L.L.C., a Delaware limited liability
--------
company.
"Original Value" with respect to any Executive Unit means the price
--------------
paid by Executive for such Class A Common Unit, Class L Common Unit or
Percentage Interest.
"Partnership Agreement" has the meaning set forth in the preamble.
---------------------
"Permitted Transferee" has the meaning set forth in the
--------------------
Securityholders Agreement.
"Percentage Interest" has the meaning assigned to it in the LLC
-------------------
Agreement.
"Person" shall mean an individual, a partnership, a corporation, a
------
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency, or political subdivision thereof.
"Public Offering" means an offering of the Company's (or a corporate
---------------
successor's) equity securities to the public pursuant to an effective
registration statement under the Securities Act.
"Public Sale" means any sale pursuant to a registered public offering
-----------
under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer or market
maker.
"Recapitalization Agreement" means that certain Amended and Restated
--------------------------
Recapitalization Agreement, dated as of June 1, 1998 and amended as of July 21,
1998, by and among the Company, the purchasers listed on the Schedule of
Purchasers and the current owners listed on the Schedule of Current Owners
attached thereto.
-7-
<PAGE>
"Sale of the Company" means (i) any sale of all or substantially all
-------------------
(as defined in the Model Business Corporation Act) of the assets of the Company
and its Subsidiaries on a consolidated basis in one transaction or series of
related transactions, (ii) any sale of all or substantially all of the Common
Units in one transaction or series of related transactions, excluding any sales
of Common Units in a Public Sale or (iii) a merger or consolidation which
accomplishes one of the foregoing; provided that the transactions contemplated
-------- ----
by the Recapitalization Agreement do not constitute a Sale of the Company.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time.
"Securityholders Agreement" means that certain Securityholders
-------------------------
Agreement, dated as of the date hereof, by and among the Company and its
partners.
"Subsidiary" has the meaning assigned to it in the Partnership
----------
Agreement.
"Transfer" has the meaning assigned to it in the Securityholders
--------
Agreement.
9. Notices. Any notice provided for in this Agreement must be in writing
-------
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the Investor at the addresses indicated in the
Company's records and to the other recipients at the address indicated below:
Notices to Executive:
--------------------
Arthur J. Innamorato, Jr.
Rural Rt. 4, Scaife Road.
Sewickley, PA 15143
Notices to the Company:
----------------------
Anthony Crane Rental Holdings, L.P.
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attn: Paul Edgerley
Andrew Balson
Paige Daly
with a copy to:
--------------
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: James L. Learner
-8-
<PAGE>
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
10. General Provisions.
------------------
(a) Transfers in Violation of Agreement. Any Transfer or attempted
-----------------------------------
Transfer of any Executive Units in violation of any provision of this Agreement
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Executive Units as the owner of such
Executive Units for any purpose.
(b) Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein, this
----------------------
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the General Partner, the Investor and their respective
successors and assigns (including subsequent holders of Executive Units);
provided that the rights and obligations of Executive under this Agreement shall
- -------- ----
not be assignable except in connection with a permitted Transfer of Executive
Units hereunder.
(f) Arbitration. Any controversy, dispute or claim arising out of or
-----------
relating in any way to this Agreement that cannot be resolved by negotiation
between the Company and Executive shall be settled by arbitration in accordance
with the terms and provisions of Section 8.02 of the Recapitalization Agreement.
(g) Choice of Law. The partnership law of the Commonwealth of
-------------
Pennsylvania shall govern all questions concerning the relative rights of the
Company and its partners. The limited liability company law of the State of
Delaware shall govern all questions concerning the relative rights of the
General Partner and its members. All other issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and
-9-
<PAGE>
schedules hereto shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Pennsylvania, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the Commonwealth of
Pennsylvania or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the Commonwealth of Pennsylvania.
(h) Remedies. Each of the parties to this Agreement (including the
--------
Investor) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney's
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement.
(i) Amendment and Waiver. The provisions of this Agreement may be
--------------------
amended and waived only with the prior written consent of the Company, the
General Partner and Executive. The provisions of Section 2 may be amended and
waived only with the prior written consent of the Investor.
(j) Third-Party Beneficiaries. The parties hereto acknowledge and
-------------------------
agree that the Investors are third party beneficiaries of this Agreement. This
Agreement will inure to the benefit of and be enforceable by the Investor and
its successors and assigns.
* * * *
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Executive Purchase
Agreement on the date first written above.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Andrew B. Balson
--------------------------------------
Its: Secretary
--------------------------------------
ACR MANAGEMENT, L.L.C.
By: /s/ Andrew B. Balson
--------------------------------------
Its: Secretary
--------------------------------------
/s/ Arthur J. Innamorato, Jr.
--------------------------------------------
Arthur J. Innamorato, Jr.
<PAGE>
EXHIBIT 10.17
[EXECUTION COPY]
ANTHONY CRANE RENTAL HOLDINGS, L.P.
EXECUTIVE PURCHASE AGREEMENT
----------------------------
THIS EXECUTIVE PURCHASE AGREEMENT (this "Agreement") is made as of
---------
July 22, 1998, by and between Anthony Crane Rental Holdings, L.P., a
Pennsylvania limited partnership (the "Company"), ACR Management, L.L.C., a
-------
Delaware limited liability company (the "General Partner") and Albert C. Bove.
---------------
Any capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in Section 8 hereof.
WHEREAS, reference is made to the Amended and Restated Limited
Partnership Agreement, dated as of July 22, 1998, by and among the Company and
its partners (the "Partnership Agreement");
---------------------
WHEREAS, reference is made to the Limited Liability Company Agreement,
dated as of July 22, 1998, by and among the General Partner and its members (the
"LLC Agreement"); and
-------------
WHEREAS, the Company and Executive desire to enter into this Agreement
to provide for the sale to Executive by the Company of 39,713.41 of the
Company's Class A Common Units (the "Class A Common Units"); 4,412.60 of the
--------------------
Company's Class L Common Units (the "Class L Common Units"); and a 1% Percentage
--------------------
Interest in the General Partner the (the "Percentage Interest", and together
-------------------
with the Class A Common Units and Class L Common Units, the "Executive Units")
---------------
NOW THEREFORE, in consideration for the premises contained herein and
the mutual obligations of the parties hereto, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive hereto agree as
follows:
1. Purchase and Sale of Executive Units.
------------------------------------
(a) Upon execution of this Agreement, Executive shall purchase, and
the Company shall sell, 39,713.41 Class A Common Units for an aggregate price of
$39,713.41 and 4,412.60 Class L Common Units for an aggregate price of
$357,420.73 and Executive shall purchase, and the General Partner shall sell,
the Percentage Interest for an aggregate price of $12,865.86. The Company shall
deliver to Executive an executed copy of the Partnership Agreement indicating
Executive's ownership of such Class A Common Units and Class L Common Units and
the General Partner shall deliver to Executive an executed copy of the LLC
Agreement indicating Executive's ownership of the Percentage Interest.
(b) Representations and Warranties by Executive. In connection with
-------------------------------------------
the purchase and sale of the Executive Units hereunder, Executive represents and
warrants to the Company and the General Partner that:
<PAGE>
(i) The Executive Units to be acquired by Executive pursuant
to this Agreement shall be acquired for Executive's own account and not
with a view to or intention of distribution thereof in violation of the
Securities Act, or any applicable state securities laws, and the Executive
Units shall not be disposed of in contravention of the Securities Act or
any applicable state securities laws.
(ii) Executive is an executive officer of the Company, is
sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in the Executive Units.
(iii) Executive is able to bear the economic risk of his
investment in the Executive Units for an indefinite period of time because
the Executive Units have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
Executive Units and has had full access to such other information
concerning the Company as he has requested. Executive has also reviewed, or
has had an opportunity to review, the following documents: (A) the
Partnership Agreement; (B) the LLC Agreement; (C) the loan agreements,
notes and related documents with the senior and subordinated lenders of the
Company and its Subsidiaries; (D) the Securityholders Agreement and (E) the
Company's audited and unaudited financial statements.
(v) The execution, delivery and performance of this Agreement
by Executive do not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound and upon the
execution and delivery of this Agreement by the Company and the General
Partner, this Agreement shall be the legal, valid and binding obligation of
Executive, enforceable in accordance with its terms.
(vi) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any
person or entity other than the Company.
(vii) Executive has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and he fully
understands the terms and conditions contained herein.
(c) Acknowledgments.
---------------
(i) As an inducement to the Company to issue the Executive Units
to Executive, as a condition thereto, Executive acknowledges and agrees
that:
(A) neither the issuance of the Executive Units to
Executive nor any provision contained herein shall entitle Executive
to remain in the employment
-2-
<PAGE>
of the Company or the General Partner or affect the right of the
Company or the General Partner to terminate Executive's employment at
any time; and
(B) the Company and the General Partner shall not have any
duty or obligation to disclose to Executive, and Executive shall have
no right to be advised of, any material information regarding the
General Partner, the Company and its Subsidiaries at any time prior
to, upon or in connection with the repurchase of Executive Units upon
the termination of Executive's employment with the Company or as
otherwise provided hereunder.
(ii) The Company, the General Partner, and Executive acknowledge
and agree that this Agreement has been executed and delivered, and the
Executive Units have been issued hereunder, in connection with and as a
part of the compensation and incentive arrangements between the Company,
the General Partner and Executive.
2. Right to Purchase Executive Units Upon Termination of Employment.
----------------------------------------------------------------
(a) Repurchase Option. In the event that Executive is no longer
-----------------
employed by the Company as a result of Executive's termination for Cause (the
date of such termination being referred to herein as the "Termination Date"),
----------------
the Executive Units, whether held by Executive or one or more Permitted
Transferees, will be subject to repurchase by the Company and the Investor
pursuant to the terms and conditions set forth in this Section 2 (the
"Repurchase Option").
- ------------------
(b) Termination for Cause. If Executive is no longer employed by the
---------------------
Company as a result of Executive's termination for Cause (other than clause
(iii) of the definition thereof), then on or after the Termination Date, the
Company and the General Partner may elect to purchase all or any portion of the
Executive Units at a price equal to the lower of the Original Value thereof or
the Fair Market Value thereof on the Termination Date. If Executive is no
longer employed by the Company as a result of Executive's termination for Cause
pursuant to clause (iii) of the definition thereof, then on or after the
Termination Date, the Company and the General Partner may elect to purchase all
or any portion of the Executive Units at a price equal to the Fair Market Value
thereof on the Termination Date.
(c) Repurchase Procedures. The Company or General Partner may elect
---------------------
to exercise the right to purchase all or any portion of the Executive Units
pursuant to the Repurchase Option by delivering written notice (the "Repurchase
----------
Notice") to the holder or holders of Executive Units within 180 days after
- ------
Executive's Termination Date. The Repurchase Notice will set forth the number of
Executive Units to be acquired from such holder(s), the aggregate consideration
to be paid for such units and the time and place for the closing of the
transaction. If any of the Executive Units are held by Permitted Transferees of
Executive, the Company or General Partner shall purchase the units elected to be
purchased from such holder(s) of Executive Units pro rata according to the
number of Executive Units held by such holder(s) at the time of delivery of such
Repurchase Notice (determined as nearly as practicable to the nearest unit).
-3-
<PAGE>
(d) Investors' Rights.
-----------------
(i) If for any reason the Company and/or the General Partner
does not elect to purchase all of the Executive Units pursuant to the
Repurchase Option prior to the 180th day following the Termination Date,
the Investor will be entitled to exercise the Repurchase Option, in the
manner set forth in this Section 2, for the Executive Units the Company
and/or the General Partner has not elected to purchase (the "Available
---------
Units"). As soon as practicable, but in any event within thirty (30)
------
days after the Company determines that there will be any Available Units,
the Company or General Partner will deliver written notice (the "Option
------
Notice") to the Investor setting forth the number of Available Units and
-------
the price for each Available Unit.
(ii) The Investor will be permitted to purchase the Available
Units by delivering written notice to the Company within twenty (20) days
after receipt of the Option Notice from the Company (such 20-day period
being referred to herein as the "Investor Election Period").
------------------------
(iii) As soon as practicable but in any event within five (5)
business days after the expiration of the Investor Election Period, the
Company or General Partner will, if necessary, notify the holder(s) of
Executive Units as to the number of Executive Units being purchased from
the holder(s) by the Investor (the "Supplemental Repurchase Notice"). The
------------------------------
Supplemental Repurchase Notice will set forth the number of Executive Units
the Company, the General Partner and the Investor will acquire from such
holder(s), the aggregate consideration to be paid for such units and the
time and place of the closing of the transaction.
(e) Closing. The closing of the transactions contemplated by this
-------
Section 2 will take place on the date designated by the Company or the General
Partner in the Repurchase Notice or the Supplemental Repurchase Notice, as the
case may be, which date will not be more than ninety (90) days after the
delivery of such notice. The Company, the General Partner and/or the Investor,
as the case may be, will pay for the Executive Units to be purchased pursuant to
the Repurchase Option by delivery of, in the case of the Investor, a check
payable to the holder of Executive Units, and in the case of the Company or the
General Partner (i) a check payable to the holder of such Executive Units, (ii)
a note or notes payable in three equal annual installments beginning on the
first anniversary of the Termination Date and bearing interest (payable
quarterly) at a rate per annum equal to 8% or (iii) both (i) and (ii) in the
aggregate amount of the purchase price for such Units; provided, that the
--------
Company and the General Partner may only issue a note or notes to the extent
that they are prohibited by their financing agreements from using cash to pay
for the Executive's Units. Any notes issued by the Company or General Partner
pursuant to this Section 2(e) shall be subject to any restrictive covenants to
which the Company or General Partner is subject at the time of such purchase.
The Company, the General Partner and/or the Investor, as the case may be, will
receive customary representations and warranties from each seller regarding the
sale of the Executive Units, including, but not limited to, the representation
that such seller has good and marketable title to the Executive Units to be
transferred free and clear of all liens, claims and other encumbrances.
(f) Termination of Repurchase Right. The rights of the Company, the
-------------------------------
General
-4-
<PAGE>
Partner and the Investor to repurchase Executive Units pursuant to this Section
2 shall terminate upon the earlier of (i) a Sale of the Company or (ii) a Public
Offering.
3. Restrictions on Transfer. The parties hereby agree that the Executive
------------------------
Units will be subject to the restrictions on Transfer and other provisions
contained in the Securityholders Agreement and will be considered "Other
Securities" for purposes of the Securityholders Agreement.
4. Confidential Information. Executive acknowledges that the
------------------------
information, observations and data obtained by him while employed by the Company
and its Subsidiaries concerning the business or affairs of the Company, or any
of its Subsidiaries ("Confidential Information") are the property of the Company
------------------------
or such Subsidiary. Therefore, Executive agrees that he shall not disclose to
any unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's acts or omissions. Executive
shall deliver to the Company at the Termination Date, or at any other time the
Company may request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or the
business of the Company or any Subsidiary which he may then possess or have
under his control.
5. Inventions and Patents. Executive acknowledges that all inventions,
----------------------
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company or its predecessor and its Subsidiaries ("Work Product") belong to the
------------
Company or such Subsidiary. Executive shall promptly disclose such Work Product
to the Board and perform all actions reasonably requested by the Board (whether
during or after the Employment Period) to establish and confirm such ownership
(including, without limitation, executing any assignments, consents, powers of
attorney and other instruments).
6. Non-Compete, Non-Solicitation.
-----------------------------
(a) In further consideration of the Executive Units to be sold to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company and its Subsidiaries he shall become familiar, and he has
become familiar, with the Company's and its Subsidiaries' trade secrets and with
other Confidential Information concerning the Company and its predecessors and
its Subsidiaries and that his services have been and shall be of special, unique
and extraordinary value to the Company and its Subsidiaries. Therefore,
Executive agrees that, until the Termination Date and for two years thereafter
or earlier upon the date of a repurchase of Executive's Executive Units pursuant
to Section 2 hereof (the "Noncompete Period"), he shall not directly or
-----------------
indirectly own any interest in, manage, control, participate in, consult with,
render services for, or in any manner engage in any business involved in the
business of crane and other lifting equipment rentals or competing with the
businesses of the Company or its Subsidiaries, as such businesses exist or are
in process on the date of the termination of Executive's employment, within any
geographical
-5-
<PAGE>
area in which the Company or its Subsidiaries engage or plan to engage in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time before the Termination
Date or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative statements or communications about the Company
or its Subsidiaries).
7. Enforcement. If, at the time of enforcement of Section 4, 5 or 6 of
-----------
this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area.
Because Executive's services are unique and because Executive has access to
Confidential Information and Work Product, the parties hereto agree that money
damages would not be an adequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof (without posting a bond or
other security). In addition, in the event of an alleged breach or violation by
Executive of Section 6, the Noncompete Period shall be tolled until such breach
or violation has been duly cured. Executive agrees that the restrictions
contained in Section 6 are reasonable.
8. Definitions.
-----------
"Affiliate" has the meaning assigned to it in the Partnership
---------
Agreement.
"Board" means the Board of Managers of the General Partner.
-----
"Cause" means (i) the commission of a felony or a crime involving
-----
moral turpitude or the commission of any other act or omission involving
dishonesty, disloyalty or fraud, (ii) conduct tending to bring the Company or
any of its Subsidiaries into public disgrace or disrepute, (iii) failure to
perform duties as reasonably directed by the Board, (iv) gross negligence or
willful misconduct (including, but not limited to, failing to follow guidelines
as clearly outlined by the Board) with respect to the Company or any of its
Subsidiaries or (v) any breach of this Agreement.
"Common Units" has the meaning assigned to it in the Partnership
------------
Agreement and includes any equity securities issued or issuable directly or
indirectly with respect to such Common
-6-
<PAGE>
Units by way of any dividend or split or exchange or in connection with a
combination of units, recapitalization, merger, consolidation or other
reorganization.
"Executive Units" means collectively the Class A Common Units, Class
---------------
L Common Units and Percentage Interest acquired by the Executive pursuant to
Section 1. Such Units shall continue to be Executive Units in the hands of any
holder other than Executive (except for the Company, the Investor and
transferees in a Public Sale), and except as otherwise provided herein, each
such other holder of Executive Units shall succeed to all rights and obligations
attributable to Executive as a holder of Executive Units hereunder. Executive
Units shall be interests in the Company issued with respect to Executive Units
by way of any split, dividend or recapitalization.
"Fair Market Value" of each Executive Unit means the amount which each
-----------------
such unit would receive upon a complete liquidation of the Company following a
Sale of the Company at its market value as determined in good faith by the Board
and Executive. If the Board and Executive are unable to agree upon such market
value, it shall be determined in good faith by a nationally recognized
investment banking institution selected by the Board, the fees and expenses of
which will be split evenly between the Company and Executive.
"Investor" means Bain/ACR, L.L.C., a Delaware limited liability
--------
company.
"Original Value" with respect to any Executive Unit means the price
--------------
paid by Executive for such Class A Common Unit, Class L Common Unit or
Percentage Interest.
"Partnership Agreement" has the meaning set forth in the preamble.
---------------------
"Permitted Transferee" has the meaning set forth in the
--------------------
Securityholders Agreement.
"Percentage Interest" has the meaning assigned to it in the LLC
-------------------
Agreement.
"Person" shall mean an individual, a partnership, a corporation, a
------
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency, or political subdivision thereof.
"Public Offering" means an offering of the Company's (or a corporate
---------------
successor's) equity securities to the public pursuant to an effective
registration statement under the Securities Act.
"Public Sale" means any sale pursuant to a registered public offering
-----------
under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer or market
maker.
"Recapitalization Agreement" means that certain Recapitalization
--------------------------
Agreement, dated as of June 1, 1998 and amended as of July 21, 1998, by and
among the Company, the purchasers listed on the Schedule of Purchasers and the
current owners listed on the Schedule of Current Owners attached thereto.
-7-
<PAGE>
"Sale of the Company" means (i) any sale of all or substantially all
-------------------
(as defined in the Model Business Corporation Act) of the assets of the Company
and its Subsidiaries on a consolidated basis in one transaction or series of
related transactions, (ii) any sale of all or substantially all of the Common
Units in one transaction or series of related transactions, excluding any sales
of Common Units in a Public Sale or (iii) a merger or consolidation which
accomplishes one of the foregoing; provided that the transactions contemplated
-------- ----
by the Recapitalization Agreement do not constitute a Sale of the Company.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time.
"Securityholders Agreement" means that certain Securityholders
-------------------------
Agreement, dated as of the date hereof, by and among the Company and its
partners.
"Subsidiary" has the meaning assigned to it in the Partnership
----------
Agreement.
"Transfer" has the meaning assigned to it in the Securityholders
--------
Agreement.
9. Notices. Any notice provided for in this Agreement must be in writing
-------
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the Investor at the addresses indicated in the
Company's records and to the other recipients at the address indicated below:
Notices to Executive:
--------------------
Anthony Crane Rental
4545 West Van Buren
Phoenix, AZ 85043
Attn: Albert C. Bove
Notices to the Company:
----------------------
Anthony Crane Rental Holdings, L.P.
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attn: Paul Edgerley
Andrew Balson
Paige Daly
with a copy to:
--------------
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: James L. Learner
-8-
<PAGE>
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
10. General Provisions.
------------------
(a) Transfers in Violation of Agreement. Any Transfer or attempted
-----------------------------------
Transfer of any Executive Units in violation of any provision of this Agreement
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Executive Units as the owner of such
Executive Units for any purpose.
(b) Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein, this
----------------------
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the General Partner, the Investor and their respective
successors and assigns (including subsequent holders of Executive Units);
provided that the rights and obligations of Executive under this Agreement shall
- -------- ----
not be assignable except in connection with a permitted Transfer of Executive
Units hereunder.
(f) Arbitration. Any controversy, dispute or claim arising out of or
-----------
relating in any way to this Agreement that cannot be resolved by negotiation
between the Company and Executive shall be settled by arbitration in accordance
with the terms and provisions of Section 8.02 of the Recapitalization Agreement.
(g) Choice of Law. The partnership law of the Commonwealth of
-------------
Pennsylvania shall govern all questions concerning the relative rights of the
Company and its partners. The limited liability company law of the State of
Delaware shall govern all questions concerning the relative rights of the
General Partner and its members. All other issues and questions concerning
-9-
<PAGE>
the construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania.
(h) Remedies. Each of the parties to this Agreement (including the
--------
Investor) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney's
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement.
(i) Amendment and Waiver. The provisions of this Agreement may be
--------------------
amended and waived only with the prior written consent of the Company, the
General Partner and Executive. The provisions of Section 2 may be amended and
waived only with the prior written consent of the Investor.
(j) Third-Party Beneficiaries. The parties hereto acknowledge and
-------------------------
agree that the Investors are third party beneficiaries of this Agreement. This
Agreement will inure to the benefit of and be enforceable by the Investor and
its successors and assigns.
* * * *
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Purchase Agreement on the date first written above.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Andrew B. Balson
--------------------------------------
Its: Secretary
--------------------------------------
ACR MANAGEMENT, L.L.C.
By: /s/ Andrew B. Balson
--------------------------------------
Its: Secretary
--------------------------------------
/s/ Albert C. Bove
-------------------------------------------
Albert C. Bove
<PAGE>
EXHIBIT 10.18
[EXECUTION COPY]
ANTHONY CRANE RENTAL HOLDINGS, L.P.
EXECUTIVE PURCHASE AGREEMENT
----------------------------
THIS EXECUTIVE PURCHASE AGREEMENT (this "Agreement") is made as of
---------
July 22, 1998, by and between Anthony Crane Rental Holdings, L.P., a
Pennsylvania limited partnership (the "Company"), ACR Management, L.L.C., a
-------
Delaware limited liability company (the "General Partner") and William B. Kania
---------------
("Executive"). Any capitalized terms used herein and not otherwise defined
---------
shall have the meanings assigned to them in Section 5 hereof.
WHEREAS, reference is made to the Amended and Restated Limited
Partnership Agreement, dated as of July 22, 1998, by and among the Company and
its partners (the "Partnership Agreement");
---------------------
WHEREAS, reference is made to the Limited Liability Company Agreement,
dated as of July 22, 1998, by and among the General Partner and its members (the
"LLC Agreement"); and
-------------
WHEREAS, the Company and Executive desire to enter into this Agreement
to provide for the sale to Executive by the Company of 15,497.92 of the
Company's Class A Common Units (the "Class A Common Units"); 1,721.99 of the
--------------------
Company's Class L Common Units (the "Class L Common Units"); and a 0.39%
--------------------
Percentage Interest in the General Partner the (the "Percentage Interest", and
-------------------
together with the Class A Common Units and Class L Common Units, the "Executive
---------
Units")
- -----
NOW THEREFORE, in consideration for the premises contained herein and
the mutual obligations of the parties hereto, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive hereto agree as
follows:
1. Purchase and Sale of Executive Units.
------------------------------------
(a) Upon execution of this Agreement, Executive shall purchase, and
the Company shall sell, 15,497.92 Class A Common Units for an aggregate purchase
price of $15,497.92 and 1,721.99 Class L Common Units for an aggregate purchase
price of $139,481.26 and Executive shall purchase, and the General Partner shall
sell, the Percentage Interest for an aggregate purchase price of $5,020.82. The
Company shall deliver to Executive an executed copy of the Partnership Agreement
indicating Executive's ownership of such Class A Common Units and Class L Common
Units and the General Partner shall deliver to Executive an executed copy of the
LLC Agreement indicating Executive's ownership of the Percentage Interest.
(b) Representations and Warranties by Executive. In connection with
-------------------------------------------
the purchase and sale of the Executive Units hereunder, Executive represents and
warrants to the Company and the General Partner that:
<PAGE>
(i) The Executive Units to be acquired by Executive pursuant
to this Agreement shall be acquired for Executive's own account and not
with a view to or intention of distribution thereof in violation of the
Securities Act, or any applicable state securities laws, and the Executive
Units shall not be disposed of in contravention of the Securities Act or
any applicable state securities laws.
(ii) Executive is sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in the Executive
Units.
(iii) Executive is able to bear the economic risk of his
investment in the Executive Units for an indefinite period of time because
the Executive Units have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
Executive Units and has had full access to such other information
concerning the Company as he has requested. Executive has also reviewed, or
has had an opportunity to review, the following documents: (A) the
Partnership Agreement; (B) the LLC Agreement; (C) the loan agreements,
notes and related documents with the senior and subordinated lenders of the
Company and its Subsidiaries; (D) the Securityholders Agreement and (E) the
Company's audited and unaudited financial statements.
(v) The execution, delivery and performance of this Agreement
by Executive do not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound and upon the
execution and delivery of this Agreement by the Company and the General
Partner, this Agreement shall be the legal, valid and binding obligation of
Executive, enforceable in accordance with its terms.
(vi) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any
person or entity other than the Company.
(vii) Executive has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and he fully
understands the terms and conditions contained herein.
2. Restrictions on Transfer. The parties hereby agree that the
------------------------
Executive Units will be subject to the restrictions on Transfer and other
provisions contained in the Securityholders Agreement and will be considered
"Other Securities" for purposes of the Securityholders Agreement.
3. Confidential Information. Executive acknowledges that the
------------------------
information, observations and data obtained by him concerning the business or
affairs of the Company, or any of its Subsidiaries ("Confidential Information")
------------------------
are the property of the Company or such Subsidiary.
-2-
<PAGE>
Therefore, Executive agrees that he shall not disclose to any unauthorized
person or use for his own purposes any Confidential Information without the
prior written consent of the Board, unless and to the extent that the
aforementioned matters become generally known to and available for use by the
public other than as a result of Executive's acts or omissions. Executive shall
deliver to the Company, or at any time the Company may request, all memoranda,
notes, plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential Information
or the business of the Company or any Subsidiary which he may then possess or
have under his control.
4. Enforcement. Because Executive has access to Confidential
-----------
Information, the parties hereto agree that money damages would not be an
adequate remedy for any breach of this Agreement. Therefore, in the event a
breach or threatened breach of this Agreement, the Company or its successors or
assigns may, in addition to other rights and remedies existing in their favor,
apply to any court of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce, or prevent any violations of,
the provisions hereof (without posting a bond or other security).
5. Definitions.
-----------
"Affiliate" has the meaning assigned to it in the Partnership
---------
Agreement.
"Board" means the Board of Managers of the General Partner.
-----
"Common Units" has the meaning assigned to it in the Partnership
------------
Agreement and includes any equity securities issued or issuable directly or
indirectly with respect to such Common Units by way of any dividend or split or
exchange or in connection with a combination of units, recapitalization, merger,
consolidation or other reorganization.
"Executive Units" means collectively the Class A Common Units, Class
---------------
L Common Units and Percentage Interest acquired by the Executive pursuant to
Section 1. Such Units shall continue to be Executive Units in the hands of any
holder other than Executive (except for the Company, the Investor and
transferees in a Public Sale), and except as otherwise provided herein, each
such other holder of Executive Units shall succeed to all rights and obligations
attributable to Executive as a holder of Executive Units hereunder. Executive
Units shall include interests in the Company and the General Partner issued with
respect to Executive Units by way of any split, dividend or recapitalization.
"Partnership Agreement" has the meaning set forth in the preamble.
---------------------
"Permitted Transferee" has the meaning set forth in the
--------------------
Securityholders Agreement.
"Percentage Interest" has the meaning assigned to it in the LLC
-------------------
Agreement.
"Person" shall mean an individual, a partnership, a corporation, a
------
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency, or political subdivision thereof.
-3-
<PAGE>
"Recapitalization Agreement" means that certain Recapitalization
--------------------------
Agreement, dated as of June 1, 1998 and amended as of July 22, 1998, by and
among the Company, the purchasers listed on the Schedule of Purchasers and the
current owners listed on the Schedule of Current Owners attached thereto.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time.
"Securityholders Agreement" means that certain Securityholders
-------------------------
Agreement, dated as of the date hereof, by and among the Company and its
partners.
"Subsidiary" has the meaning assigned to it in the Partnership
----------
Agreement.
"Transfer" has the meaning assigned to it in the Securityholders
--------
Agreement.
6. Notices. Any notice provided for in this Agreement must be in
-------
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the Company, the General Partner and
Executive at the addresses indicated below:
Notices to Executive:
--------------------
W.B. Kania & Associates
71 North Mount Vernon Avenue
Uniontown, PA 15401
Attn: William B. Kania
Notices to the Company or the General Partner:
---------------------------------------------
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attn: Paul Edgerley
Andrew Balson
Paige Daly
with a copy to:
--------------
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: James L. Learner
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
-4-
<PAGE>
7. General Provisions.
------------------
(a) Transfers in Violation of Agreement. Any Transfer or attempted
-----------------------------------
Transfer of any Executive Units in violation of any provision of this Agreement
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Executive Units as the owner of such
Executive Units for any purpose.
(b) Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein, this
----------------------
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the General Partner and their respective successors and
assigns (including subsequent holders of Executive Units); provided that the
-------- ----
rights and obligations of Executive under this Agreement shall not be assignable
except in connection with a permitted Transfer of Executive Units hereunder.
(f) Arbitration. Any controversy, dispute or claim arising out of or
-----------
relating in any way to this Agreement that cannot be resolved by negotiation
between the Company and Executive shall be settled by arbitration in accordance
with the terms and provisions of Section 8.02 of the Recapitalization Agreement.
(g) Choice of Law. The partnership law of the Commonwealth of
-------------
Pennsylvania shall govern all questions concerning the relative rights of the
Company and its partners. The limited liability company law of the State of
Delaware shall govern all questions concerning the relative rights of the
General Partner and its members. All other issues and questions
concerning the construction, validity, enforcement and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the Commonwealth of Pennsylvania or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the Commonwealth of Pennsylvania.
-5-
<PAGE>
(h) Remedies. Each of the parties to this Agreement (including the
--------
Investor) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney's
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement.
(i) Amendment and Waiver. The provisions of this Agreement may be
--------------------
amended and waived only with the prior written consent of the Company, the
General Partner and Executive.
(j) Third-Party Beneficiaries. The parties hereto acknowledge and
-------------------------
agree that the Investors are third party beneficiaries of this Agreement. This
Agreement will inure to the benefit of and be enforceable by the Investor and
its successors and assigns.
* * * *
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Purchase Agreement on the date first written above.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Andrew B. Balson
-------------------------------------
Its: Secretary
-------------------------------------
ACR MANAGEMENT, L.L.C.
By: /s/ Andrew B. Balson
-------------------------------------
Its: Secretary
-------------------------------------
/s/ William B. Kania
----------------------------------------
William B. Kania
<PAGE>
EXHIBIT 10.19
LIABILITY AGREEMENT
ANTHONY CRANE RENTAL, L.P.
AND
ANTHONY CRANE CAPITAL CORPORATION
THIS LIABILITY AGREEMENT (this "Agreement") is made as of July 15, 1998, by
and among Anthony Crane Rental, L.P., a Pennsylvania limited partnership
("ACRLP"), and Anthony Crane Capital Corporation, a Delaware corporation ("ACR
CAPITAL CORPORATION").
W I T N E S S E T H:
WHEREAS, ACRLP is a Pennsylvania limited partnership; and
WHEREAS, ACR CAPITAL CORPORATION is a Delaware corporation which is wholly
owned by ACRLP and which owns only a nominal amount of assets; and
WHEREAS, ACRLP and ACR CAPITAL CORPORATION are issuing, jointly and
severally, $155,000,000 of Senior Notes (the "Senior Notes"), with all of the
proceeds of such Senior Notes being received by ACRLP; and
WHEREAS, ACRLP intends to borrow certain funds pursuant to a senior secured
credit facility with a borrowing capacity of $325,000,000 (the "Senior Secured
Credit Facility"); and
WHEREAS, the parties to this Agreement desire to set forth in writing their
agreement as to the ultimate liability between them for the repayment of such
Senior Notes, the Senior Secured Credit Facility and any other liabilities which
were incurred for the benefit of ACRLP, whether or not incurred jointly with ACR
Capital Corporation (the "Other Liabilities").
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
representations, warranties, conditions and agreements set forth herein and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. When used in this Agreement, any amendments hereto or
any exhibit or schedule attached hereto, the following terms shall have the
meanings specified:
<PAGE>
"Agreement" shall mean this Liability Agreement, as the same may be
amended or supplemented from time to time.
"ACRLP" shall mean Anthony Crane Rental, L.P., a Pennsylvania limited
partnership.
"ACR CAPITAL CORPORATION" shall mean Anthony Crane Capital
Corporation, a Delaware corporation.
"Person" shall mean any natural person, partnership, corporation,
association or other legal entity.
1.2. SINGULAR/PLURAL; GENDER. Where the context so requires or permits,
the use of the singular form includes the plural, and use of the plural form
includes the singular, and the use of any gender includes any and all genders.
ARTICLE II
LIABILITY AGREEMENTS
2.1. AGREEMENT AS TO ULTIMATE LIABILITY. The parties to this Agreement
hereby acknowledge that the benefits from the proceeds of the issuance of the
Senior Notes, the Senior Secured Credit Facility and the Other Liabilities will
be received exclusively by ACRLP, and as such, ACRLP shall be ultimately and
fully liable for the repayment of the Senior Notes, the Senior Secured Credit
Facility and the Other Liabilities without any right of contribution from, or
other claim of indemnification against, ACR CAPITAL CORPORATION.
2.1. ACR CAPITAL CORPORATION RIGHTS. ACR CAPITAL CORPORATION shall be
entitled to recover from ACRLP any amounts which ACR Capital Corporation is
required to pay with respect to the Senior Notes, the Senior Secured Credit
Facility and the Other Liabilities and ACRLP shall indemnify and hold harmless
ACR CAPITAL CORPORATION with respect to all such amounts, including any costs of
collection of such amounts incurred by ACR CAPITAL CORPORATION.
<PAGE>
2.2 ASSETS OF ACR CAPITAL CORPORATION. ACR CAPITAL CORPORATION has only
nominal assets. If any assets should be titled in the name of ACR CAPITAL
CORPORATION during the term of either the Senior Notes or the Senior Secured
Credit Facility, the parties to this Agreement hereby agree that such assets are
to be treated as owned by ACRLP, with ACR CAPITAL CORPORATION holding title to
such assets in trust for the exclusive benefit of ACRLP.
ARTICLE III
ADDITIONAL PROVISIONS
3.1. DOCUMENTATION. The parties to this Agreement shall upon request
execute and deliver all documents and take all reasonable actions to fully
effectuate and will work together to accomplish the terms of this Agreement as
efficiently and as expediently as possible.
ARTICLE IV
MISCELLANEOUS
4.1. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions of the parties, whether oral or written; and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein. No amendment, supplement, modification, waiver or termina tion of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed
or shall con stitute a waiver of any other provision of this Agreement, whether
or not similar, unless otherwise expressly provided.
4.2. ASSIGNMENT. This Agreement shall not be assigned by any party without
the prior written consent of the other party.
4.3. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
4.4. COUNTERPARTS; HEADINGS. This Agreement may be executed in several
counterparts or with counterpart signature pages, each of which shall be deemed
an original, but such counterparts shall together constitute but one and the
same Agreement. The Section headings in this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
<PAGE>
4.5. SEVERABILITY. If any provision, clause, or part of this Agreement or
the application thereof under certain circumstances is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
4.6. NO RELIANCE. Except for any assignees permitted by Section 4.2 of
this Agreement: (a) no third party is entitled to rely on any of the agreements
of the parties contained in this Agreement; and (b) the parties assume no
liability to any third party because of any reliance on the agreements of the
parties contained in this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and sealed as of the day and year first above written.
ANTHONY CRANE RENTAL, L.P.
By ANTHONY CRANE RENTAL, INC.
Its general partner
By: /s/ David W. Mahokey
------------------------------------------
David W. Mahokey, Chief Financial Officer
ANTHONY CRANE CAPITAL CORPORATION
By:______________________________________________________
Title: ___________________________________________________
<PAGE>
EXHIBIT 10.20
LIABILITY AGREEMENT
ANTHONY CRANE RENTAL HOLDINGS, L.P.
AND
ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
THIS LIABILITY AGREEMENT (this "Agreement") is made as of July 15, 1998, by
and among Anthony Crane Rental Holdings, L.P., a Pennsylvania limited
partnership ("HOLDINGS"), and Anthony Crane Holdings Capital Corporation, a
Delaware corporation ("ACR HOLDINGS CAPITAL CORPORATION").
W I T N E S S E T H:
WHEREAS, HOLDINGS is a Pennsylvania limited partnership; and
WHEREAS, ACR HOLDINGS CAPITAL CORPORATION is a Delaware corporation which
is wholly owned by HOLDINGS and which owns only a nominal amount of assets; and
WHEREAS, HOLDINGS and ACR HOLDINGS CAPITAL CORPORATION are issuing, jointly
and severally, $25,000,000 of discount debentures (the "Discount Debentures"),
with all of the proceeds of such Discount Debentures being received by HOLDINGS;
and
WHEREAS, the parties to this Agreement desire to set forth in writing their
agreement as to the ultimate liability between them for the repayment of the
Discount Debentures and any other liabilities which were incurred for the
benefit of HOLDINGS or any of the affiliates of HOLDINGS other than ACR HOLDINGS
CAPITAL CORPORATION, whether or not incurred jointly with ACR HOLDINGS CAPITAL
CORPORATION (the "Other Liabilities").
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
representations, warranties, conditions and agreements set forth herein and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. When used in this Agreement, any amendments hereto or
any exhibit or schedule attached hereto, the following terms shall have the
meanings specified:
"Agreement" shall mean this Liability Agreement, as the same may be
amended or supplemented from time to time.
<PAGE>
"HOLDINGS" shall mean Anthony Crane Rental Holdings, L.P., a
Pennsylvania limited partnership.
"ACR HOLDINGS CAPITAL CORPORATION" shall mean Anthony Crane Holdings
Capital Corporation, a Delaware corporation.
"Person" shall mean any natural person, partnership, corporation,
association or other legal entity.
1.2. SINGULAR/PLURAL; GENDER. Where the context so requires or permits,
the use of the singular form includes the plural, and use of the plural form
includes the singu lar, and the use of any gender includes any and all genders.
ARTICLE II
LIABILITY AGREEMENTS
2.1. AGREEMENT AS TO ULTIMATE LIABILITY. The parties to this Agreement
hereby acknowledge that the benefits from the proceeds of the issuance of the
Discount Debentures and the Other Liabilities will be received exclusively by
HOLDINGS, and as such, HOLDINGS shall be ultimately and fully liable for the
repayment of the Discount Debentures and the Other Liabilities, without any
right of contribution from, or other claim of indemnification against, ACR
HOLDINGS CAPITAL CORPORATION.
2.1. ACR HOLDINGS CAPITAL CORPORATION RIGHTS. ACR HOLDINGS CAPITAL
CORPORATION shall be entitled to recover from HOLDINGS any amounts which ACR
HOLDINGS CAPITAL CORPORATION is required to pay with respect to the Discount
Debentures and the Other Liabilities, and HOLDINGS shall indemnify and hold
harmless ACR HOLDINGS CAPITAL CORPORATION with respect to all such amounts,
including any costs of collection of such amounts incurred by ACR HOLDINGS
CAPITAL CORPORATION.
2.2 ASSETS OF ACR HOLDINGS CAPITAL CORPORATION. ACR HOLDINGS CAPITAL
CORPORATION has only nominal assets. If any assets should be titled in the name
of ACR HOLDINGS CAPITAL CORPORATION, the parties to this Agreement hereby agree
that such assets are to be treated as owned by HOLDINGS, with ACR HOLDINGS
CAPITAL CORPORATION holding title to such asset in trust for the exclusive
benefit of HOLDINGS.
2
<PAGE>
ARTICLE III
ADDITIONAL PROVISIONS
3.1. DOCUMENTATION. The parties to this Agreement shall upon request
execute and deliver all documents and take all reasonable actions to fully
effectuate and will work together to accomplish the terms of this Agreement as
efficiently and as expediently as possible.
ARTICLE IV
MISCELLANEOUS
4.1. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions of the parties, whether oral or written; and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein. No amendment, supplement, modification, waiver or termi nation of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision of this Agreement, whether
or not similar, unless otherwise expressly provided.
4.2. ASSIGNMENT. This Agreement shall not be assigned by any party without
the prior written consent of the other party.
4.3. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
4.4. COUNTERPARTS; HEADINGS. This Agreement may be executed in several
counterparts or with counterpart signature pages, each of which shall be deemed
an origi nal, but such counterparts shall together constitute but one and the
same Agreement. The Section headings in this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
4.5. SEVERABILITY. If any provision, clause, or part of this Agreement or
the application thereof under certain circumstances is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
4.6. NO RELIANCE. Except for any assignees permitted by Section 4.2 of
this Agreement: (a) no third party is entitled to rely on any of the agreements
of the parties
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<PAGE>
contained in this Agreement; and (b) the parties assume no liability to any
third party because of any reliance on the agreements of the parties contained
in this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and sealed as of the day and year first above written.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By ACR Management, L.L.C.
Its general partner
By:_______________________________
Title: _____________________________
ANTHONY CRANE HOLDINGS CAPITAL CORPORATION
By:_______________________________
Title: _____________________________
4
<PAGE>
EXHIBIT 10.21
AGREEMENT
Between
-------
HESS OIL VIRGIN ISLANDS CORP.
----------------------------
(HOVIC)
-----
And
ANTHONY CRANE INTERNATIONAL. L. P.
----------------------------------
(CONTRACTOR)
For
CONSTRUCTION EQUIPMENT OPERATION AND MAINTENANCE SERVICES
---------------------------------------------------------
AT
ST. CROIX, U.S. VIRGIN ISLANDS
CONTRACT NUMBER CSX-0444
------------------------
<PAGE>
CONSTRUCTION EQUIPMENT OPERATION AND MAINTENANCE SERVICES
---------------------------------------------------------
AGREEMENT
---------
Agreement dated August 1, 1996 between HESS OIL VIRGIN ISLANDS CORP., a
U.S.Virgin Islands corporation, having an office at P.O. Box 127, Kingshill, St.
Croix, U.S. VirginIslands, 08850 (herein "HOVIC"), and ANTHONY CRANE
INTERNATIONAL, L. P., a Pennsylvania limited partnership, having an office at
P.O. Box 5985, Sunny Isle, St. Croix, U.S.Virgin Islands. 00823 (herein
"CONTRACTOR").
RECITALS:
A. HOVIC operates and maintains a refinery at St. Croix, U.S. Virgin
Islands.
B. HOVIC wishes to engage CONTRACTOR to provide construction equipment
operation and maintenance services as described in this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1.0 DEFINITION OF TERMS
-------------------
The words and terms in this Agreement will have the meanings ascribed to
them in this Article 1.0 whenever they appear in this Agreement.
1.1 Construction Aids means all materials, supplies and temporary
facilities and such other items as are required for the performance of the
services, but which are not intended to become a permanent part of the
Facilities.
1.2 Equipment means all material, supplies, and rigging equipment and
accessories used in the performance of the Services.
1.3 Construction Equipment means all cranes, forklifts, manlifts,
compressors, loaders, dozers, etc. used in the performance of the Services.
1.4 Facilities means the operating units and associated operations located
at the refinery site of HOVIC at St. Croix, U.S. Virgin Islands.
1.5 Job Site means the real property on which the Facilities are being
maintained at St. Croix, U.S. Virgin Islands.
1.6 Services means collectively all the services and activities specified
in this Agreement relating to construction equipment operation and maintenance,
which may include procurement, sale, expediting and inspection, labor,
materials, supervision and management to be performed or
1
<PAGE>
provided by CONTRACTOR. Requests for Services may be given by HOVIC to
CONTRACTOR either orally or in writing.
1.7 Subcontractor means any third party supplying contract services to
CONTRACTOR, at the Facilities.
1.8 Vendor means any third party supplying any Equipment or Construction
Aids to CONTRACTOR with or without the supervision of installation at the
Facilities, but without installation labor at the Facilities.
2.0 SERVICES BY CONTRACTOR
----------------------
CONTRACTOR, as required by HOVIC. will in accordance with Schedule A and
this
Agreement:
2.1 Furnish required maintenance services and / or construction equipment
management. operation. supervision and craft personnel.
2.2 Provide planning. scheduling and cost control required to control the
assigned Services and personnel.
2.3 Supervise CONTRACTOR furnished subcontractors.
2.4 Provide management services in connection with the performance of
assigned services.
2.5 Arrange for administration of CONTRACTOR's personnel.
2.6 Obtain and maintain a business license in the U.S. Virgin Islands in
CONTRACTOR's name for performance of the Services.
2.7 Obtain necessary work permits as required by HOVIC Safety, Operations
or other applicable Department.
2.8 Administer pre-employment tests to all CONTRACTOR's employees who will
be performing work on HOVIC's premises to ensure that only those who are
qualified are hired. The tests will be designed to measure the level of skills
possessed by each applicant as they relate to the requirements of the specific
job functions to be performed, and will include standard tests of craft skills,
including comprehension of written instructions. Individuals who fail to achieve
acceptable scores on such tests will not be employed by CONTRACTOR on HOVIC's
premises. The testing program will be directed by a professional with specific
knowledge of the job requirements. To ensure compliance with this provision,
CONTRACTOR will make the test scores (but not the names) of successful
applicants available for review by HOVIC upon request. With the exception
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<PAGE>
of this review, CONTRACTOR and HOVIC will maintain the tests and results on a
confidential basis, and will not disclose them except as required by law.
3.0 SERVICES BY HOVIC
-----------------
HOVIC will furnish or perform in accordance with Schedule B the following
in connection with the Services, without cost to CONTRACTOR:
3.1 Provide all construction equipment and maintenance facilities required
for the performance of the assigned Services.
3.2 Procure all necessary permits, licenses and easements required for
performance of the Services, other than the permits and licenses to be obtained
by CONTRACTOR under Sections 2.6 and 2.7.
3.3 Furnish an individual(s) to represent HOVIC hereunder, but who will
not control or supervise CONTRACTOR's day-to-day work since CONTRACTOR is a
qualified independent contractor.
3.4 Provide security in accordance with 110 VIC Security Department
policies.
4.0 SPECIAL CONDITIONS
------------------
4.1 HOVIC reserves the right to terminate this Agreement at any time in
its sole and unlimited discretion, conditioned on HOVIC providing ninety (90)
day written notice of the effective date of termination, without further cost or
obligation beyond what is specifically provided for in Articles 5 and 17.
4.2 There is no guarantee, express or implied, for any minimum amount of
work or quantity under this Agreement.
4.3 CONTRACTOR acknowledges that the Services will be performed at an
operating facility and will perform all Services in such a fashion as to
minimize interference with HOVIC's operation of the facility.
4.4 CONTRACTOR will schedule work in conjunction with HOVIC's
representative to avoid any interference with HOVIC's use of its ship berth, if
any. When ships or barges are scheduled, HOVIC will advise CONTRACTOR eight (8)
hours prior to the scheduled arrival and CONTRACTOR will schedule its work, at
no extra cost to HOVIC, so as not to interfere with HOVIC's operation.
4.5 If HOVIC is unable to obtain all necessary governmental
authorizations, however designated, which are required by appropriate
governmental authorities for the Services, the work
3
<PAGE>
assignment will be canceled. HOVIC will not be held liable for any charges
resulting from the necessity for cancellation of the work, other than those
specified in Articles 5 and 17.
4.6 Unless otherwise agreed herein to be provided by CONTRACTOR, 1-IOVIC
will provide necessary field personnel to direct and instruct those individuals
participating in specific crane lifting operations or other equipment
operations. CONTRACTOR will direct its operators to comply with directions and
instructions provided by HOVIC field personnel to the extent that such
directions and instructions are in compliance with OSHA standards or other
regulatory law. CONTRACTOR will be bound by all communications given by HOVIC to
CONTRACTOR's supervisory personnel if the communication relates to the portion
of any work being directly supervised by that supervisory personnel. HOVIC shall
provide CONTRACTOR a list of the HOVIC supervisors that are authorized to commit
to CONTRACTOR service. CONTRACTOR shall provide a list of management personnel
who are eligible to receive commitments from HOVIC. All communications made by
HOVIC or CONTRACTOR personnel involving major issues shall be followed with a
written notice to the other party detailing the substance of that communication.
4.7 HOVIC shall make available to CONTRACTOR all drawings, manufacturer's
specifications or other documents specifying weights and dimensions for
CONTRACTOR's review and verification. CONTRACTOR shall conduct work as directed,
but is not required to verify weights and dimensions of lift objects. CONTRACTOR
will endeavor to use professional judgment in proceeding with all lifts, and
will notify HOVIC of concerns with weights and dimensions provided by HOVIC if
such concerns exist. CONTRACTOR has the final authority and decision in
proceeding with all lifts, and will notify HOVIC in writing immediately of any
lift that CONTRACTOR refused to complete due to safety or other concerns.
4.8 The term of this agreement shall be five (5) years ending on August
12, 2001. During this period it is agreed that the rates for types / sizes of
equipment listed in Schedule C, Attachment IA will not change. Additional rates
for equipment types not listed on Schedule C, Attachment IA will be negotiated
between the parties as required.
5.0 COMPENSATION
------------
HOVIC will pay CONTRACTOR as set forth in Article 6.0, as full and complete
compensation for the Services, the sum of all charges and reimbursable costs
incurred in the performance of the Services, as set forth in Sections 5.1, 5.2,
5.3, 5.4, 5.5 and 5.6;
5.1 Monthly rates for operation and maintenance of construction equipment.
5.1.1 Monthly Rates for Hydraulic and Conventional Cranes as set
forth in Schedule C, Attachment lA. This rate is an all inclusive rate and
includes, for accounting purposes, maintenance of non-operated equipment as set
forth in Article 5.1.2.
5.1.2 Schedule of Non-Operated Equipment leased by HOVIC and
maintained by
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<PAGE>
CONTRACTOR as set forth in Schedule C, Attachment lB. The maintenance charges
for non-operated equipment are included in the Hydraulic and Conventional Crane
rates as set forth on Article 5.1.1.
5.2 Hourly Rates for personnel associated with the services provided by
CONTRACTOR in the Auto / Truck Garage. Such personnel will be referred hereafter
as Time & Material personnel.
Salaried Personnel
------------------
5.2.1 The actual salaries and wages of managerial and supervisory
personnel; assigned to perform the Services in St. Croix, U.S. Virgin Islands,
all as set forth in Schedule C, Attachment 2, plus;
(i) Travel, relocation, housing/living and local
transportation in St. Croix in accordance with Exhibits 4. 5 and 6.
Hourly - Administration/Technical
---------------------------------
5.2.2 The wages of all technical and administrative job site
personnel other than those set forth in Subsections 5.2.1 and 5.2.3 as more
particularly described in Schedule C, Attachment 2, plus;
(i) Travel, relocation, housing/living and local
transportation in St. Croix in accordance with Exhibits 4, 5 and 6.
(ii) Overtime at time and one-half for work over 8 hours per
day or 40 hours per week and other criteria in accordance with the U.S. Virgin
Islands law.
Hourly - Craft
--------------
5.2.3 The wages of all craft Job Site personnel other than those set
forth in subsections 5.2.1 and 5.2.2 as more particularly described in attached
Schedule C, Attachment 2, plus;
(i) Overtime at time and one-half for work over 8 hours per
day or 40 hours per week and other criteria in accordance with the U.S. Virgin
Islands law.
(ii) On-site time required to be informed of HOVIC's
requirements for physicals, safety and security.
5.2.4 An overhead and profit charge which includes the following for
all time and material personnel:
a. Insurance costs
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b. Home office and on site administrative expense
c. Legal and professional fees
d. Interviewing and recruiting costs
e. Medical services and substance abuse testing
f. Training and job skill testing
g. Profit
5.2.5 FICA, FUTA, VIESA, Worker's Compensation (in St. Croix) charges
at actual cost; in accordance with all applicable laws, at actual cost, for the
personnel set forth in Subsections 5.2.1, 5.2.2 and 5.2.3.
5.3 Miscellaneous Terms and Conditions in accordance with Schedule C,
Attachment 3.
5.4 Cost Reduction Incentive Program in accordance with Schedule C,
Attachment 4.
5.5 Subcontractor costs in accordance with Schedule C, Attachment 5.
5.6 HOVIC shall reimburse CONTRACTOR for Virgin Islands Gross Receipt
Taxes. HOVIC will not reimburse CONTRACTOR for any other taxes including sales
and use taxes, transaction taxes and any other taxes, levied, assessed or
imposed by governmental authority upon the sale, purchase, handling, storage,
installation or other use of any materials, equipment, supplies or services
acquired for or used in the performance of this Agreement including income tax
or any other taxes based on net profit.
6.0 TERMS OF PAYMENT
----------------
Reimbursable Cost and Charges
-----------------------------
6.1 At the end of each week, CONTRACTOR will tender to HOVIC an invoice of
those costs and charges for all costs set forth in Subsections 5.2.1, 5.2.2 and
5.2.3, including those charges set forth in Subsections 5.2.4 and 5.2.5 and
applicable items from Sections 5.3, payable under this Agreement and which have
been incurred by CONTRACTOR during the preceding week. For all other
reimbursable costs and charges, once each month or as agreed by HOVIC Accounting
and CONTRACTOR, CONTRACTOR will tender to HOVIC an invoice of costs and charges
reimbursable under this Agreement that have been incurred by CONTRACTOR during
the preceding period.
The invoice will be sent or delivered to the following HOVIC address:
HESS OIL VIRGIN ISLANDS CORP.
P.O. Box 127, Kingshill
St. Croix, USVI 00850-0127
Attn: Contractor Audit
6
<PAGE>
6.2 Payment by HOVIC will not release CONTRACTOR from responsibility for
any Services which are subsequently found to have been done improperly within
ninety (90) days of their completion, and written notice of which is furnished
to CONTRACTOR by HOVIC.
6.3 CONTRACTOR will show any applicable Sales or Use or Gross Receipt
Taxes separately on all invoices submitted to HOVIC for payment.
6.4 As a condition to any payment, HOVIC may require a release from any
subcontractor or material supplier whose goods or services are included in any
invoice submitted by CONTRACTOR, such release to be in form reasonably
satisfactory to HOVIC.
6.5 HOVIC may withhold payment in whole or in part without becoming liable
to CONTRACTOR if HOVIC has reasonable grounds to believe that CONTRACTOR is or
may be liable to HOVIC or any subcontractor or vendor, has or may default, or
that liens, garnishments or attachments have or may be asserted. Such
withholding will be to the extent and for so long as is reasonably necessary in
HOVIC's sole judgment. To the extent such payments are withheld not in
accordance with this paragraph but not in willful bad faith, CONTRACTOR's sole
remedy will be to recover such amounts together with interest at the prime rate
at New York Banks during such withholding and it will meanwhile continue its
performance.
6.6 HOVIC may make any payment due hereunder through the medium of a check
made payable to the joint order of CONTRACTOR and such of CONTRACTOR's workers,
material suppliers, subcontractors, vendors, creditors or other claimants, whose
claims against CONTRACTOR are, in HOVIC's reasonable determination, in jeopardy
of non-payment.
6.7 Invoicing applicable to operation and maintenance charges as set forth
in Article 5.1- On the first business day of each month, CONTRACTOR will provide
an invoice to HOVIC detailing the monthly minimum charges. If invoices are paid
in full by HOVIC by the 10th calendar day after receipt, a 1% discount will
apply to the monthly minimums. If HOVIC does not pay the monthly minimums by the
10th workday, then the balance is due by the end of the month. At the end of
each month, CONTRACTOR will render an invoice for the additional charges and
fee's, supported by appropriate documentation, which are above the monthly
minimum rates. HOVIC shall pay approved amounts of CONTRACTOR's additional
charges with in 15 calendar days after receipt. If any portion of the additional
charges is questioned by HOVIC, 1-IOVIC will pay the remaining portion.
6.8 Invoicing applicable to Time and Material Charges as set forth in
Article 5.2 - In accordance with Exhibit 7 , invoices will show CONTRACTOR's
invoice number; HOVIC's contract number, provide HOVIC's appropriate charge
numbers and, if applicable, provide the name and title of each individual
performing the Services, the man-hours involved, the hourly rates and the
extended totals. All salaries and wages will be supported with approved time
sheets. CONTRACTOR reimbursable expenses arising out of its performance for the
Services will be included on the invoice and supported as required by HOVIC.
HOVIC will pay the approved
7
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amounts of CONTRACTOR's invoices for expenses within fifteen (15) calendar days
and for labor within five (5) calendar days after HOVIC's receipt. If any
portion of CONTRACTOR's invoices is questioned by HOVIC, HOVIC will pay the
remaining portion.
7.0 ACCOUNTING AND AUDIT
--------------------
7.1 CONTRACTOR will keep full and detailed accounts and records in
accordance with its established accounting procedures.
7.2 Upon 48 hour prior written notice from HOVIC, CONTRACTOR will permit
HOVIC to have access to and review and audit its records and accounts at all
reasonable times relating to any cost reimbursable to CONTRACTOR by HOVIC under
this Agreement; exclusive, however, of any fixed overhead and profit charges.
Reviews and audits may be made within two years of submission of statements of
reimbursable costs and charges.
8.0 TIME OF PERFORMANCE
-------------------
CONTRACTOR will use its best efforts to complete each work assignment
consistent with HOVIC's requirements.
9.0 LIEN INDEMNIFICATION
--------------------
CONTRACTOR will, at its sole cost and expense, defend and indemnify HOVIC
against all claims, liens, attachments or fines asserted or assessed against
HOVIC (exclusive of personal injury claims, property damage claims, and
subrogation claims, which are covered under Article 11 hereof), as a result of
CONTRACTOR's providing of the services under this Agreement, provided HOVIC (a)
notifies CONTRACTOR promptly of any claim, lien, attachment or charge and (b)
permits CONTRACTOR to defend any such claim, lien, attachment or charge, or post
Bond.
10.0 APPROVALS
---------
The number of time and material personnel (including craft, supervision,
administration, management and technical) to be furnished by CONTRACTOR will be
subject to approval by HOVIC in accordance with manpower requisitioning
procedures established by HOVIC. This will not affect CONTRACTOR's status as an
independent contractor.
11.0 INDEMNITY: INSURANCE REQUIREMENTS
----------------------------------
11.1 Except as otherwise agreed between HOVIC and CONTRACTOR, CONTRACTOR
will indemnify and hold harmless HOVIC, its divisions, parent, subsidiaries,
directors, officers, agents, and employees, up to the gross sum of the first
$1,000,000.00 for each occurrence, against any and all claims (including
personal injury and death), demands or causes of action, and all cost, losses
liabilities, expenses and judgments incurred in connection with, responding to,
investigating,
8
<PAGE>
and defending claims, including reasonable and necessary attorney's fees and
costs of court, based upon, in connection with, resulting from or arising out of
any negligence or other fault or strict liability of CONTRACTOR, as determined
by a court of competent jurisdiction, in connection with the performance of the
services made the basis of this agreement, provided, however, that CONTRACTOR's
contractual obligation of indemnification shall not extend to the consequences
of HOVIC's negligence or other fault or to strict liability imposed upon HOVIC.
Conversely, HOVIC will indemnify and hold harmless CONTRACTOR, its divisions,
parent, subsidiaries, directors, officers, agents, and employees against any and
all claims (including personal injury and death), demands or causes of action
and all cost, losses, liabilities, expenses and judgments incurred in connection
therewith, including reasonable attorney's fees and costs of court, based upon,
in connection with, resulting from or arising out of any negligence or other
fault or strict liability of HOVIC or its subcontractors, as determined by a
court of competent jurisdiction, under this agreement; provided, however, that
HOVIC's contractual obligation of indemnification shall not extend to the
consequences of CONTRACTOR's negligence or other fault or strict liability
imposed upon CONTRACTOR.. If CONTRACTOR and HOVIC are adjudicated negligent or
are otherwise at fault or strictly liable without fault with respect to any
damage or injuries sustained, this contractual obligation of indemnity will
continue but each of CONTRACTOR and HOVIC shall indemnify the other ( the
indemnitee) only for an amount equal to the amount of the judgment awarded
and/or paid by the indemnitee to the claimant, multiplied by the percentage of
responsibility for claimant's damages adjudicated to be caused by the
indemnitor. CONTRACTOR and HOVIC will do this notwithstanding the Virgin Islands
comparative negligence statute, Title 5 V.I.C. Section 1451. It is expressly
agreed that the contractual obligations of indemnity referred to herein do not
extend to the consequences of either party's intentional torts, or to punitive
or exemplary damages. Each party's obligation for contractual comparative
indemnity as provided for herein shall survive expiration or termination of this
agreement.
11.2 Before any work is started by CONTRACTOR, CONTRACTOR will, at its
expense, maintain and require its subcontractors to maintain during the
performance of the work, insurance in form satisfactory to HOVIC with insurance
companies authorized to do business in the U.S. Virgin Islands as follows:
11.2.1 Worker's Compensation insurance covering CONTRACTOR's
obligations under all applicable laws and Employer's Liability insurance in the
amount of $100,000 per occurrence.
11.2.2 General Liability insurance, including contractual liability,
with limits of not less than $1,000,000 combined single limit, per occurrence,
bodily injury and property damage, with $2,000,000 annual aggregate.
11.2.3 CONTRACTOR's general liability insurance will specifically
extend to and include the indemnity agreement set forth in Subsection 11.1.
11.2.4 Automobile Liability insurance, with limits of not less than
$1,000,000
9
<PAGE>
combined single limit per occurrence, bodily injury and property damage. The
automobile insurance will apply to all Contractor owned, rented or leased
vehicles.
11.2.5 If any subcontractor is permitted to perform any of the
Services, CONTRACTOR will maintain protective liability insurance covering the
operations of such subcontractor in the minimum amounts as set forth in
Subsection 11.2.2.
11.2.6 CONTRACTOR will pay any contributions for unemployment
insurance and disability benefits required by the laws of the state or territory
in which the Services are being performed for the employees of CONTRACTOR, and,
upon request, CONTRACTOR will furnish evidence to HOVIC of the payment.
11.2.7 Prior to the commencement of any work, CONTRACTOR will furnish
sufficient certificates of all the insurance to be provided by CONTRACTOR to
HOVIC, which certificates will provide that the insurance will not be canceled
or changed until at least ten (30) days written notice is given to HOVIC c/o
Operation Services; Contract CSX-0444.
All polices of insurance (except worker's compensation) will
name HOVIC and HOVIC's designated representative as insureds and provide for
waiver of underwriters' rights of subrogation against HOVIC and any third party
designated by HOVIC. Insurance certificates must be identified with contract
number.
11.2.8 CONTRACTOR will furnish HOVIC with two (2) copies of a written
report on any accident occurring on or to HOVIC's property, which results in
property damage or injury, within three (3) days of any such accident.
11.3 Excess Liability Insurance will be provided by HOVIC with limits of
liability of $4,000,000 with a $4,000,000 annual aggregate.
11.4 CONTRACTOR's liability to HOVIC is limited to the extent of its
insurance coverage hereunder. Deductibles are shared proportionally between
CONTRACTOR's and HOVIC's account in accordance with comparative negligence as
provided in Article 11.1.
12.0 DISPUTES
--------
Any claim or dispute arising in connection with the prosecution of the
assigned Services under this Agreement must be presented to HOVIC's Operation
Services Manager in writing within ten (10) days after Contractor or HOVIC
obtain knowledge of the facts giving rise to the claim or dispute. The party
notified will acknowledge receipt by endorsement of a copy if requested, or with
otherwise confirm receipt in writing. All claims or disputes shall be decided in
the first instance by HOVIC's Operation Service Manager. If Contractor is
dissatisfied with the decision of the Operation Services Manager, or if the
Operations Services Manager fails to render a decision within ten (10) days from
submission of the claim or dispute, Contractor may within the following ten (10)
days
10
<PAGE>
appeal to the HOVIC's Refinery Manager. The appeal shall be in writing
and provide full information to the extent available regarding the basis for the
claim or dispute and shall be delivered to the Refinery Manager. A final
decision shall be made within ten (10) days from submission of the appeal. In
the event Contractor is dissatisfied with the final decision of HOVIC and the
parties are unable to resolve their differences through negotiation, the parties
will attempt in good faith to resolve the dispute under agreed Alternate Dispute
Resolution (ADR) procedures. ADR procedures recommended by the Center for Public
Resources, including procedures for Job Site ADR, will be considered for this
purpose. During the dispute resolution process, the parties shall continue the
performance of assigned Services as specified in this agreement.
13.0 INTELLECTUAL PROPERTY RIGHTS: CONFIDENTIALITY
---------------------------------------------
13.1 Title to all drawings, bills of material, flow diagrams,
specifications, designs, information and data prepared by CONTRACTOR hereunder
will remain the property of HOVIC.
13.2 CONTRACTOR will keep confidential (i) all drawings, specifications,
plans and other materials prepared in connection with the Services (including
copies and other materials substantially prepared therefrom); (ii) all
information relating to HOVIC's business methods and techniques, finances,
processes, apparatus and trade secrets; and (iii) all other information of a
confidential or proprietary nature. Without the written consent of HOVIC,
confidential information will not be used on other projects or disclosed to
other persons (unless pursuant to court order and provided HOVIC has received
notice of the proposed order and has had an opportunity to contest it) other
than in connection with performance of the Services. All confidential materials
must be returned to HOVIC upon completion of the Services or termination of this
Agreement.
13.3 For the purposes of Section 13.2, disclosures made to CONTRACTOR under
this Agreement which are specific, e.g., as the engineering and design practices
and techniques, equipment, products, operating conditions and catalyst for
treating specific feedstock, etc., will not be deemed to be within the foregoing
exceptions merely because they are embraced by general disclosures in the public
domain or in the possession of CONTRACTOR. In addition, any combination of
features will not be deemed to be within the foregoing exceptions merely because
individual features are in the public domain or in the possession of CONTRACTOR,
but only if the combination itself and its principle of operation are in the
public domain or in the possession of CONTRACTOR.
14.0 COMPLIANCE WITH OSHA AND JOB SITE SAFETY REGULATIONS
----------------------------------------------------
14.1 CONTRACTOR will comply, in all material respects, with all applicable
Federal OSHA, State and Territorial laws and regulations (including OSHA Hazard
Communication Standard, 29 C.F.R. (S) 1910.1200 and 051-IA Process Safety
Management Standard, 29 C.F.R. (S) 1910.119) as well as HOVIC's Procedures for
Safety, Health and Fire protection. CONTRACTOR is responsible to become
acquainted with applicable safety and health laws and regulations and HOVIC's
procedures prior to commencing work. CONTRACTOR will take all necessary
11
<PAGE>
precautions to keep the worksite free from recognized hazards that are likely to
cause injury, death, illness or damage to property.
14.2 CONTRACTOR will comply with all provisions of the attached HOVIC
Safety Guidelines and Requirements for Contractors, Exhibit 12.
15.0 COMPLIANCE WITH LAW: PERMITS AND REGULATIONS
--------------------------------------------
In the performance of the Services, CONTRACTOR will comply with and
defend and indemnify HOVIC against all claims, costs, damages and expenses
resulting from any actual or claimed violation by CONTRACTOR or its services
with any laws, rules, regulations and orders of public authority, whether
federal, state, territorial or local, including safety, building and wiring
codes, wages, unemployment compensation, worker's compensation and social
security laws; CONTRACTOR will file all reports and pay all taxes, fees and
charges required by such laws, rules, regulations or orders. CONTRACTOR
certifies compliance with the Fair Labor Standards Act of 1938, as amended.
Except as otherwise specified herein, HOVIC will secure and pay for the building
permit and all licenses and easements for permanent structures. Any engineering
or presentation from CONTRACTOR in connection with HOVIC obtaining said permits,
licenses or easements will be considered a part of CONTRACTOR's Services.
16.0 BREACH
------
16.1 The occurrence of any of the following events is a Breach of this
Agreement:
(i) any material defect in the Services provided by the
CONTRACTOR; provided that CONTRACTOR fails to correct such condition within
reasonable time after receiving notice from HOVIC of such condition.
(ii) failure after notice has been given to CONTRACTOR of any
unsafe, unsound or defective work, to begin immediately, and diligently proceed
with, steps necessary to correct such work;
(iii) failure to proceed with or complete the Services in
accordance with the Agreement;
(iv) HOVIC has reasonable grounds to believe that CONTRACTOR is
or may become bankrupt, insolvent or unable to pay its debts as they become due;
(v) CONTRACTOR fails to maintain materials, equipment and
personnel of such kinds and in such places as in HOVIC's reasonable judgment are
required for CONTRACTOR's performance hereunder;
(vi) breach of any warranty or representation of this Agreement
provided that
12
<PAGE>
CONTRACTOR fails to correct such condition within a reasonable time after
receiving notice from HOVIC of such breach;
(vii) failure to comply with any provision of this Agreement in
which HOVIC, in its reasonable judgment, deems to be material; provided that
CONTRACTOR fails to correct such condition within a reasonable time after
receiving notice from HOVIC of such failure to comply.
16.2 If any Breach occurs or HOVIC reasonably believes a Breach is
imminent, HOVIC has, in addition to all remedies available to HOVIC at law, the
remedies set forth in this Article 16. These remedies and remedies afforded to
HOVIC at law are cumulative and concurrent, and exercise of any remedy will not
prevent or limit HOVIC'S exercise of any other right or remedy.
17.0 NON-BREACH TERMINATION
----------------------
In addition to HOVIC'S right to terminate this Agreement for a Breach.
HOVIC may terminate, in whole or in part, CONTRACTOR's further performance at
any time and for any reason, by giving written notice of such termination to
CONTRACTOR. CONTRACTOR's sole remedy if this Agreement is terminated and
CONTRACTOR has not committed a Breach is to recover the total payments to be
made under Article S of this Agreement up to the date of termination, together
with all reasonable costs of demobilization as agreed by the parties.
18.0 WARRANTY
--------
CONTRACTOR warrants the Services will be performed in a competent,
workerlike and efficient manner consistent with industry standards and
practices. CONTRACTOR warrants that the maintenance performed on construction
equipment shall meet or exceed the equipment manufacturers', HOVIC, or, if
applicable, the lessor's maintenance requirements. If construction equipment is
rented or leased by HOVIC, and the CONTRACTOR fails to maintain the equipment as
per the rental company or lessor's requirements, then all penalties assessed to
HOVIC will be the responsibility of the CONTRACTOR.
19.0 INSPECTION
----------
Any inspection by HOVIC will not relieve CONTRACTOR of its obligations
under this Agreement and will not be deemed to include any control over the work
methods or details.
20.0 ASSIGNMENT AND SUBCONTRACTING
-----------------------------
This Agreement will not be assigned by either party without the written
consent of the other party, which consent shall not be unreasonably withheld,
except that it may be assigned without such consent to the successor of either
party or to a person, firm or corporation acquiring all, or substantially all,
of the business and assets of such party. No assignment of the Agreement will be
valid unless the potential assignee agrees to assume it. When assigned in
accordance with the
13
<PAGE>
foregoing, the Agreement will be binding upon, and will inure to the benefit of,
the assignee. With HOVIC's written approval, CONTRACTOR may subcontract any
portion of the Services to a qualified independent contractor. Such
subcontracting will not relieve CONTRACTOR of its obligations hereunder.
21.0 FORCE MAJEURE
-------------
Neither party will be obligated hereunder or liable in damages or
otherwise for delay or failure to perform for or during the time that such delay
or failure to perform is the direct or indirect result of fire, flood, war,
riot, strikes, labor disturbances or differences, acts of God, compliance with
any federal, state, territorial or municipal law, order, rule or regulation of
any Governmental authority or any other cause reasonably beyond the control of
the party affected.
22.0 CONSEQUENTIAL DAMAGES
---------------------
Neither party will be liable hereunder for any consequential or indirect
damages, in connection with the Services or the Facility.
23.0 INDEPENDENT CONTRACTOR's EMPLOYEES
----------------------------------
CONTRACTOR is an independent contractor and HOVIC does not retain any
control over the manner in which the Services will be performed, being
interested only in the results to be obtained. CONTRACTOR will make every effort
to have its employees work in harmony with the employees of HOVIC and of other
contractors on the premises and any differences among said employees will be
arbitrated by HOVIC, whose decision will be final.
24.0 CONFLICT OF INTEREST
--------------------
CONTRACTOR acknowledges that HOVIC has issued a policy relating to
conflicts of interest between HOVIC and its employees and further acknowledges
receiving a copy of such policy. In order to assure compliance with such policy,
CONTRACTOR will not, before, during or after performance of the Services, make,
offer, provide or agree to make, offer or provide any payment, gift, fee,
discount, commission, percentage, loan, service, entertainment, substantial
favor or anything of value to (i) any employee, agent or representative of
HOVIC, (ii) any member of their immediate families, or (iii) anyone claiming to
act or acting for or in behalf of any such person, nor will CONTRACTOR permit
any such person described in (i), (ii) or (iii) above, to have any financial or
economic interest in CONTRACTOR or any subsidiary or affiliate of CONTRACTOR. lf
CONTRACTOR is requested to make or provide any such payment, gift, fee,
discount, commission, percentage, loan, service, entertainment, substantial
favor or anything of value, by any such person described in (i), (ii) or (iii)
above, CONTRACTOR will report such request immediately to HOVIC in the manner
provided for the giving of notice under this Agreement. The failure by
CONTRACTOR to adhere strictly to any of the provisions of this Article will be
deemed by CONTRACTOR and HOVIC to be a substantial and material breach of this
Agreement, and at
14
<PAGE>
HOVIC'S sole option will be grounds for immediate suspension or termination of
this Agreement. All subcontracts or material supply contracts permitted or
required in connection with performance of the Services will contain provisions
in substantially the same form and substance as this Paragraph binding such
subcontractors or material suppliers to the same obligations hereunder as
CONTRACTOR.
25.0 NON-COLLUSIVE BIDDING
---------------------
CONTRACTOR warrants that it has not consulted with any other contractor
or person who has bid on the Services and that its bid was arrived at
independently of any collusion with another such contractor or person.
26.0 STRICT PERFORMANCE
------------------
The failure of HOVIC at any time to request strict performance by
CONTRACTOR of any provision of this Agreement will not affect the right of HOVIC
thereafter to enforce the same. No waiver by HOVIC of any breach or violation of
any of the terms of this Agreement will be deemed to be a waiver of any
continuing or succeeding breach of any such term of this Agreement, or as a
waiver of the term itself.
27.0 ENTIRE AGREEMENT
----------------
This Agreement embodies the entire agreement between HOVIC and
CONTRACTOR. CONTRACTOR does not rely on any previous oral, written or implied
representation, inducement or understanding in entering into this Agreement.
28.0 AMENDMENTS
----------
Amendments or changes to this Agreement will bind the parties only if in
a written form which states that it amends this Agreement and is signed by
authorized officers of the parties. A form for such amendment or change is
attached as Schedule D.
29.0 GOVERNING LAW
-------------
The interpretation of this Agreement and the rights and obligations of
the parties will be governed by the laws of the U.S. Virgin Islands.
30.0 NOTICES
-------
30.1 All notices required under the Agreement will be in writing and
delivered in person, by facsimile, or sent by certified mail and if to HOVIC,
to:
Hess Oil Virgin Islands Corp.
15
<PAGE>
P.O. Box 127
Kingshill
St. Croix, U.S. Virgin Islands 00850
Attention: Martin Marano
and, if to CONTRACTOR, delivered in person or sent by certified mail
addressed to:
Anthony Crane International
P.O. Box 5985, Sunny Isle
St. Croix, VI 00823
Attention: Mr. Michael Corn
30. Effective date of notice will be the date of receipt.
31.0 NON-DISCRIMINATION IN EMPLOYMENT
--------------------------------
CONTRACTOR will comply with the equal opportunity clause published in the
regulations of the U.S. Department of Labor Implementing Executive Order 11246,
which is incorporated in this Agreement by reference.
32.0 AFFIRMATIVE ACTION FOR HANDICAPPED WORKERS
------------------------------------------
CONTRACTOR will comply with the affirmative action clause and regulations
published by the U.S. Department of Labor implementing section 503 of the
Rehabilitation Act of 1973, Public Law 93-1 12, as amended, which are
incorporated in this Agreement by reference.
33.0 AFFIRMATIVE ACTION FOR DISABLED VETERANS AND VETERANS OF THE VIETNAM ERA
------------------------------------------------------------------------
CONTRACTOR will comply with the affirmative action clause and regulations
published by the U.S. Department of Labor implementing section 503, Title V of
the Vietnam Era Veteran's Readjustment Assistance Act of 1972, Public Law 92-
540, as amended, and Executive Order 11701, which are incorporated in this
Agreement by reference.
34.0 CERTIFICATION OF NONSEGREGATED FACILITIES
-----------------------------------------
CONTRACTOR certifies that it does not and will not maintain any facilities
it provides for its employees in a manner which will result in segregation on
the basis of race, color, religion, sex or national origin, or permit its
employees to perform their services at any location, under its control, where
segregated facilities are maintained; and that it will obtain a similar
certification prior to the award of any non-exempt subcontract.
16
<PAGE>
35.0 MINORITY BUSINESS ENTERPRISES
-----------------------------
CONTRACTOR will comply with the minority business enterprise clauses and
regulations published by the U.S. Department of Commerce implementing Executive
Order 11625, which are incorporated in this Agreement by reference.
IN WITNESS WHEREOF, CONTRACTOR and HOVIC have caused this Agreement to be
executed, effective as of the day and year first above written.
WITNESS: HESS OIL VIRGIN ISLANDS CORP.
BY:___________________________ /S/ R. L. SAGEBIEN
------------------------------------
R.L. SAGEBIEN, VICE PRESIDENT
WITNESS: ANTHONY CRANE INTERNATIONAL, L.P.
BY: ANTHONY CRANE RENTAL, INC.,
GENERAL PARTNER
BY:___________________________ /S/ RAY G. ANTHONY
------------------------------------
17
<PAGE>
ATTACHMENTS LIST
----------- ----
SCHEDULES
NUMBER DESCRIPTION
A. Scope of Services
B. Items to be Furnished by HOVIC
C. Compensation and Terms of Payment
D. Change Order
18
<PAGE>
ATTACHMENTS LIST
----------- ----
ATTACHMENTS TO SCHEDULE C
NUMBER
lA. Monthly Rates for Hydraulic and Conventional Cranes
lB. Schedule of Non-Operated Equipment
2. Time and Material Rate Build ups
3. Miscellaneous Terms and Conditions
4. Cost Reduction Incentive Program
5. Subcontracted Services
19
<PAGE>
ATTACHMENTS LIST
----------- ----
EXHIBITS
NUMBER
1. Equipment/Tool/Verification
2. Plant Rules and Procedures
3. Fire Retardant Clothing
4. Long Term Work Assignments (Time and Material Only)
5. Intermediate Work Assignments (Time and Material Only)
6. CONTRACTOR Services - Short Term Basis (Time and Material Only)
7. Time Keeping and Invoice Preparation
8. OSHA "Right-to-Know-Law Training"
9A. HOVIC Travel Procedure
10. Compliance with HOVIC Security and Automated Time Keeping Procedures
11A. Substance Abuse Policy
12. Safety Guidelines and Requirements for Contractors
13. Hiring HOVIC Employee Relatives
14. Manpower Requisitioning (Time and Material Only)
19. Customs Instructions for Contractors
22. Traffic Safety Rules
20
<PAGE>
EXHIBIT 10.22
SALE AND LEASE AGREEMENT
BETWEEN
ANTHONY CRANE SALES & LEASING, L.P.
AND
HESS OIL VIRGIN ISLANDS CORP.
for the
SALE AND LEASE OF MACHINERY AND EQUIPMENT
<PAGE>
SALE AND LEASE AGREEMENT
BETWEEN
ANTHONY CRANE SALES & LEASING, L . P.
AND
HESS OIL VIRGIN ISLANDS CORP.
for the
SALE AND LEASE OF MACHINERY AND EQUIPMENT
ARTICLE 1. GENERAL RECITALS
1.01. This is a contract encompassing the sale and lease of certain
machinery, equipment, rigging materials, and inventory between ANTHONY CRANE
SALES & LEASING, L.P., whose principal place of business is located at 1165 Camp
Hollow Road, West Mifflin, Pennsylvania, referred to as "ANTHONY," and Hess Oil
Virgin Islands Corp., whose principal place of business is located at P.O. Box
127, Kingshill, St. Croix, U.S. Virgin Islands, referred to as "HOVIC." HOVIC
and ANTHONY may be collectively referred to as the "Parties." The effective date
of this contract is August 1, 1996.
1.02. ANTHONY sells, purchases, and leases machinery and equipment,
including cranes, manlifts, aerial platforms, forklifts, rigging material and
other related heavy equipment products, to and from commercial and industrial
users.
1.03. HOVIC owns, operates, maintains, and services an extensive inventory
of heavy equipment at its refinery site at St. Croix, Virgin Islands.
1.04. HOVIC has determined that it would be of economic benefit to sell,
transfer, and assign its ownership and title to certain machinery and equipment
at its refinery facility at St.
1
<PAGE>
Croix, Virgin Islands and Anthony is willing to acquire and purchase such
machinery and equipment.
1.05. HOVIC has determined that it would be of economic benefit to lease
certain machinery and equipment at its refinery facility at St.
Croix, Virgin Islands and Anthony is willing to lease to HOVIC such machinery
and equipment.
1.06. The terms of this contract are intended by the Parties as a final
expression of their Contract with respect to such terms.
ARTICLE 2. MACHINERY AND EQUIPMENT
2.01. HOVIC agrees to sell and ANTHONY agrees to purchase the machinery and
equipment as described in Exhibit "A," attached to and made a part of this
Contract (the "Machinery and Equipment"), pursuant to the terms and conditions
set forth herein.
For purposes of Article 2.01, Anthony is defined to include its affiliates,
who may by way of assignment by Anthony, purchase certain items of the Machinery
and Equipment from HOVIC. Notwithstanding any assignment, as provided herein,
Anthony shall remain solely responsible for payment of the purchase price for
the Machinery and Equipment as specified in Article 4.
2.02. The Parties intend the description of the Machinery and Equipment to
be for purposes of identification of the Machinery and Equipment to this
Contract and to be made part of the basis of this bargain.
ARTICLE 3. WARRANTIES
3.01. HOVIC warrants that at the time of title transfer, it will be lawful
owner in every respect of all the Machinery and Equipment and that it is free
and clear of all liens, security agreements, encumbrances, claims, demands, and
charges of every kind whatsoever.
2
<PAGE>
3.02. HOVIC warrants that all manufacturers' warranties covering the
Machinery and Equipment, to the extent assignable, are hereby sold, transferred,
and assigned to ANTHONY.
3.03. EXCEPT AS PROVIDED IN SECTIONS 3.01 AND 3.02, RESPECTIVELY, THE
MACHINERY AND EQUIPMENT DESCRIBED IN THIS CONTRACT ARE SOLD ON AN "AS IS" BASIS,
AND HOVIC DISCLAIMS ANY IMPLIED WARRANTIES WITH RESPECT TO THE MACHINERY AND
EQUIPMENT, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
ARTICLE 4. PRICE
4.01. The purchase price for the Machinery and Equipment that are the
subject matter of this contract is $610,000.00 ("Purchase Price").
4.02. The terms of payment of the purchase price for the Machinery and
Equipment are as follows:
ANTHONY shall wire transfer funds to an account designated by HOVIC in an
amount equal to the Purchase Price for those items of the Machinery and
Equipment as are being delivered to ANTHONY. Payment of the Purchase Price shall
be made in exchange for requisite documents of title and a Bill of Sale
identifying those items of the Machinery and Equipment being delivered to
ANTHONY. The exchange of the referenced documentation shall be made by HOVIC'S
agent to ANTHONY'S agent at St. Croix, United States Virgin Islands.
ARTICLE 5. SHIPMENT AND DELIVERY
5.01. Sale, delivery, and passage of title to the Machinery and Equipment
shall be F.O.B. St. Croix, United States Virgin Islands.
5.02. The risk of loss of the Machinery and Equipment will pass to Anthony
upon tender
3
<PAGE>
of documents of title at St. Croix, United States Virgin Islands.
Notification of Delivery
5.03. As soon as the Machinery and Equipment are
available for delivery, HOVIC will send immediate notification to ANTHONY as to
that fact and inform ANTHONY as to the dates and times at which ANTHONY may take
delivery.
Right to Inspection
5.04. ANTHONY or its designated agents shall have the right to inspect and
inventory all of the Machinery and Equipment at HOVIC's refinery site at St.
Croix, Virgin Islands. Subsequent to such inspection by ANTHONY and prior to
delivery by HOVIC, HOVIC shall maintain the Machinery and Equipment in the same
condition as when inspected by ANTHONY.
5.05. If ANTHONY rejects any items of the Machinery and Equipment, the
rejected items of the Machinery and Equipment will be immediately returned to
HOVIC.
5.06. ANTHONY will not be charged for items of the Machinery and Equipment
properly rejected as being nonconforming under the requirements of this
Contract. The expenses of inspection will be borne by ANTHONY except in any
instance in which items of the Machinery and Equipment properly have been
rejected.
ARTICLE 6. LEASE OF MACHINERY AND EQUIPMENT
6.01. Subsequent to the effective date of this Contract, HOVIC agrees to
lease from ANTHONY certain machinery, equipment, and other items on a bare
rental basis, pursuant to and in accordance with the terms and conditions of a
Master Rental Agreement for Bare Rental Equipment attached hereto as Exhibit
"B," and made a part of this Contract (the "Master Rental Agreement").
4
<PAGE>
ARTICLE 7. ASSIGNMENT AND DELEGATION
7.01. Except as provided in the Master Rental Agreement no right or
interest in this contract shall be assigned by ANTHONY or HOVIC, and no
delegation may be made of any obligation owed by ANTHONY or HOVIC. Any attempted
assignment or delegation shall be void and totally ineffective for all purposes
with the putative assignor or delegator being liable for any damages that are a
consequence of any attempted assignment or delegation.
ARTICLE 8. REMEDIES AND LIABILITIES
8.01. In addition to the remedies provided in the Master Rental Agreement,
the remedies of ANTHONY under this Contract are the right of rejection as
specified in Sections 5.05 and 5.06, and those remedies available to Anthony at
law or in equity.
8.02. In addition to the remedies provided in the Master Rental Agreement,
the remedies of HOVIC under this Contract are the right to repair or replace any
items of the Machinery and Equipment properly rejected by ANTHONY as
nonconforming, and those remedies available to HOVIC at law or in equity.
ARTICLE 9. NOTICES
9.01. All notices required under the Contract will be in writing and
delivered in person, by facsimile, or sent by certified mail and if to HOVIC,
to:
Hess Oil Virgin Islands Corp.
P.O. Box 127
Kingshill
St. Croix, U.S. Virgin Islands 00850
Attention: Mr. Martin Marano
and, if to CONTRACTOR, delivered in person, by facsimile, or sent by certified
mail addressed to:
ANTHONY CRANE LEASING, L.P.
5
<PAGE>
1165 Camp Hollow Road
West Mifflin, Pennsylvania
ATTN: Richard Rossi
9.02. Effective date of notice will be the date of receipt.
ARTICLE 10. MISCELLANEOUS
10.01. If any portion of this Contract is held to be unenforceable for any
reason by a court or authority of competent jurisdiction, then such portion will
be deemed to be stricken and the remainder of this Contract shall continue in
full force and effect.
10.02. This Contract is an integrated document covering the entire
agreement of the Parties and supersedes any prior communications relating to the
terms and conditions of this Contract and may not be modified except by written
amendment signed by the authorized representatives of both Parties.
10.03. None of the obligations of this Contract shall be deemed to be
waived by either Party unless such obligation is waived, in writing, by an
authorized representative of such Party.
10.04. The Parties acknowledge that the transaction that is the subject
matter of this Contract bears a reasonable relation to the State of Pennsylvania
and agree that the law of Pennsylvania, without regard to any conflict of law
provisions, will govern their rights and duties.
10.05. Execution, delivery, and performance of this Contract by the
Parties is expressly
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conditioned on the execution, delivery and performance of that certain Sale
Agreement between ANTHONY and AMERADA HESS CORPORATION for the sale of Machinery
and Equipment.
Signed this 25/th/ day of July, 1996.
HESS OIL VIRGIN ISLANDS CORP.
By: /S/ R. Sagebien
-----------------
/s/ R. Sagebien
----------------------------
Printed Name
Vice President
----------------------------
Title
WITNESS
By: __________________
ANTHONY CRANE SALES & LEASING, L . P.
By: /s/ Ray G. Anthony
------------------
Ray G. Anthony
----------------------------
Printed Name
Chief Executive Officer
----------------------------
Title
WITNESS
By: __________________
7
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EXHIBIT 10.23
MASTER RENTAL AGREEMENT
FOR BARE RENTAL EQUIPMENT
-------------------------
THIS MASTER RENTAL AGREEMENT FOR BARE RENTAL EQUIPMENT (this
"Agreement") is made as of August 1, 1996, by and between ANTHONY CRANE SALES &
LEASING, L.P. ("Anthony") and HESS OIL VIRGIN ISLANDS CORP. ("Lessee") for the
lease by Anthony to Lessee of certain machinery, equipment and other items on a
bare rental basis.
Section 1. RENTAL OF EQUIPMENT Anthony hereby leases to Lessee, and
-------------------
Lessee hereby leases and hires from Anthony, on a bare rental basis, the
machinery, equipment and other items (the "Core Equipment") described in the
attached Exhibit "A." Lessee stipulates that the "Insured Values" designated on
the attached Exhibit "A" shall constitute the fair and reasonable market value
and replacement value of the Core Equipment. Additionally, Lessee anticipates
that from time to time Lessee will lease and hire from Anthony certain
additional machinery, equipment and other items (the "Additional Equipment") on
a bare rental basis. Further, Lessee from time to time will lease certain spare
and/or replacement parts from Anthony. The Additional Equipment and the spare
and/or replacement parts will be described in Purchase Orders to be issued by
Lessee to Anthony after the effective date hereof, effective for such Additional
Equipment and the spare and/or replacement parts as of the date the Lessee's
Purchase Orders are accepted and executed in writing by Anthony. Lessee
stipulates that the "Insured Value" designated on any Purchase Order accepted
and executed in writing by Anthony shall constitute the fair and reasonable
market value and replacement value of the Additional Equipment. (A sample of a
Purchase Order form is attached hereto as Exhibit "B.") The Core Equipment,
Additional Equipment and the spare and/or replacement parts may be referred to
herein collectively as "the Equipment". LESSEE ACKNOWLEDGES THAT THE EQUIPMENT
IS PROVIDED BY ANTHONY ON A BARE RENTAL BASIS ONLY. LESSEE IS RESPONSIBLE FOR
ENSURING COMPLIANCE BY IT AND ITS EMPLOYEES, AND OF THE EQUIPMENT ITSELF, WITH
ALL APPLICABLE LAWS, REGULATIONS AND ORDINANCES, INCLUDING, WITHOUT LIMITATION,
THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970 ("OSHA") AND REGULATIONS
(PARTICULARLY 29 C.F.R. PART 1926, SUBPART N). Lessee agrees that Anthony shall
have no responsibility of any kind for Lessee's (or the Equipment's) compliance
with any such laws, regulations or ordinances during the periods when the
Equipment is in Lessee's possession. Lessee stipulates and agrees that during
the term of this Agreement that Lessee shall neither lease and/or rent any
cranes, as defined herein, from any third-party without first providing Anthony
reasonable opportunity to supply or provide the requested equipment.
Section 2. TERM OF AGREEMENT; TERM OF LEASES OF INDIVIDUAL PIECES OF
-----------------
EQUIPMENT The term of this Agreement for the Core Equipment shall be (5) years
commencing on August 1, 1996. The term(s) of the lease(s) of the Additional
Equipment to be leased by Anthony to Lessee hereunder shall commence on the
date(s) specified in the Lessee Purchase Orders for those pieces of Equipment.
Upon expiration of the term of a lease, the applicable Equipment shall be
returned to a location in the United States agreed to by Anthony and Lessee, in
the same condition as when delivered to Lessee, ordinary wear and tear from use
thereof excepted.
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Section 3. RENT The rental amount of the Core Equipment shall be as
----
specified in Exhibit "A." The rental amount of any Additional Equipment shall be
as specified in Exhibit "A" for those types of machinery and equipment described
in Exhibit "A," otherwise, the rental amount of any Additional Equipment shall
be as stated on Lessee's Purchase Orders. Unless otherwise agreed by the
parties, rent shall begin at the time the Equipment is delivered by Anthony to
the F.O.B. Shipment Point referenced in Section 4 and shall continue until such
time as the Equipment is returned by Lessee in accordance with the provisions of
Section 4. Rental amounts are not subject to any deductions on account of any
non-working time of the Equipment. Lessee shall not be entitled to any abatement
of rent, reduction thereof or set-off, counterclaim, recoupment or defense
against rent for whatever reason. All rental invoice terms shall be net 30 days
from date of invoice.
At the beginning of each month, Anthony will provide an invoice to
Lessee of the Monthly Minimum Charges set forth in Section 3. By the 5th day
after the close of a month, Anthony will submit an invoice of the actual charges
for the month and will separately designate any additional charges owed to
Anthony above the Monthly Minimum Charges. The parties agree that Monthly
Minimum Charges are not in question and will be paid within fifteen (15)
calendar days after Lessee's receipt of the invoice notwithstanding any review
process or Lessee audit. Lessee will pay approved amounts of Anthony's invoice
for additional charges within fifteen (15) calendar days after Lessee's receipt.
If invoices are paid in full by Lessee by the 10th calendar day after receipt, a
1% discount will apply. If any portion of the additional charges is questioned
by Lessee, Lessee will pay the remaining portion.
Section 4. TRANSPORTATION CHARGES. The Equipment will be shipped or
----------------------
transported F.O.B. (Eastern Seaboard United States Shipment Point to be mutually
agreed by the parties). Anthony, at its own expense, shall load and transport
the Equipment to the designated F.O.B. (Eastern Seaboard United States Shipment
Point as noted herein) for delivery to Lessee. If Equipment is leased for less
than two years, return of the Equipment by the Lessee to the location in the
United States as agreed to by the parties is the responsibility of the Lessee.
Anthony will upon return of the Equipment, unload it and pay all demurrage
accruing at the receiving point. Lessee, at its own expense, shall do all other
loading, unloading, installation, dismantling and transportation of the
Equipment and shall pay all other freight, demurrage, storage, switching,
drayage, trucking or other transportation charges against the Equipment from the
time of shipment by Anthony to and including the time of the Equipment's return
to Anthony. If Equipment is leased for a period exceeding two years, all costs
associated with the return of Equipment is for Anthony's account.
Section 5. COMPLIANCE WITH LAWS AND TAXES. Lessee shall comply with
------------------------------
and conform to all laws and regulations relating to the possession and use or
maintenance of the Equipment, including all OSHA laws and regulations, and shall
save Anthony harmless against actual or asserted violations thereof, and pay all
costs and expenses of every character, including reasonable attorneys' fees,
occasioned by or arising out of any use or loss of use of any of the Equipment.
Anthony shall include on its invoices as a separate line item, and Lessee shall
pay to Anthony, any gross receipts tax occasioned by or arising out of any use
of the Equipment.
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Anthony shall comply with and conform to all laws and regulations
relating to the conduct of its business including without limitation, laws and
regulations of the Virgin Islands and the United States to the reporting of
income and the payment of taxes thereon.
Section 6. TITLE All Core Equipment and Additional Equipment shall
-----
remain personal property, and title thereto shall remain in Anthony or its
assignee exclusively, and nothing in this Agreement shall be deemed to have the
effect of conferring any right or title whatsoever in or to the Core Equipment
and Additional Equipment upon or to Lessee, other than as a lessee thereof.
Lessee shall keep the Core Equipment and Additional Equipment free from any and
all liens and claims, and shall do or permit no act or thing whereby Anthony's
title or rights in the Core Equipment and Additional Equipment may be encumbered
or impaired.
Section 7. EQUIPMENT CONDITION, INSPECTION, MAINTENANCE AND REPAIRS.
--------------------------------------------------------
Anthony shall indicate the general condition of the Equipment on Anthony's
delivery slip(s). (A sample of such slip is attached hereto as "Exhibit C". This
slip will also be used by Anthony to verify the general condition of the
equipment upon its return to Anthony at the expiration of the lease.) Lessee
shall inspect the Equipment and certify that it is in good working condition.
Arrival of the Equipment at point of destination and failure of Lessee to object
to the condition thereof prior to shipment shall constitute an acknowledgment by
Lessee that the Equipment has been inspected, accepted and determined to be in
good, safe and servicele condition and fit for intended use. If the Equipment
thereafter proves defective or unfit for use because of accident or otherwise,
Lessee's only remedy shall be to return the Equipment to Anthony and terminate
the lease for the Equipment. However, Lessee shall allow a reasonable time, not
to exceed seven (7) days, for the Equipment to be repaired by Anthony
International, L.P. and redelivered to Lessee. Should damage to the Equipment
not be repairable within the time specified, and the damage to the Equipment was
occasioned by the fault or neglect of Lessee, Lessee shall bear the cost of
transportation of the Equipment to a facility or location where proper repair
can be accomplished. Otherwise, Anthony shall be responsible for such costs.
The Core Equipment and Additional Equipment shall be operated only by
competent persons. In this regard, Lessee stipulates and agrees that all cranes
leased to Lessee shall be operated exclusively by operators employed by Anthony
International, L.P. "Cranes", as defined herein, includes carrier-mounted
lattice boom cranes, crawler-mounted lattice boom cranes, carrier-mounted
telescopic boom cranes, crawler-mounted telescopic boom cranes, rough terrain
cranes, heavy lift mobile cranes and industrial (cherrypicker, carry deck)
cranes. All other equipment and machinery not constituting cranes will be
operated by competent persons in the employ or under the control of Lessee.
Lessee, at its own expense, shall inspect, maintain, operate, use and
repair the Equipment. Therefore, Lessee must perform the following items at its
expense: 1) Inspect the Equipment prior to use and on a daily, monthly and
annual basis (where available), 2) Perform preventative maintenance on the
Equipment in accordance with the manufacture's recommendations; and 3) adjust
and/or repair the Equipment to ensure that the Equipment is in a safe working
condition and to comply with OSHA regulations. In an effort to facilitate
Lessee's compliance with certain of the
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foregoing duties and responsibilities, Lessee stipulates and agrees that, at
Lessee's expense, all machinery and equipment leased by Anthony to Lessee shall
be maintained, repaired, serviced, and inspected on a monthly (or other
periodic) and annual basis by Anthony International, L.P. who shall be engaged
by Lessee to perform such services. Lessee shall remain responsible for
conducting or performing daily inspections and preventative maintenance on all
machinery and equipment operated by its employees or individuals under Lessee's
control.
In this regard, Lessee should note the following matters:
OSHA OSHA regulations pertaining to Equipment require daily, monthly
----
(or other periodic) and annual inspections. Except as otherwise provided herein,
Lessee is responsible for conducting these inspections and for otherwise
ensuring that the Equipment leased to it meets, and is operated in accordance
with, OSHA requirements. To assist Lessee in conforming with these requirements,
Anthony directs Lessee's attention to the following:
MAINTENANCE Maintenance must be conducted by Lessee as per the
-----------
manufacturer's specifications found in the Operator's Manual.
RECORDKEEPING REQUIREMENTS Anthony has provided a log with certain of
--------------------------
the Equipment to assist Lessee in complying with the following inspection
requirements. If Lessee does not locate a Log Book, it should contact and
request a replacement Log Book from the designated supervisory personnel of
Anthony located at Lessee's refinery site at St. Croix, Virgin Islands.
Instructions for completing the following reports are located on the back flap
on the Log Book.
DAILY INSPECTION REPORTS Bare rental customers are required to
------------------------
designate a competent person to inspect the Equipment on daily basis. It is
Lessee's responsibility to forward the white original report to Anthony's
office. The yellow copy should remain in the Log Book.
MONTHLY INSPECTION REPORTS Bare rental customers are required to
--------------------------
designate a competent person to inspect the Equipment on a monthly basis. This
inspection should be performed on the first working day of each month. It is
Lessee's responsibility to forward the white original report to Anthony's office
along with the completed Daily Inspection Reports. The pink copy should remain
in the Log Book.
The yellow and pink copies of the foregoing inspection reports should
be available upon the request of an OSHA Compliance Officer; therefore,
following completion, the reports shall immediately be delivered to the Anthony
International, L.P. Dispatch Office located at Lessee's refinery site at St.
Croix, Virgin Islands.
ANNUAL INSPECTIONS Each crane's hoisting machinery must be thoroughly
------------------
inspected by a competent person annually.
The following items are being furnished to Lessee to assist it with
OSHA compliance. If they
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are not returned, Lessee will be charged the amounts listed.
EQUIPMENT RETURNED WITHOUT LOG: $500.00 FEE
EQUIPMENT RETURNED WITHOUT OPERATOR'S
MANUAL: $500.00 FEE
EQUIPMENT RETURNED WITHOUT FIRE
EXTINGUISHER: $500.00 FEE
EQUIPMENT RETURNED WITHOUT LOAD CHART: $500.00 FEE
Lessee hereby agrees to conduct the required inspections and maintain
records to comply with all OSHA regulations.
Section 8. DAMAGE TO EQUIPMENT Lessee shall notify Anthony of any
-------------------
damage to the Equipment within two (2) working days from the date of the damage.
All repairs to the Equipment occasioned by damage only if caused by Lessee or
Lessee's Contractors (other than Anthony International, L.P.) during the term
hereof shall be at the expense of Lessee, except for damage resulting from any
latent defects in the Equipment, which shall be at the expense of Anthony. If,
upon Lessee's return of the Equipment, Anthony determines that the Equipment has
been subject to damage or excess wear and tear, Lessee agrees to pay Anthony
upon demand the amount necessary to restore the Equipment to the same condition
as when initially leased, ordinary wear and tear excepted. Should damage to the
Equipment not be repairable at the HOVIC facility, and the damage to the
Equipment was occasioned by the fault or neglect of Lessee, Lessee shall bear
the cost of transportation of the Equipment to a facility or location where
proper repair can be accomplished. Furthermore, all risk of loss or damage to
the Equipment during such transport, accidental or otherwise, shall be borne
exclusively by Lessee. Anthony and Lessee acknowledge and agree that the
replacement value of the Equipment set forth on "Exhibit C" shall be deemed the
value of the Equipment in order to establish the amount of the loss, damage or
injury thereto. In making such determination, however, it is understood that no
rental payments, paid or due, shall apply to the payment of such loss. The
rental period shall continue to run until all major repairs to the Equipment are
completed. Lessee, at its sole discretion, will have the option to pay Anthony
the fair market value of any Equipment in which the cost to repair the damaged
equipment exceeds the fair market value.
Section 9. LIABILITY; INDEMNIFICATION LESSEE SHALL INDEMNIFY, HOLD
--------------------------
HARMLESS AND DEFEND ANTHONY, AND ITS OFFICERS, DIRECTORS, SHAREHOLDERS,
PARTNERS, SUCCESSORS, ASSIGNS, EMPLOYEES, REPRESENTATIVES AND AGENTS FROM AND
AGAINST ANY AND ALL LIABILITY FOR ANY CLAIM, SUIT, JUDGMENT, DAMAGE, INJURY,
LOSS, COST, EXPENSE OR PENALTY OF ANY KIND OR NATURE WHATSOEVER, INCLUDING
ATTORNEYS' FEES (TOGETHER, "CLAIMS"), ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR THE EQUIPMENT INCLUDING WITHOUT LIMITATION, CLAIMS CONNECTED WITH
OR RESULTING FROM THE SELECTION, ACCEPTANCE, DELIVERY, MAINTENANCE, USE,
OPERATION AND/OR CONTROL OF THE EQUIPMENT BY LESSEE AND ITS EMPLOYEES, AGENTS
AND REPRESENTATIVES INCLUDING, BUT NOT
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LIMITED TO, ANY SUCH LIABILITY ARISING OUT OF LESSEE'S FAILURE TO COMPLY WITH
APPLICABLE LAWS, REGULATIONS AND ORDINANCES, TO THE EXTENT OF ANY NEGLIGENCE OF
LESSEE AS DETERMINED BY A COURT OF COMPETENT JURISDICTION, PROVIDED, HOWEVER,
THAT LESSEE SHALL HAVE NO OBLIGATION TO INDEMNIFY ANTHONY FROM CLAIMS WHICH
RESULT SOLELY FROM LATENT DEFECTS IN THE EQUIPMENT OR ANY NEGLIGENCE OF ANTHONY.
CONVERSELY, ANTHONY SHALL INDEMNIFY, HOLD HARMLESS AND DEFEND LESSEE, AND ITS
OFFICERS, DIRECTORS, SHAREHOLDERS, AFFILIATES, SUCCESSORS, ASSIGNS, EMPLOYEES,
REPRESENTATIVES AND AGENTS FROM AND AGAINST ANY AND ALL LIABILITY FOR ANY CLAIM,
SUIT, JUDGMENT, DAMAGE, INJURY, LOSS, COST, EXPENSE OR PENALTY OF ANY KIND OR
NATURE WHATSOEVER, INCLUDING ATTORNEYS' FEES (TOGETHER, "CLAIMS"), ARISING OUT
OF OR IN CONNECTION WITH ANY LATENT DEFECTS IN THE EQUIPMENT, TO THE EXTENT OF
ANY NEGLIGENCE OF ANTHONY AS DETERMINED BY A COURT OF COMPETENT JURISDICTION,
PROVIDED, HOWEVER THAT ANTHONY SHALL HAVE NO OBLIGATION TO INDEMNIFY LESSEE FROM
CLAIMS WHICH RESULT FROM ANY NEGLIGENCE OF LESSEE. IF ANTHONY AND LESSEE ARE
ADJUDICATED NEGLIGENT WITH RESPECT TO ANY DAMAGE OR INJURIES SUSTAINED, THIS
CONTRACTUAL OBLIGATION OF INDEMNITY WILL CONTINUE BUT EACH OF ANTHONY AND LESSEE
SHALL INDEMNIFY THE OTHER (THE INDEMNITEE) ONLY FOR AN AMOUNT EQUAL TO THE
AMOUNT OF THE JUDGMENT AWARDED AND/OR PAID BY THE INDEMNITEE TO THE CLAIMANT,
MULTIPLIED BY THE PERCENTAGE OF RESPONSIBILITY FOR CLAIMANT'S DAMAGES
ADJUDICATED TO BE CAUSED BY THE INDEMNITOR. ANTHONY AND LESSEE WILL DO THIS
NOTWITHSTANDING THE VIRGIN ISLANDS COMPARATIVE NEGLIGENCE STATUTE, TITLE 5
V.I.C. SECTION 1451. IT IS EXPRESSLY AGREED THAT THE CONTRACTUAL OBLIGATIONS OF
INDEMNITY REFERRED TO HEREIN DO NOT EXTEND TO THE CONSEQUENCES OF EITHER PARTY'S
INTENTIONAL TORTS, OR TO PUNITIVE OR EXEMPLARY DAMAGES. EACH PARTY'S OBLIGATION
FOR CONTRACTUAL COMPARATIVE INDEMNITY AS PROVIDED FOR HEREIN SHALL SURVIVE
EXPIRATION OR TERMINATION OF THIS AGREEMENT.
Section 10. INSURANCE Lessee, at its expense, shall take out, carry
---------
and maintain the following insurance during the term of this Agreement:
(a) Commercial General Liability - Lessee shall self-insure
----------------------------
the first $1,000,000/$2,000,000 annual aggregate, including contractual
liability, protecting the interests of both Anthony and Lessee against liability
for property damage and personal injury or death arising out of the maintenance,
repair, use and operation of the Equipment;
(b) Inland Marine All Risk Coverage - (Physical damage
-------------------------------
insurance), Lessee shall self-insure Anthony's Equipment for physical loss or
damage to that which would be recoverable under an ocean marine cargo policy
written as follows:
Subject to American Institute Cargo clauses (September 1,
1995) 32B-16
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clause No. 3 deleted and the following wording substituted: "Against all risks
of physical loss or damage from any external cause." "Including war, etc. risks,
and strikes, riots and civil commotion, risks all as per current American
Institute clauses".
Regarding the risk of physical loss or damage while cranes
and equipment are situated at the refinery; Lessee shall self-insure this risk
under the terms and conditions of a standard inland marine policy at full
replacement value providing the deletion of the overload or boom exclusion.
(c) Umbrella Liability - Lessee will provide limits of
------------------
liability of $4,000,000 with a $4,000,000 annual aggregate.
All insurance required hereunder, except that which is self-insured by Lessee,
shall be maintained with responsible insurance companies of recognized standing
and shall provide a thirty (30) day prior written notice of cancellation to
Anthony. Lessee shall be responsible for payment of any deductibles. Lessee
shall furnish Certificate(s) of Insurance to Anthony evidencing such coverage
stated above and designating Anthony as an "Additional Assured" and provide for
a waiver of Underwriters' right of subrogation in favor of Anthony.
Section 11. DEFAULT; TERMINATION If, during the term of this
--------------------
Agreement, one or more of the following shall occur; (a) Lessee shall default in
the payment when due of any rent or other payment provided for herein; (b)
Lessee shall attempt to sell, transfer, encumber or sublet the Equipment without
prior written consent of Anthony; (c) Lessee fails to operate, maintain, repair
or inspect the Equipment as provided for herein; (d) Lessee shall default in the
observance or performance of any other covenant, condition or agreement; (e) a
proceeding shall have been instituted in a court of competent jurisdiction
seeking a decree or order (i) for relief in respect of Lessee in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect or (ii) for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of Lessee or of
its property, or (iii) for the winding up or liquidation of the affairs of
Lessee; and either (I) any such proceeding shall remain undiminished or unstayed
and in effect for a period of thirty (30) consecutive days or (II) such court
shall enter a decree or order granting the relief sought in such proceeding; (f)
Lessee shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, shall consent to the
entry of an order for relief in an involuntary case under any such law, or shall
consent to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of Lessee
or for any substantial part of its property, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action in furtherance of any of the
foregoing; and/or (g) Lessee, as determined solely by Anthony, shall become
financially insecure, then, in any such case, Anthony may declare this Agreement
in default. At any time after such declaration, Lessee hereby authorizes Anthony
to enter, with or without legal process, any premises where the Equipment is
located and to take possession thereof. Lessee shall provide Anthony with
unobstructed ingress and egress for such purpose. Furthermore, Lessee shall
immediately pay to Anthony all amounts then due hereunder and for all costs of
removal of the Equipment from the possession of Lessee. Lessee
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shall also pay Anthony all costs incurred by Anthony, including court costs and
attorneys' fees, in connection with any efforts to collect any unpaid amounts
due from Lessee. The remedies provided for herein in favor of Anthony shall not
be deemed exclusive, but shall be cumulative and shall be in addition to all
other remedies existing at law or in equity.
Lessee reserves the right to terminate this Agreement at any
time, conditioned on Lessee providing Anthony ninety (90) days notice of the
effective date of termination. During the interval between the date Anthony
receives notice of Lessee's intent to terminate this Agreement and the effective
date of termination, Anthony shall be guaranteed the minimum monthly rental as
specified in Section 3 of this Agreement.
Lessee's right to terminate this Agreement is further conditioned
on Lessee's payment of the following to Anthony:
(1) Three (3) months minimum monthly rental as specified in
Section 3 herein for all Anthony Equipment located at Lessee's
refinery at St. Croix, Virgin Islands. The three (3) months
minimum monthly equipment rental specified herein shall be
exclusive of and in addition to the guaranteed minimum monthly
rental accruing between Lessee's notice of intent to terminate
this Agreement and the effective date of termination. The three
(3) months minimum monthly rental specified herein shall be the
maximum guaranteed rentals to which Anthony shall be entitled
under this section. The three (3) months minimum monthly rental
period as specified herein shall commence following return to
Anthony of all Anthony Equipment located at Lessee's refinery at
St. Croix, Virgin Islands. Should for any reason Lessee impair,
impede or otherwise prevent Anthony from acquiring or obtaining
return of the Equipment following the effective date of
termination, the three (3) months minimum monthly rental period
specified herein shall not commence to run and shall be extended
for each day that Lessee impairs, impedes, or otherwise prevents
the return of the Equipment to Anthony, during which time rentals
will continue to accrue for the account of Lessee in accordance
with Section 3 herein. Should Lessee or other third party
purchase the Equipment or Anthony re-lease the Equipment,
Lessee's responsibility for payment of the three (3) months
minimum monthly rental specified herein will terminate on a
prorated basis as of the date of purchase or re-lease. For
purposes of non-breach termination, as provided in this Section,
Lessee shall additionally pay all shipment and transportation
costs accrued or associated with return of all Anthony Equipment
to an Eastern Seaboard United States Destination Point designated
by Anthony. Termination of this Agreement shall not be effective
until the Equipment has been shipped and delivered by Lessee to
the designated Eastern Seaboard United States Destination Point,
or
(2) the fair market value of all Anthony Equipment located at
Lessee's refinery at St. Croix, Virgin Islands. Lessee shall be
guaranteed the opportunity to exercise first option to purchase
the Equipment at fair market value prior to Anthony's
8
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removal of the Equipment from Lessee's St. Croix refinery.
Anthony stipulates and agrees that should any third-party offer
to purchase the Equipment from Anthony at a price which Anthony
determines to be commercially reasonable, that Anthony will
provide Lessee a reasonable opportunity, not to exceed 10
calendar days, to match said offer and purchase the Equipment for
the amount stated, which will be deemed to be the fair market
value. Should Anthony and Lessee be unable to agree as to the
fair market value of the Equipment, Anthony and Lessee shall each
appoint one (1) qualified heavy equipment surveyor and the
surveyors so appointed shall select a third (3rd) surveyor, who
jointly will determine the fair market value of the Equipment
which Anthony and Lessee hereby stipulate will be binding for
purposes of this Section. Title to Equipment sold by Anthony to
Lessee hereunder shall be free and clear of any and all liens,
mortgages, security interests or other encumbrances, the release,
payment and/or satisfaction of which shall be the responsibility
of Anthony.
Section 12. ASSIGNMENT OR SUBLEASE Lessee shall neither assign this
----------------------
Agreement nor sublease the Equipment without Anthony's prior written consent,
which consent shall not be unreasonably withheld.
Section 13. ANTHONY'S RIGHT TO EFFECT COMPLIANCE In case of failure
------------------------------------
of Lessee to comply with any provision of this Agreement including, but not
limited to, Lessee's failure to pay or satisfy any gross receipt taxes, liens,
insurance premiums or other charges, Anthony shall have the right, but shall not
be obligated, to effect such compliance in whole or in part, and all costs and
expenses shall be paid by Lessee upon demand by Anthony with interest thereon at
the highest lawful rate (unless otherwise mutually agreed in writing by the
parties) until all such amounts are paid in full. Anthony's effecting such
compliance shall not constitute a waiver of any default by Lessee hereunder.
Section 14. LIMITATION OF WARRANTIES AND REMEDIES Anthony will
-------------------------------------
assign, transfer, or otherwise pass through to HOVIC any manufacturer's
warranties, which the manufacturer authorizes to be assigned and/or transferred,
while the Equipment is in the possession of HOVIC pursuant to the terms of this
Agreement. Otherwise, ANTHONY HAS NOT MADE, AND DOES NOT HEREBY MAKE, NOR SHALL
IT BE DEEMED BY VIRTUE OF HAVING LEASED THE EQUIPMENT PURSUANT TO THIS AGREEMENT
TO HAVE MADE, ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO
THE MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, DESIGN OR CONDITION OF,
OR AS TO THE QUALITY OF THE WORKMANSHIP IN, THE EQUIPMENT. LESSEE ACKNOWLEDGES
AND AGREES THAT ANTHONY SHALL NOT BE LIABLE FOR INCIDENTAL, SPECIAL, INDIRECT OR
CONSEQUENTIAL OR OTHER SIMILAR DAMAGES IN CONNECTION WITH ANTHONY'S PERFORMANCE
UNDER THIS AGREEMENT OR FROM THE SELECTION, USE OR OPERATION OF THE EQUIPMENT BY
LESSEE.
Section 15. TERMS AND CONDITIONS INAPPLICABLE Except as otherwise
---------------------------------
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expressly stated herein, Lessee and Anthony acknowledge and agree that the terms
and conditions set forth on any (a) Lessee purchase order which is accepted and
executed by Anthony or (b) Anthony short form rental agreement or delivery slip
shall be of no force and effect with respect to the Equipment and the
transactions contemplated by this Agreement; provided, however, that Anthony's
short term rental agreements or delivery slips shall be used by the parties to
verify the amount of hours of use by Lessee of the Equipment.
Section 16. MISCELLANEOUS
-------------
(a) Except as otherwise agreed herein, no obligation of
either party hereunder shall survive the term hereof. Any cancellation or
termination by the parties hereto pursuant to the provisions of this Agreement
shall not release the parties from any then outstanding obligations, of the
parties hereunder.
(b) This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
written and oral agreements.
(c) This Agreement may be modified, amended or mutually
rescinded only by a written instrument executed by each of the parties hereto.
(d) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and, subject to Section 12 hereof, their
respective successors and assigns.
(e) Either party's failure at any time to require strict
performance of any of the provisions of this Agreement shall not waive either
party's right to demand strict compliance therewith or with any other provision
hereof.
(f) Anthony and Lessee acknowledge that the transaction that
is the subject matter of this Contract bears a reasonable relation to the State
of Pennsylvania and agree that the law of Pennsylvania, without regard to any
conflict of law provisions, will govern their rights and duties.
WITNESS the due execution of this Master Rental Agreement for Bare
Rental Equipment, intending to be legally bound hereby, as of the date first set
forth above.
10
<PAGE>
Signed this 25th day of July, 1996
ATTEST: ANTHONY CRANE SALES & LEASING, L.P.
___________________________ By: /s/ Ray G. Anthony
-------------------------------
Name: Ray G. Anthony
Title: CEO
ATTEST: HESS OIL VIRGIN ISLANDS, CORP.
___________________________ By: _______________________________
Name:
Title:
11
<PAGE>
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED JUNE ENDED JUNE YEAR ENDED DECEMBER 31,
30, 30, -------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income
taxes.................. $10,329 $12,223 $23,897 $15,898 $14,711 $10,163 $ 8,361
Interest expense........ 8,620 6,238 13,692 10,873 8,482 6,281 3,961
Interest portion of
rental expense......... 838 877 1,743 589 364 44 55
------- ------- ------- ------- ------- ------- -------
Total earnings......... $19,787 $19,338 $39,332 $27,360 $23,557 $16,488 $12,377
======= ======= ======= ======= ======= ======= =======
Fixed Charges:
Interest expense........ $ 8,620 $ 6,238 $13,692 $10,873 $ 8,482 $ 6,281 $ 3,961
Interest portion of
rental expense......... 838 877 1,743 589 364 44 55
------- ------- ------- ------- ------- ------- -------
Total fixed charges.... $ 9,458 $ 7,115 $15,435 $11,462 $ 8,846 $ 6,325 $ 4,016
======= ======= ======= ======= ======= ======= =======
Ratio of earnings to
fixed charges.......... 2.1x 2.7x 2.5x 2.4x 2.7x 2.6x 3.1x
</TABLE>
1
<PAGE>
EXHIBIT 21.1
List of Subsidiaries
Anthony Crane Capital Corporation
Anthony Crane Sales & Leasing, L.P.
Anthony Crane International, L.P.
Anthony International Equipment Services Corporation
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Registration statement on Form S-4 of
our report dated February 25, 1998, on our audits of the consolidated
financial statements and financial statement schedule of Anthony Crane Rental,
L.P. and subsidiaries as of December 31, 1997 and 1996 and for each of the
three years in the period ended December 31, 1997. We also consent to the
reference to our firm under the captions "Experts" and "Selected Historical
Consolidated Financial Data."
/s/ PricewaterhouseCoopers LLP
Pittsburgh, PA
September 29, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF ANTHONY CRANE RENTAL, L.P. AND SUBSIDIARIES
AS OF AND FOR THE PERIODS ENDED JUNE 30, 1998 AND DECEMBER 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001070316
<NAME> ANTHONY CRANE RENTAL HOLDINGS, L.P.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR
<FISCAL-YEAR-END> JUN-30-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> JUN-30-1998 DEC-31-1997
<CASH> 2,217 4,375
<SECURITIES> 0 0
<RECEIVABLES> 28,837 25,992
<ALLOWANCES> (2,397) (1,840)
<INVENTORY> 0 0
<CURRENT-ASSETS> 32,461 38,738
<PP&E> 403,018 361,771
<DEPRECIATION> 101,982 96,937
<TOTAL-ASSETS> 338,700 306,928
<CURRENT-LIABILITIES> 26,640 25,576
<BONDS> 211,822 178,367
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 98,665 101,416
<TOTAL-LIABILITY-AND-EQUITY> 338,700 306,928
<SALES> 99,549 183,808
<TOTAL-REVENUES> 99,549 183,808
<CGS> 61,727 112,577
<TOTAL-COSTS> 61,727 112,577
<OTHER-EXPENSES> 18,873 33,372
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 8,620 13,962
<INCOME-PRETAX> 10,329 23,897
<INCOME-TAX> 60 96
<INCOME-CONTINUING> 10,269 23,801
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 10,269 23,801
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
