<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 26, 1994
WYMAN-GORDON COMPANY
(Exact name of registrant as specified in its charter)
MASSACHUSETTS
(State or other jurisdiction of incorporation)
0-3085 04-1992780
Commission File Number (IRS Employer Identification No.)
244 Worcester Street, Box 8001, No. Grafton, MA 01536-8001
(Address of principal executive offices) (Zip Code)
(508) 839-4441
Registrant's Telephone Number
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Item 2. Acquisition or Disposition of Assets.
On May 26, 1994, Wyman-Gordon Company, a Massachusetts
corporation (the "Company"), completed the acquisition (the
"Acquisition") of all of the outstanding stock of Cameron Forged
Products Company ("Cameron") from Cooper Industries, Inc.
("Cooper"), pursuant to an Amended and Restated Stock Purchase
Agreement, dated as of January 10, 1994 (the "Stock Purchase
Agreement"), and an Investment Agreement, dated as of January 10,
1994 (the "Investment Agreement").
Pursuant to the Stock Purchase Agreement, the Company paid to
Cooper a purchase price, which was determined through negotiations
between the Company and Cooper, of (i) 16,500,000 shares of common
stock, par value $1.00 per share (the "Shares"), of the Company and
(ii) $5,000,000 in cash, payable as set forth below (the "Cash
Purchase Price"), subject to a cash adjustment to be paid by either
Cooper or the Company based upon changes in certain assets and
liabilities of Cameron between September 26, 1993 and the closing
of the Acquisition (the "Closing"). The Cash Purchase Price
consisted of (i) $400,000 in cash obtained by the Company from its
cash on hand and paid to Cooper at the Closing and (ii) a
promissory note of the Company in the principal amount of
$4,600,000 (the " Cameron Note"), payable in annual installments,
beginning on June 30, 1997 and on each June 30 thereafter until
paid in full, in an amount equal to the least of (A) $2,300,000,
(B) 25% of the Company's Free Cash Flow (as defined in the Cameron
Note) for the twelve-month period ending on the April 30
immediately preceding such June 30 or (C) the unpaid principal
balance of the Cameron Note. The Cameron Note does not bear
interest, except that it will bear interest from and after May 1,
1998 at a floating rate equal to the 90-day commercial paper rate
for high grade unsecured notes sold through dealers by major
corporations, as published by The Wall Street Journal, on that
portion of the principal amount of the Note equal to the sum of all
amounts of unpaid principal that would have been payable but for
mandatory debt payments by the Company. As a result of the
Acquisition, Cooper currently owns approximately 48% of the
outstanding Shares.
The Investment Agreement governs certain aspects of the
relationship between the Company and Cooper. Under the Investment
Agreement, Cooper has agreed to certain restrictions on its ability
to vote its Shares and to acquire additional Shares and other
voting securities of the Company. Cooper is entitled to two
representatives on the Company's board of directors. However,
Cooper has agreed that it will not acquire additional Company
securities for so long as it owns 5% or more the Shares. Cooper
has also agreed that, so long as it owns 5% or more of the Shares,
it will vote its Shares on all matters submitted to a shareholder
vote, at its option, either as recommended by the Company's board
of directors or proportionately with the public shareholders.
Certain other provisions will also apply. These restrictions on
Cooper will expire on May 26, 2004, or earlier in certain events,
such as if the Company's consolidated net worth declines by 35% or
more following consummation of the acquisition or if the Company
consummates a merger or similar transaction that results in a
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change of control of the Company. Pursuant to the Stock Purchase
Agreement, effective on May 26, 1994, the size of the Board of
Directors of the Company was increased by two members and Dewain K.
Cross, Vice President, Finance of Cooper, and H. John Riley, Jr.,
President and Chief Operating Officer of Cooper, were appointed to
fill the vacancies created by such expansion.
Cameron and its subsidiaries operate forging facilities in
Houston, Texas and Livingston, Scotland, as well as a powder metal
operation in Brighton, Michigan. The Company intends to integrate
Cameron's operations with the forgings business of the Company.
The foregoing descriptions of the Stock Purchase Agreement and
the Investment Agreement are incomplete and are qualified in their
entirety by reference to the full text of the Stock Purchase
Agreement and the Investment Agreement, which are attached hereto
as exhibits and are incorporated herein by reference.
Item 5. Other Events.
10 % Senior Notes due 2003: Supplemental Indenture
Effective May 20, 1994, the Company entered into a
Supplemental Indenture with the holders of its outstanding 10 %
Senior Notes due 2003 (the "Notes"). The Supplemental Indenture
amends the Indenture, dated as of March 16, 1993, by and among the
Company, the Subsidiary Guarantors and State Street Bank and Trust
Company as Trustee (the "Indenture") as follows:
* The definition which sets forth the exceptions to the
general limitation on the Company's ability to incur
additional indebtedness was amended to permit the Company
to make the deferred payments to Cooper under the Cameron
Note.
* The definition of restricted payments, which restricts
investments by the Company, was amended to permit the
Acquisition and the establishment of the Receivables
Financing Program as described below, along with other
amendments to permit the Company to manage its cash,
hedge its interest rate, currency and raw materials risks
and capitalize subsidiaries (including Wyman-Gordon
Receivables Corporation, a special purpose wholly-owned
subsidiary of the Company formed to carry out the
Receivables Financing Program ("WGRC")).
* The definition of permitted liens was expanded to permit
the pledge of collateral by Wyman-Gordon Limited
(formerly CFPD, Ltd.) (the "U.K. Subsidiary") to a new
U.K. lender.
* An exception for WGRC is made from the covenant which
would otherwise require WGRC to guarantee the Notes. As
a limited purpose financing subsidiary, WGRC would be
unable to retain the necessary degree of financial
independence from the general obligations of the Company
if it were required to guarantee the Notes.
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<PAGE> 4
* Other amendments were made to various Indenture covenants
to permit the Acquisition, the Receivables Financing
Program and the U.K. Subsidiary financing.
The foregoing description of the Supplemental Indenture is
incomplete and is qualified in its entirety by reference to the
full text of the Supplemental Indenture, which is attached hereto
as an exhibit and is incorporated herein by reference.
10 % Senior Notes due 2003: Second Supplemental Indenture
The U.K. Subsidiary entered into a financing agreement with
Clydesdale Bank PLC as of May 27, 1994 under which it pledged
certain of its assets as security. Accordingly, under the terms of
the Indenture, the U.K. Subsidiary was required to execute a
guaranty of the Notes. Such guaranty was effected through a
Second Supplemental Indenture and Guarantee dated as of May 27,
1994 which is attached hereto as an exhibit and is incorporated
herein by reference.
Receivables Financing Program
On May 20, 1994, the Company terminated its existing working
capital financing arrangement with the CIT Group/Business Credit,
Inc. under a Financing Agreement dated March 8, 1993 (the "Prior
Working Capital Facility"). The Company replaced the Prior Working
Capital Facility by entering into a revolving receivables-backed
credit facility (the "Receivables Financing") effected through a
Receivables Purchase and Sale Agreement dated as of May 20, 1994
among the Company, Wyman-Gordon Investment Castings, Inc. and
Precision Founders, Inc. and WGRC (the "RPSA") and a Revolving
Credit Agreement dated as of May 20, 1999 among WGRC, the financial
institutions party thereto and Shawmut Bank N.A. as Issuing Bank,
as Facility Agent and as Collateral Agent (the "RCA"). It is
anticipated that Cameron will become a part of the Receivables
Financing Program approximately 90 days after the date of the
Acquisition. Pursuant to the RPSA, WGRC purchases the U.S. dollar-
denominated trade receivables of the Company and certain
subsidiaries on a daily basis, and WGRC pays cash for such
purchased receivables to the Company or such subsidiaries either
out of its available cash from receivables collections or from
borrowings under the RCA. Pursuant to the RCA, a syndicate of
lenders makes revolving loans to WGRC and issues letters of credit
to beneficiaries designated by WGRC, in each case secured by the
receivables purchased by WGRC. Following is a brief summary of the
terms of the Receivables Financing Program.
The aggregate maximum borrowing capacity under the Receivables
Financing Program is $65 million, with a letter of credit sub-
maximum of $35 million. Utilization of the maximum program amount
would be subject to a formula which is dependent upon a number of
reserves and adjustments relating to the accounts receivable
purchased by WGRC. The Receivables Financing Program is rated
"AAA" by Standard & Poor's Corporation. Borrowings under the
Receivables Financing Program bear interest at either the
Eurodollar Rate plus five-eighths of one percent (0.625%) or at an
Alternative Base Rate which is a fluctuating rate per annum on any
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date equal to the higher of (i) the rate of interest most recently
publicly announced by the Facility Agent as its "prime,"
"reference" or "base" rate and (ii) a rate of interest equal to the
sum of (A) the Federal Funds Rate, plus (B) 0.50%. Fees for
letters of credit are five-eighths of one percent (0.625%) per
annum. Additionally, a fee of four-tenths of percent (0.40%) per
annum is charged for unused borrowing capacity. The term of the
Receivables Financing Program is 58 months, with an evergreen
option feature.
WGRC is organized as a bankruptcy-remote, limited purpose
subsidiary of the Company. On May 20, 1994 and each day thereafter
during the term of the Receivables Financing Program, WGRC
purchases all of the U.S. dollar-denominated trade receivables of
the Company and of the two subsidiaries comprising the Company's
castings operations (collectively, the "Sellers"). It is intended
that Cameron will be added as a Seller. The purchase price for the
receivables will be paid by WGRC through collections on previously-
purchased receivables, intercompany notes issued by WGRC or
borrowings by WGRC under the revolving credit facility.
The Receivables Financing Program is secured by a first
priority security interest in all receivables purchased by WGRC
from the Sellers. The Receivables Financing Program is not
subject to financial or periodic maintenance covenants.
The foregoing summary of the terms of the Receivables
Financing Program is incomplete and is qualified in its entirety by
reference to the full text of the RCA and the RPSA, which are
attached hereto as exhibits and are incorporated herein by
reference.
Employment Arrangements
David P. Gruber became Chief Executive Officer of the Company
immediately following the Special Meeting in Lieu of Annual Meeting
of Shareholders held on May 24, 1994. In connection with Mr.
Gruber's new responsibilities, the Company has entered into a two-
year employment agreement with him providing certain termination
payments if he is terminated by the Company without cause or if he
leaves the Company for good reason. In addition, the Company
entered into a Performance Share Agreement with Mr. Gruber pursuant
to which he has been issued 150,000 shares of common stock of the
Company subject to restrictions and risk of forfeiture. The
restrictions on some or all of Mr. Gruber's shares will lapse if
(i) he is still employed by the Company as Chief Executive Officer
five years from the date of the agreement and (ii) the market value
of the Company's stock achieves certain targeted levels. In
addition, the Performance Share Agreement contains provisions
providing for partial vesting in the case of his death and
restrictions on transfer of a portion of such shares after the
restrictions lapse.
On March 4, 1994, the Company employed J. Douglas Whelan as
President, Forgings Division. In connection with the employment of
Mr. Whelan, the Company has entered into an employment agreement
with him that provides, among other things, for an annual salary of
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$204,000, a signing bonus of $50,000, participation in the
incentive compensation plan being designed for key Cameron and
Wyman-Gordon Company employees who will be responsible for
implementing the consolidation of the Company and Cameron, which
incentive compensation plan in the case of Mr. Whelan will pay out
at 2 1/2 times base salary if $30 million of annual cost savings
are achieved by the end of the second year following the Cameron
acquisition. In addition, Mr. Whelan has received an option to
purchase 75,000 shares under the Company's Long-Term Incentive Plan
and has entered into an Executive Severance Agreement in the
standard form as other executive officers.
The foregoing summary of the terms of employment arrangements
with Messrs. Gruber and Whelan is incomplete and is qualified in
its entirety by reference to the full text of the Employment
Agreement dated May 24, 1994 between Mr. Gruber and the Company,
the Performance Share Agreement dated May 24, 1994 between Mr.
Gruber and the Company, the Employment Agreement dated March 4,
1994 between Mr. Whelan and the Company and the Severance Agreement
dated as of May 1, 1994 between Mr. Whelan and the Company, which
are attached hereto as exhibits and are incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
Attached hereto as Annex I are financial statements of Cameron
for the periods specified in Rule 3-05(b) of Regulation S-X, along
with a report of Ernst & Young, independent auditors, thereon.
(b) Pro Forma Financial Statements.
Attached hereto as Annex II are the pro forma financial
statements required pursuant to Article 11 of Regulation S-X.
(c) Exhibits
The following exhibits are filed herewith:
Exhibit No. Description
1 Amended and Restated Stock Purchase Agreement,
dated as of January 10, 1994, between the Company
and Cooper.
2 Investment Agreement, dated as of January 10, 1994,
between the Company and Cooper.
3 Press release issued on by the Company on May 26,
1994.
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Exhibit No. Description
4 Amendment dated May 26, 1994 to Investment
Agreement dated as of January 10, 1994, between the
Company and Cooper.
5 10 % Senior Notes due 2003 Supplemental Indenture
dated May 19, 1994.
6 10 % Senior Notes due 2003 Second Supplemental
Indenture and Guarantee dated May 27, 1994.
7 Revolving Credit Agreement dated as of May 20, 1994
among Wyman-Gordon Receivables Corporation, the
Financial Institutions Parties Hereto and Shawmut
Bank N.A. as Issuing Bank, as Facility Agent and as
Collateral Agent.
8 Receivables Purchase and Sale Agreement dated as of
May 20, 1994 among Wyman-Gordon Company, Wyman-
Gordon Investment Castings, Inc. and Precision
Founders Inc. as the Sellers, Wyman-Gordon Company
as the Servicer and Wyman-Gordon Receivables
Corporation as the Purchaser.
9 Employment Agreement effective March 24, 1994
between Wyman-Gordon Company and David P. Gruber.
10 Employment Agreement effective March 4, 1994
between Wyman-Gordon Company and J. Douglas Whelan.
11 Performance Share Agreement under the Wyman-Gordon
Company Long-Term Incentive Plan between the
Company and David P. Gruber dated as of May 24,
1994.
12 Executive Severance Agreement between the Company
and J. Douglas Whelan dated as of May 1, 1994.
Item 8. Change in Fiscal Year
On May 24, 1994, the Company's Board of Directors voted to
change the Company's fiscal year-end from one which ended on
December 31 to one which ends on the Saturday nearest to May 31.
Accordingly, the Company plans to file a Form 10-Q for the five
month transition period ended May 28, 1994.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
Wyman-Gordon Company
Date: 6/8/94 By: /s/ Luis E. Leon
Luis E. Leon
Vice President, Chief Financial
Officer and Treasurer
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<TABLE>
ANNEX I
INDEX TO FINANCIAL STATEMENTS
<CAPTION>
PAGE
<S> <C>
CAMERON FORGED PRODUCTS DIVISION
Combined Results of Operations for the Three
Months Ended March 31, 1993 and 1994 (unaudited) Q-1
Combined Balance Sheet as of March 31, 1994 and 1993
(unaudited) Q-2
Combined Cash Flows for the Three Months Ended
March 31, 1993 and 1994 (unaudited) Q-3
Notes to Combined Financial Statements (unaudited) Q-4
Report of Independent Auditors F-1
Combined Results of Operations for the Years
Ended December 31, 1991, 1992 and 1993 F-2
Combined Balance Sheets as of December 31, 1992
and 1993 F-3
Combined Cash Flows for the Years Ended December 31,
1991, 1992 and 1993 F- 4
Notes to Combined Financial Statements F-5
</TABLE>
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<TABLE>
CAMERON FORGED PRODUCTS DIVISION
COMBINED RESULTS OF OPERATIONS
<CAPTION>
Three Months Ended March 31,
1993 1994
(000's omitted)
(Unaudited)
<S> <C> <C>
Revenues $37,371 $38,836
Costs and expenses
Cost of goods sold 33,402 34,134
Selling, general and administrative
expenses 2,992 2,731
Depreciation and amortization 1,841 2,138
38,235 39,003
Loss before income taxes (864) (167)
Income tax benefit 82 122
Net loss $ (782) $ (45)
</TABLE>
The accompanying Notes to Combined Financial Statements
are an integral part of these financial statements.
Q-1<PAGE>
<PAGE> 11
<TABLE>
CAMERON FORGED PRODUCTS DIVISION
COMBINED BALANCE SHEET
<CAPTION>
March 31,
1993 1994
(000's omitted)
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Receivables $ 31,474 $ 33,076
Inventories 59,071 50,490
Other 353 389
Total current assets 90,898 83,955
Plant and equipment, at cost less
accumulated depreciation 62,452 60,018
Intangibles, less accumulated
amortization 2,315 2,137
Pension assets 9,060 8,546
Other assets 767 105
$165,492 $154,761
LIABILITIES AND NET ASSETS
Current liabilities:
Accounts payable and accrued liabilities $ 45,827 $ 33,234
Loss on long-term contracts and
agreements - 15,200
Deferred income taxes 11,357 9,147
Total current liabilities 57,184 57,581
Postretirement benefits other than
pensions 12,141 12,159
Pension liability - 10,946
Deferred income taxes 4,227 4,293
Net assets 91,940 69,782
$165,492 $154,761
</TABLE>
The accompanying Notes to Combined Financial Statements
are an integral part of these financial statements.
Q-2<PAGE>
<PAGE> 12
<TABLE>
CAMERON FORGED PRODUCTS DIVISION
COMBINED CASH FLOWS
<CAPTION>
Three Months Ended March 31,
1993 1994
(000's omitted)
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (782) $ (45)
Adjustments to reconcile net loss
to net cash provided by (used
for) operating activities:
Depreciation 1,647 1,953
Amortization 194 185
Deferred income taxes (82) (122)
Changes in assets and liabilities:(1)
Receivables (8,103) (7,268)
Inventories 5,288 4,112
Accounts payable and accrued
liabilities (4,178) (2,260)
Other assets and liabilities, net 519 (169)
Net cash provided by (used for)
operating activities (5,497) (3,614)
INVESTING ACTIVITIES:
Capital expenditures (2,887) (1,848)
Proceeds from sales of plant and
equipment 453 447
Net cash used for investing
activities (2,434) (1,401)
FINANCING ACTIVITIES:
Transferred (to) from Cooper 8,144 5,176
Net cash provided by (used for)
financing activities 8,144 5,176
Effect of translation on cash (213) (161)
Increase (decrease) in cash retained by
Cameron - -
Cash retained by Cameron, beginning of
period - -
Cash retained by Cameron, end of period $ - $ -
<FN>
(1) Net of the effects of translation.
</TABLE>
The accompanying Notes to Combined Financial Statements
are an integral part of these financial statements.
Q-3<PAGE>
<PAGE> 13
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STAETMENTS
(Unaudited)
A. INTERIM FINANCIAL DATA
The financial information presented as of March 31, 1993 and
1994 and for the three months ended March 31, 1993 and 1994
has been prepared from the books and records without audit.
In the opinion of management, all adjustments, consisting of
only normal recurring adjustments, necessary for a fair
statement of the financial information for the periods
indicated have been included.
<TABLE>
B. NET ASSETS
Changes in net assets during the three months ended March 31,
1993 and 1994 were as follows:
<CAPTION>
Trans-
lation Minimum
Adjust- Pension
Total ment Liability Other
(000's omitted)
<S> <C> <C> <C> <C>
Balance at
December 31, 1992 $86,153 $(1,511) $ - $87,664
Translation adjustment (1,575) (1,575) - -
Cash flow provided by
Cooper 8,144 - - 8,144
Net (loss) (782) - - (782)
Balance at March 31, 1993 $91,940 $(3,086) $ - $95,026
Balance at
December 31, 1993 $64,449 $(2,812) $(10,946) $78,207
Translation adjustment 202 202 - -
Cash flow provided by
Cooper 5,176 - - 5,176
Net (loss) (45) - - (45)
Balance at March 31, 1994 $69,782 $(2,610) $(10,946) $83,338
</TABLE>
Q-4 <PAGE>
<PAGE> 14
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Cooper Industries, Inc.
We have audited the accompanying combined balance sheets of
Cameron Forged Products Division (a division of Cooper Industries,
Inc.) as of December 31, 1992 and 1993, and the related statements
of combined results of operations and combined cash flows for each
of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
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.
Cameron Forged Products Division is a part of Cooper
Industries, Inc. and has no separate legal status or existence.
Transactions with Cooper Industries, Inc. are described in Note N.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the combined financial
position of Cameron Forged Products Division at December 31, 1992
and 1993, and the combined results of their operations and their
cash flows for the three years in the period ended December 31,
1993 in conformity with generally accepted accounting principles.
As discussed in Note C, in 1992 the Company changed its
methods of accounting for postretirement benefits other than
pensions, income taxes and postemployment benefits.
ERNST & YOUNG
Houston, Texas
February 28, 1994
F-1<PAGE>
<PAGE> 15
<TABLE>
CAMERON FORGED PRODUCTS DIVISION
COMBINED RESULTS OF OPERATIONS
<CAPTION>
Year Ended December 31,
1991 1992 1993
(000's omitted)
<S> <C> <C> <C>
Revenues $198,937 $174,334 $149,534
Costs and expenses
Cost of goods sold 164,134 149,222 135,686
Selling, general and administrative
expenses 13,498 12,893 11,904
Depreciation and amortization 6,247 6,982 8,902
Loss on long-term contracts and
agreements - - 15,200
Nonrecurring income - (2,300) -
183,879 166,797 171,692
Income (loss) before income taxes
and cumulative effect of changes
in accounting principles 15,058 7,537 (22,158)
Income tax (expense) benefit (6,936) (2,995) 2,104
Income (loss) before cumulative
effect of changes in accounting
principles 8,122 4,542 (20,054)
Cumulative effect on prior years
of changes in accounting
principles - (14,097) -
Net income (loss) $ 8,122 $ (9,555) $(20,054)
</TABLE>
The accompanying Notes to Combined Financial Statements
are an integral part of these financial statements.
F-2<PAGE>
<PAGE> 16
<TABLE>
CAMERON FORGED PRODUCTS DIVISION
COMBINED BALANCE SHEETS
<CAPTION>
December 31,
1992 1993
(000's omitted)
<S> <C> <C>
ASSETS
Current assets:
Receivables $ 23,489 $ 25,710
Inventories 64,584 54,493
Other 350 58
Total current assets 88,423 80,261
Plant and equipment, at cost less
accumulated depreciation 62,976 60,687
Intangibles, less accumulated amortization 2,330 1,998
Pension assets 9,252 8,550
Other assets 869 344
$163,850 $151,840
LIABILITIES AND NET ASSETS
Current liabilities:
Accounts payable and accrued liabilities $ 50,122 $ 35,442
Loss on long-term contracts and
agreements - 15,200
Deferred income taxes 11,417 9,437
Total current liabilities 61,539 60,079
Postretirement benefits other than
pensions 11,424 12,241
Pension liability - 10,946
Deferred income taxes 4,249 4,125
Other long-term liabilities 485 -
Net assets 86,153 64,449
$163,850 $151,840
</TABLE>
The accompanying Notes to Combined Financial Statements
are an integral part of these financial statements.
F-3<PAGE>
<PAGE> 17
<TABLE>
CAMERON FORGED PRODUCTS DIVISION
COMBINED CASH FLOWS
<CAPTION>
Year Ended December 31,
1991 1992 1993
(000's omitted)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 8,122 $ (9,555) $(20,054)
Adjustments to reconcile net income
(loss) to net cash provided by
(used for) operating activities:
Depreciation 5,670 6,278 7,779
Amortization 577 704 1,123
LIFO provision 1,465 1,507 1,497
Loss on long-term contracts and
agreements - - 15,200
Non-recurring income - (2,300) -
Deferred income taxes 3,022 2,995 (2,104)
Cumulative effect of changes in
accounting principles - 14,097 -
Changes in assets and liabilities:(1)
Receivables 5,226 7,938 (2,351)
Inventories 11,449 7,006 8,399
Accounts payable and accrued
liabilities (6,948) (16,080) (14,561)
Other assets and liabilities, net (73) (785) 2,645
Net cash provided by (used for)
operating activities 28,510 11,805 (2,427)
INVESTING ACTIVITIES:
Capital expenditures (20,846) (27,665) (9,201)
Proceeds from sales of plant and
equipment 554 396 1,120
Net cash used for investing
activities (20,292) (27,269) (8,081)
FINANCING ACTIVITIES:
Transferred (to) from Cooper (8,243) 14,359 10,597
Net cash provided by (used for)
financing activities (8,243) 14,359 10,597
Effect of translation on cash 25 1,105 (89)
Increase (decrease) in cash retained by
Cameron - - -
Cash retained by Cameron, beginning of
year - - -
Cash retained by Cameron, end of year $ - $ - $ -
<FN>
(1) Net of the effects of translation, non-recurring income and
the cumulative effect of changes in accounting principles.
</TABLE>
The accompanying Notes to Combined Financial Statements
are an integral part of these financial statements.
F-4<PAGE>
<PAGE> 18
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS
A. CAMERON FORGED PRODUCTS DIVISION
The accompanying combined financial statements reflect the
operations of the Cameron Forged Products Division ("Cameron") of
Cooper Industries, Inc. ("Cooper"). The combined operations include
Cameron Forged Products Company, a wholly owned U.S. subsidiary of
Cooper, which owns and operates the U.S. forging operations, the
United Kingdom forging operations, which are owned and operated by
a Cooper subsidiary, Cooper Great Britain, and Cameron Pipeline,
Inc., an inactive U.S. subsidiary. CFPD, Ltd., a wholly-owned
subsidiary of Cameron Forged Products Company purchased the United
Kingdom forging operations from Cooper Great Britain in February
1994.
The Cameron Forged Products Division was acquired by Cooper as
part of its acquisition of Cameron Iron Works, Inc. in November
1989. This acquisition was accounted for by Cooper as a purchase
business combination with resulting adjustment of historical asset
and liability amounts to estimated fair market values as of the
acquisition date. Because at the time of acquisition it was
Cooper's intention to divest the acquired forging operations, the
net assets, primarily plant and equipment, were written-down to an
anticipated sales value and none of the goodwill recorded in
connection with the overall acquisition of Cameron Iron Works, Inc.
was allocated to the Cameron Forged Products Division. The Cameron
Forged Products Division is hereinafter referred to as "Cameron."
Cameron operates in one business segment -- forged products.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION The accompanying combined financial
statements include the accounts of Cameron as described above.
These statements are presented as if Cameron had existed as an
entity separate from its parent, Cooper, during the periods
presented and include the assets, liabilities, revenues and
expenses that are directly related to Cameron's operations. All
transactions between Cameron U.S. and U.K. operations have been
eliminated. Because Cameron's operations were included in the
consolidated financial statements of Cooper on a divisional basis,
there are no separate meaningful historical equity accounts for
Cameron. Additionally, amounts of general corporate accounting,
tax, legal and other administrative costs that are not directly
attributable to the operations of Cameron have been allocated to
Cameron based on a ratio of Cameron's revenues to the consolidated
revenues of Cooper. Management believes that this allocation method
provides Cameron with a reasonable amount of such expenses. The
difference for each of the years presented between the general and
administrative expenses calculated utilizing the allocation method
described above and the actual cost of such expenses which Cameron
anticipates it would have incurred on a stand alone basis is not
material. Cash and debt management are totally centralized
functions within Cooper's divisional management structure. As a
result, there is no practical or logical basis on which to allocate
debt and related interest expense to Cameron. The financial
information included herein may not necessarily be indicative of
F-5<PAGE>
<PAGE> 19
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the financial position, results of operations or cash flows of
Cameron in the future or what statements of financial position,
results of operations or cash flows of Cameron would have been if
it was a separate, stand-alone company during the periods
presented.
REVENUE RECOGNITION Sales, including sales under long-term
contracts, are recorded when the goods are shipped to the customer.
LONG-TERM CONTRACTS AND AGREEMENTS Anticipated losses with
respect to long-term contracts, including long-term pricing
agreements, are recorded when available information indicates that
the sales price is less than a fully allocated cost projection.
RESEARCH AND DEVELOPMENT Costs for research and development
are expensed as incurred and were $1,800,000, $2,900,000 and
$1,800,000 for the years ended December 31, 1991, 1992 and 1993,
respectively.
INVENTORIES Inventories are carried at cost or, if lower, net
realizable value. On the basis of current costs, 70% of inventories
in 1992 and 72% in 1993 are carried on the last-in, first-out
(LIFO) method. The remaining inventories are carried on the
first-in, first-out (FIFO) method.
PLANT AND EQUIPMENT Depreciation is provided over the
estimated useful lives of the related assets using primarily the
straight-line method. This method is applied to group asset
accounts which in general have the following lives: buildings -- 10
to 40 years; machinery and equipment -- 8 to 12 years; and tooling,
dies, patterns, etc. -- 3 to 7 years.
INTANGIBLES Intangibles consist primarily of software which
is being amortized over its estimated useful life -- generally five
years.
INCOME TAXES Income taxes are provided as if operations in
all countries including the U.S. were stand-alone businesses filing
separate tax returns. For the years 1992 and 1993, Cameron has
determined tax expense and other deferred tax information in
compliance with Statement of Financial Accounting Standards (SFAS)
No. 109 (Accounting for Income Taxes). Prior years have not been
restated and accordingly reflect the procedures required by
Accounting Principles Board Opinion No. 11 -- Accounting for Income
Taxes, as amended.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS For the years
1992 and 1993, Cameron has determined the accounting effect of
postretirement benefits other than pensions (primarily retiree
medical costs) in accordance with the provisions of SFAS No. 106
(Employer's Accounting for Postretirement Benefits Other Than
Pensions). Such benefits in years prior to 1992 were accounted for
on a partial accrual method.
F-6<PAGE>
<PAGE> 20
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
POSTEMPLOYMENT BENEFITS For the years 1992 and 1993, Cameron
has accounted for the benefits payable to employees when they leave
Cameron other than by reason of retirement in accordance with the
provisions of SFAS No. 112 (Employers' Accounting for
Postemployment Benefits). Except for an actuarial determination of
the termination benefits payable to domestic salaried employees,
Cameron's accounting in years prior to 1992 was the same as that
required by SFAS No. 112.
ENVIRONMENTAL REMEDIATION AND COMPLIANCE Environmental
remediation costs are accrued, except to the extent costs can be
capitalized, based on estimates of known environmental remediation
exposures. Environmental compliance costs include maintenance and
operating costs with respect to pollution control facilities, cost
of ongoing monitoring programs and similar costs. Such costs are
expensed as incurred. Capitalized environmental costs are
depreciated generally utilizing a 15-year life and had a net book
value of $400,000 and $300,000 at December 31, 1992 and 1993,
respectively.
EARNINGS PER SHARE Earnings per share have been omitted from
the combined statement of results of operations since Cameron was
an operating division of Cooper with no meaningful equity
securities outstanding.
FOREIGN CURRENCY TRANSLATION The local currency is the
functional currency for the foreign operation and, as such, assets
and liabilities are translated into U.S. dollars at year-end
exchange rates. Income and expense items are translated at average
exchange rates during the year. Translation adjustments resulting
from changes in exchange rates are reported as a component of net
assets.
C. CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1992, Cameron adopted the following
accounting standards:
SFAS NO. 106 -- EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT
BENEFITS OTHER THAN PENSIONS This standard provides that Cameron
follow an accrual method of accounting for the benefits other than
pensions (primarily health-care costs) provided to employees after
retirement. The results of operations for the first quarter of 1992
include a charge of $9,922,000 for the immediate recognition of the
net transition obligation with respect to benefits earned by active
and retired employees prior to January 1, 1992. Additionally,
1992's ongoing postretirement costs have been recorded based on the
required actuarially determined accrual method as opposed to
Cameron's previous partial accrual method of accounting for such
costs. The effect, excluding the effect of a September 1992
curtailment gain, was to decrease 1992 full-year earnings by
$1,200,000. The remaining disclosure information required by SFAS
No. 106 is set forth in Note J of the Notes to Combined Financial
Statements.
F-7<PAGE>
<PAGE> 21
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
C. CHANGES IN ACCOUNTING PRINCIPLES (CONTINUED)
SFAS NO. 109 -- ACCOUNTING FOR INCOME TAXES This standard
requires a liability as opposed to a deferred method of accounting
for income taxes. The results of operations for the first quarter
of 1992 include a net tax charge of $3,545,000 to reflect the
cumulative effect of adopting this pronouncement. This charge
primarily resulted from the establishment of a valuation allowance
for the pre-adoption deferred tax assets.
Income tax expense and certain other adjustments for 1992 and
1993 have been determined in accordance with the provisions of the
new standard. The 1992 effect was to decrease pre-tax income by
$400,000 for higher depreciation expense on fixed asset values
previously recorded net of tax and to increase tax expense by
$1,500,000 to reflect the absence of the tax benefits with respect
to fair market value depreciation reductions previously treated as
permanent differences. The remaining disclosure information
required by SFAS No. 109 is set forth in Note M of the Notes to
Combined Financial Statements.
SFAS NO. 112 -- EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT
BENEFITS This standard provides that Cameron follow an accrual
method of accounting for the benefits payable to employees when
they leave Cameron other than by reason of retirement. Since most
of these benefits were already accounted for by Cameron on an
accrual method, this new standard has a relatively small cumulative
effect -- $630,000 and a negligible effect on 1992's earnings.
In addition, in 1992, Cameron changed its accounting policy
with respect to the valuation of scrap. Certain of the forgings
which Cameron produces utilize nickel as a component material.
When, during the normal production process, Cameron produces scrap
that includes nickel, the scrap is carefully controlled so that the
nickel may be recovered. In 1992, as management became aware of the
increasing amount of nickel on hand within the business, the
accounting policy of Cameron was changed to value instead of
expense the nickel in order to provide greater financial control
over this asset. The financial statements for prior years have
been restated to reflect this change in the accounting policy.
D. NONRECURRING INCOME
Cameron's 1992 results include $2,300,000 of income resulting
from the reversal of vacation accruals due to a change in Cameron's
vacation policy which resulted in the elimination of carryover
vacation rights. The change in the vacation policy was announced in
1992. A portion of the income, $900,000, related to salaried
employees and was recorded in the second quarter of 1992. The
remainder, with respect to hourly employees, was recorded in the
third quarter of 1992 when the change was approved by the hourly
union.
F-8<PAGE>
<PAGE> 22
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
E. LOSS ON LONG-TERM CONTRACTS AND AGREEMENTS
Starting in the latter part of 1992 and continuing into 1993,
Cameron has experienced extreme pricing pressure from its major
customers, who in turn have been under pressure from their major
airline customers as well as continuing cutbacks from the U.S.
military. This pressure, combined with large amounts of
industry-wide excess forging capacity have caused Cameron's margins
to decline faster than Cameron can adjust its fixed and semi-fixed
period costs. In an effort to keep its operations functioning with
the highest possible utilization and corresponding efficiency
levels, Cameron has increasingly accepted orders with lower gross
profit levels and also in the second quarter of 1993 entered into
three-year pricing agreements with two of its major customers.
Since the time when the original terms of these agreements were
negotiated, the delivery dates have been steadily pushed into the
future, exacerbating the current utilization problem.
In accordance with Cameron's policy of accruing for losses on
backlog and long-term pricing agreements, when available
information indicates that a material loss will be incurred when
the goods are delivered pursuant to the commitments, a loss accrual
of $15,200,000 was provided in connection with the preparation of
Cameron's financial statements for the third quarter ended
September 30, 1993.
Of the total accrual, approximately $10,000,000 relates to
committed backlog and $5,000,000 relates to the three-year pricing
agreements. Virtually all of the anticipated loss is with respect
to Cameron's operations in the United States as opposed to the
United Kingdom. The calculations were based on the anticipated
revenues and fully allocated operating costs for Cameron for the
year 1994. Deliveries from the backlog extend into 1995, while the
pricing agreements continue until 1996. While some portion of the
$15,200,000 may have been calculable as of an earlier date in 1993,
quantities under the long-term agreements were not sufficiently
quantifiable prior to the third quarter to permit accrual at an
earlier date. In addition, lower volume levels anticipated during
the budgeting process for 1994 have resulted in significant
increases in the anticipated losses with respect to the backlog
compared to calculations based on 1993 activity levels and costing
structures. As a result, Cameron believes that including the charge
against the third quarter of 1993 is appropriate from a timing
perspective. The $15,200,000 accrual was unchanged at December 31,
1993 since an updated calculation indicated that the amount
continued to be appropriate.
In years prior to 1993, although there were individual orders
which would have been at a loss calculated on a fully
cost-allocated basis, the aggregate amount of such backlog or
pricing agreements that would have resulted in a loss was not
material to Cameron.
F-9<PAGE>
<PAGE> 23
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
F. INVENTORIES
Inventories consisted of the following:
<CAPTION>
December 31,
1992 1993
(000's omitted)
<S> <C> <C>
Raw Materials $19,544 $13,387
Work-in-process 20,474 21,454
Finished goods 9,722 5,250
Perishable tooling and supplies 4,341 3,751
54,081 43,842
Excess of historical LIFO costs over
current standard costs 10,516 10,038
Other (13) 613
Net inventories $64,584 $54,493
</TABLE>
During each year, reductions in inventory quantities resulted
in liquidations of LIFO inventory layers carried at higher costs
prevailing in prior years. The effect was to decrease net income by
$1,465,000 in 1991, $1,507,000 in 1992 and $1,497,000 in 1993.
<TABLE>
G. PLANT AND EQUIPMENT AND INTANGIBLES
Plant and equipment and intangibles consisted of the
following:
<CAPTION>
December 31,
1992 1993
(000's omitted)
<S> <C> <C>
Plant and equipment:
Land, buildings and land improvements $13,616 $12,807
Machinery and equipment 54,810 68,809
Under construction 11,608 3,101
80,034 84,717
Accumulated depreciation (17,058) (24,030)
$62,976 $60,687
Intangibles:
Cost $ 4,121 $ 4,199
Accumulated amortization (1,791) (2,201)
$ 2,330 $ 1,998
</TABLE>
F-10<PAGE>
<PAGE> 24
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
H. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consisted of the
following:
<CAPTION>
December 31,
1992 1993
(000's omitted)
<S> <C> <C>
Trade accounts and accruals $28,367 $22,702
Salaries, wages and related fringe
benefits 3,417 3,017
Pension liability 5,345 2,009
Estimated costs of plant relocations
and nonrecurring items 7,070 2,604
Payroll and other taxes 3,239 3,996
Other (individual items less than 5%
of total current liabilities) 2,684 1,114
$50,122 $35,442
</TABLE>
<TABLE>
I. PENSION AND SAVINGS PLANS
In accordance with the Stock Purchase Agreement between Cooper
and Wyman-Gordon Company, under which Wyman-Gordon Company will
purchase all of the outstanding shares of Cameron Forged Products
Company from Cooper, Cooper will retain all obligations and
benefits of the defined benefit pension plans discussed below.
Pension expense for defined benefit pension plans included the
following components:
<CAPTION>
Year Ended December 31,
1991 1992 1993
(000's omitted)
<S> <C> <C> <C>
Service cost-benefits earned
during the year $ 2,304 $ 2,364 $ 2,532
Interest cost on projected
benefit obligation 5,930 6,559 6,420
Actual return on assets (8,490) (5,108) (9,362)
Net amortization and deferral 2,564 (1,571) 3,132
Net pension cost $ 2,308 $ 2,244 $ 2,722
</TABLE>
F-11<PAGE>
<PAGE> 25
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
I. PENSION AND SAVINGS PLANS (CONTINUED)
A summary of the funding status of the defined benefit pension
plans is as follows:
<CAPTION>
Plans With Plans With
Assets in Excess Accumulated
of Accumulated Benefits in
Benefits Excess of Assets
December 31, December 31,
1992 1993 1992 1993
(000's omitted)
<S> <C> <C> <C> <C>
Actuarial present value of:
Vested benefit obligation $(23,724) $(34,624) $(40,697) $(51,360)
Accumulated benefit
obligation $(24,572) $(35,634) $(40,720) $(51,393)
Projected benefit
obligation $(31,122) $(38,118) $(45,064) $(51,478)
Plan assets at fair value 35,425 43,350 35,349 38,337
Plan assets in excess of
(less than) projected
benefit obligation 4,303 5,232 (9,715) (13,141)
Unrecognized net loss 5,321 3,724 4,287 11,031
Unrecognized net asset from
adoption date (431) (399) - -
Unrecognized prior service
cost 142 94 - -
Adjustment required to
recognize - - - (10,946)
Pension asset (liability)
at end of year $ 9,335 $ 8,651 $ (5,428) $(13,056)
</TABLE>
<TABLE>
<CAPTION>
Computational Assumptions
Project
Benefit
Net Pension Cost Obligation
1991 1992 1993 1992 1993
<S> <C> <C> <C> <C> <C>
Discount rate:
Domestic 9 % 9 % 8 1/2% 8 1/2% 7 %
International 10 9 9 9 7 3/4
Rate of increase in
compensation levels:
Domestic 6 6 5 1/2 5 1/2 5
International 7 6 6 6 5 1/2
Expected long-term rate of
return on assets:
Domestic 9 1/2 9 1/2 9 1/2 - -
International 11 10 10 - -
</TABLE>
Benefit basis:
Salaried plans: earnings during career
Hourly plans: dollar units, multiplied by years of service
Funding policy: 5 to 30 years.
F-12<PAGE>
<PAGE> 26
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
I. PENSION AND SAVINGS PLANS (CONTINUED)
As part of Cooper, the domestic salaried employees of Cameron
participate in the Salaried Employees' Retirement Plan of Cooper
Industries, Inc. while the United Kingdom (U.K.) salaried and
hourly employees participate in a combined plan along with certain
other Cooper employees in the U.K. The domestic hourly employees of
Cameron participate in the Cameron Iron Works USA, Inc. Retirement
Plan for Hourly Employees as well as the Cameron Iron Works USA,
Inc. Savings-Investment Plan for Hourly Employees (the Cameron
Hourly Savings Plan). Under the Cameron Hourly Savings Plan
employee savings deferrals are partially matched with company
contributions of cash. The amounts shown in the preceding table
reflect amounts allocated to Cameron as its proportionate share of
both the domestic and the combined U.K. plans. Aggregate pension
expense amounted to $2,680,000 in 1991, $2,612,000 in 1992 and
$3,031,000 in 1993. Cameron's expense with respect to the defined
benefit pension plans is set forth in the table above. For 1994,
primarily as a result of the reduction in the domestic discount
rate from 8.5% to 7%, Cameron's domestic defined benefit pension
plan expense is projected to increase by approximately $1,400,000.
Expense with respect to the domestic defined contribution plan for
the years ended December 31, 1991, 1992 and 1993 amounted to
$372,000, $368,000 and $309,000, respectively. Gains and losses on
curtailments and settlements were not material in any of the three
years ended December 31, 1993. The assets of the domestic and
foreign plans are maintained in various trusts and consist
primarily of equity and fixed income securities.
At December 31, 1993, the $10,946,000 "minimum liability" with
respect to the domestic hourly pension plan has been recorded in
the Combined Balance Sheet as a long-term liability with an
offsetting reduction in caption "Net Assets." The remaining
December 31, 1993 liability of $2,110,000 with respect to this plan
is included in accounts payable and accrued liabilities partially
offset by a $101,000 asset with respect to the domestic salaried
plan. The remaining pension asset of $8,550,000 relates to the
United Kingdom pension plan and is included in a long-term pension
asset caption. At December 31, 1992 there was no "minimum
liability" with respect to the domestic hourly plan and the plan's
regular liability of $5,428,000 was recorded in accounts payable
and accrued liabilities partially offset by an $83,000 asset with
respect to the domestic salaried plan. The remaining asset of
$9,252,000 which related to the United Kingdom plan was recorded in
a long-term pension asset caption.
Cameron's full-time domestic salaried employees are also
eligible to participate in the Cooper Savings and Stock Ownership
Plan. Under the Cooper Savings and Stock Ownership Plan, employee's
savings deferrals are partially matched with an allocation of
shares in Cooper's Employee Stock Ownership Plan (ESOP). No assets
or liabilities with respect to Cooper's ESOP have been included in
F-13<PAGE>
<PAGE> 27
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
I. PENSION AND SAVINGS PLANS (CONTINUED)
Cameron's combined financial statements. Cameron's expense equals
the matching contribution under the Plan's formula adjusted to
reflect Cameron's proportionate participation in Cooper's ESOP.
Expense for the years ended December 31, 1991, 1992 and 1993
amounted to $367,000, $366,000 and $343,000, respectively.
J. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
As part of Cooper, Cameron's salaried employees participate in
various domestic employee welfare benefit plans including for
active employees medical, dental and prescriptions, among other
benefits. Salaried employees who retired prior to 1989, as well as
certain other employees who were near retirement and elected to
receive certain benefits, have retiree medical, prescription and
life insurance benefits while active salaried employees will not
have postretirement medical benefits.
The hourly employees have separate plans with varying benefit
formulas. In all cases, however, currently active employees,
except for certain employees who are near retirement and previously
elected to receive certain benefits, will not receive health care
benefits after retirement. Cameron entered into a union agreement
in 1992 which reduced certain postretirement health care benefits
and resulted in a curtailment gain of $1,500,000. In addition,
certain amendments were made in 1992 which resulted in an
additional $1,900,000 of accumulated postretirement benefit
obligation and additional expense of $300,000 in 1992 and 1993.
All of Cooper's plans and therefore Cameron's portion of such
plans are unfunded.
As described in Note C of the Notes to the Combined Financial
Statements, Cooper, and therefore Cameron, elected for the year
1992 and future years to follow the provisions of SFAS No. 106
(Employers' Accounting for Postretirement Benefits Other Than
Pensions). The amounts reflected in the table which follows
represent Cameron's portion of Cooper's overall salaried employee
retiree liability as well as Cameron's proportionate amounts in
various plan groupings which were actuarially evaluated in arriving
at Cooper's overall expense in accordance with SFAS No. 106.
F-14<PAGE>
<PAGE> 28
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
J. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
<TABLE>
<CAPTION>
Accumu- Items Not Yet Amounts Per
lated Recorded Financial Statements
Post- in Financial Liability
tirement Statements for Post-
Benefit Actu- retirement Net
Obliga- Prior arial Benefits Annual
tion Service Net Other Than Expense
(APBO) Cost Gain Pensions (Income)
<S> <C> <C> <C> <C> <C>
Balance -
December 31, 1991 $ (2,178) $ - $ - $ (2,178) $ -
Adoption of SFAS
No. 106 effective
January 1, 1992 (9,922) - - (9,922) -
Plan activity:
Service cost (200) - - - 200
Interest cost (900) - - - 900
Benefit payments 576 - - 576 -
Plan amendments (1,900) 1,900 - - -
Amortization of
unrecognized
prior service
cost - (300) - - 300
Curtailment gain 1,500 - - - (1,500)
Net annual expense - - - 100 -
Balance -
December 31, 1992 (13,024) 1,600 - (11,424) $ (100)
Plan activity:
Service cost (100) - - - $ 100
Interest cost (800) - - - 800
Benefit payments 383 - - 383 -
Actuarial net gain 4,400 - (4,400) - -
Amortization of
unrecognized
prior service
cost - (300) - - 300
Net annual expense - - - (1,200) -
Balance -
December 31, 1993 $ (9,141) $1,300 $(4,400) $(12,241) $ 1,200
</TABLE>
F-15<PAGE>
<PAGE> 29
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
J. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
<TABLE>
<CAPTION>
December 31,
1992 1993
<S> <C> <C>
Amount of APBO related to:
Retired employees $(6,512) $(4,753)
Employees eligible to retire (2,214) (1,554)
Other employees (4,298) (2,834)
Actuarial assumptions:
Discount rate 7.64% 7.58%
1993 to 2002 - health-care cost
trend rate: 20% Ratable 17% Ratable
to 5.5% to 5.5%
Effect of 1% change in health-care
cost trend rate:
Increase December 31, 1992 APBO 9% 9%
Increase 1992 expense 10% 10%
</TABLE>
<TABLE>
K. NET ASSETS
Changes in net assets during the three years ended December
31, 1993 were as follows:
<CAPTION>
Trans-
lation Minimum
Adjust- Pension
Total ment Liability(1) Other
(000's omitted)
<S> <C> <C> <C> <C>
Balance at December 31, 1990 $ 85,781 $ 2,800 $ - $ 82,981
Translation adjustment 598 598 - -
Cash flow transferred to
Cooper (8,243) - - (8,243)
Net income 8,122 - - 8,122
Balance at December 31, 1991 86,258 3,398 - 82,860
Translation adjustment (4,909) (4,909) - -
Cash flow provided by Cooper 14,359 - - 14,359
Net (loss) (9,555) - - (9,555)
Balance at December 31, 1992 86,153 (1,511) - 87,664
Translation adjustment (1,301) (1,301) - -
Cash flow provided by Cooper 10,597 - - 10,597
Adjustment required to
recognize minimum pension
liability (10,946) - (10,946) -
Net (loss) (20,054) - - (20,054)
Balance at December 31, 1993 $ 64,449 $(2,812) $(10,946) $ 78,207
<FN>
(1) See Note I of the Notes to Combined Financial Statements.
</TABLE>
Intercompany transactions are principally cash transfers
between Cameron and Cooper.
F-16<PAGE>
<PAGE> 30
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
L. INDUSTRY SEGMENTS, DOMESTIC AND INTERNATIONAL OPERATIONS,
AND MAJOR CUSTOMERS
Cameron's operations are conducted within one business
segment -- forged products.
Translation and transaction gains and losses included in
each year's Combined Results of Operations were not significant.
<TABLE>
Net sales to major customers as a percentage of sales were
as follows:
<CAPTION>
Year Ended December 31,
1991 1992 1993
<S> <C> <C> <C>
General Electric 25.4% 27.3% 29.6%
Rolls-Royce plc 9.8 11.7 10.5
United Technologies 9.0 10.6 10.2
</TABLE>
Domestic and International Operations -- Transfers between
domestic and international operations, principally inventory
transfers, are charged to the receiving organization at prices
sufficient to recover manufacturing costs and provide a
reasonable return. Export sales to unaffiliated customers
included in domestic sales were $13,000,000 in 1991, $15,500,000
in 1992 and $14,900,000 in 1993. Of total export sales, 25% (63%
in 1992 and 24% in 1993) were to Europe, 38% (26% in 1992 and 44%
in 1993) were to Canada, and 37% (11% in 1992 and 32% in 1993)
were to Asia.
<TABLE>
<CAPTION>
Revenues
Year Ended December 31,
1991 1992 1993
(000's omitted)
<S> <C> <C> <C>
Domestic $159,557 $132,306 $116,014
Europe 41,677 42,158 33,585
Eliminations:
Transfers to Europe (1,845) (130) (65)
Transfers to Domestic (452) - -
$198,937 $174,334 $149,534
</TABLE>
F-17<PAGE>
<PAGE> 31
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
L. INDUSTRY SEGMENTS, DOMESTIC AND INTERNATIONAL OPERATIONS,
AND MAJOR CUSTOMERS (CONTINUED)
<TABLE>
<CAPTION>
Operating Earnings (Loss) (1)
Year Ended December 31,
1991 1992(2) 1993
(000's omitted)
<S> <C> <C> <C>
Domestic $14,276 $5,738 $(19,848)
Europe 550 1,799 (2,317)
Eliminations:
Transfers to Europe 242 - 7
Transfers to Domestic (10) - -
$15,058 $7,537 $(22,158)
<FN>
(1) Combined income before income taxes and the cumulative effect
of changes in accounting principles in 1992.
(2) Domestic operating earnings include nonrecurring income as
further described in Note D of the Notes to the Combined
Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Identifiable Assets
December 31,
1991 1992 1993
(000's omitted)
<S> <C> <C> <C>
Domestic $105,900 $114,720 $108,348
Europe 50,837 49,130 43,485
Eliminations:
Transfers to Europe (242) - 7
Transfers to Domestic 10 - -
$156,505 $163,850 $151,840
</TABLE>
<TABLE>
M. INCOME TAXES
Income (loss) before income taxes and cumulative effect of
changes in accounting principles is comprised of the following:
<CAPTION>
Year Ended December 31,
1991 1992 1993
(000's omitted)
<S> <C> <C> <C>
Income (loss) before income taxes and
cumulative effect of changes in
accounting principles:
U.S. operations $14,518 $5,738 $(19,841)
Foreign operations 540 1,799 (2,317)
Income (loss) before income taxes
and cumulative effect of changes
in accounting principles $15,058 $7,537 $(22,158)
</TABLE>
F-18<PAGE>
<PAGE> 32
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
M. INCOME TAXES (CONTINUED)
Income tax expense (benefit) is comprised of the following:
<CAPTION>
Deferred Liability
Method Method
1991 1992 1993
(000's omitted)
<S> <C> <C> <C>
Income taxes:
Currently payable:
U.S. Federal $3,357 $ - $ -
U.S. state and local - - -
Foreign 557 - -
3,914 - -
Deferred:
U.S. Federal 3,317 2,861 (1,916)
U.S. state and local - 6 (4)
Foreign (295) 128 (184)
3,022 2,995 (2,104)
Income tax expense (benefit) $6,936 $2,995 $(2,104)
Following is a summary of items giving
rise to deferred income taxes:
Excess of tax over book depreciation $1,323 $ - $ -
Capitalized for books and expensed
for tax 2,311 - -
Reserves and accruals 330 - -
LIFO inventory (829) 3,222 (1,974)
Other (113) (227) (130)
Deferred income taxes $3,022 $2,995 $(2,104)
The provision for income taxes is
at a rate other than the federal
statutory tax rate for the following
reasons:
U.S. Federal statutory rate 34.0% 34.0% (34.0)%
Nontaxable permanent difference
on book depreciation (10.1) - -
Net domestic and foreign losses
without tax benefits 22.2 5.7 24.5
Indicated effective tax rate 46.1% 39.7% (9.5)%
Following is the amount of income
taxes refunded:
Total income taxes refunded* $ (809) $ - $ -
<FN>
* Taxes are refunded by Cameron to Cooper who in turn receives
the taxes from the various taxing authorities.
</TABLE>
F-19<PAGE>
<PAGE> 33
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
M. INCOME TAXES (CONTINUED)
The components of deferred tax liabilities and assets were as
follows:
<CAPTION>
December 31,
1992 1993
(000's omitted)
<S> <C> <C>
Deferred tax liabilities:
LIFO inventory $(11,411) $ (9,437)
Other (4,255) (4,125)
Total deferred tax liabilities (15,666) (13,562)
Deferred tax assets:
Reserves and accruals 7,866 9,632
Plant and equipment 5,622 2,959
Postretirement benefits other
than pensions 3,889 4,168
Net operating loss carryforwards 9,689 15,139
Total deferred tax assets 27,066 31,898
Valuation allowances (27,066) (31,898)
Net deferred tax liabilities $(15,666) $(13,562)
</TABLE>
Although Cameron's U.S. operations were included in the
consolidated U.S. Federal and certain combined and separate state
income tax returns of Cooper and its foreign operations were
included in the tax return of a Cooper subsidiary doing business in
the U.K., the above tax provisions and tax liabilities presented
have been determined as if Cameron's operations in all countries
were stand-alone businesses filing separate tax returns. Deferred
income taxes have been determined from temporary differences
between financial statement income and taxable income with
appropriate valuation allowances based on Cameron's stand-alone
ability to utilize both net operating losses and other deferred tax
assets.
The balance of accrued taxes for Cameron's U.S. and foreign
operations is included in Cameron's intercompany/equity balance
with Cooper, since Cooper pays all taxes and receives all tax
refunds on Cameron's behalf.
Income tax expense and the information shown above for 1992
and 1993 have been determined in accordance with the provisions of
SFAS No. 109 (Accounting for Income Taxes) which basically provides
for a "liability" approach to taxes. Income taxes for years prior
to 1992 have not been restated and are accordingly reflected above
based on a "deferred" approach to taxes. The major difference
between the two approaches as reflected in the information above is
that (a) acquisition date fair market value write-downs of plant
and equipment which were not tax effected and therefore treated as
permanent differences have now been tax effected and (b) items that
were previously accounted for on a "net-of-tax" basis (primarily
acquisition date reserves and accruals of acquired businesses and
F-20<PAGE>
<PAGE> 34
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
M. INCOME TAXES (CONTINUED)
certain fair market value adjustments of inventories and fixed
assets) are now considered to be "temporary differences" that give
rise to larger deferred tax amounts in the provision disclosure.
See Note C of the Notes to Combined Financial Statements.
On a stand-alone basis, Cameron has pre-tax net operating loss
carryforwards of $44,526,471 ($0 net of the valuation allowance) at
December 31, 1993 with the earliest expiration date being 2000.
These net operating losses have in fact been utilized by Cooper in
its consolidated return, except for a $8,165,000 net operating loss
which existed at acquisition date and must be utilized by Cameron
on a separate return basis.
The adoption of SFAS No. 109 has not changed the actual amount
of income tax that Cameron pays nor, except for the $1,500,000
increase in income tax expense described in Note C of the Notes to
Combined Financial Statements, has it changed Cameron's income tax
expense.
The U.S. Federal portion of the above provision includes U.S.
tax expected to be payable on the foreign portion of Cameron's
income before income taxes when such earnings are remitted. Through
December 31, 1993, essentially all earnings of Cameron's foreign
operations have been remitted.
N. RELATED PARTY TRANSACTIONS
Cameron receives services provided by Cooper which include
employee benefits administration, cash management, risk management,
certain legal services, public relations, domestic tax reporting
and internal and domestic external audit. The costs associated with
these services have been allocated to Cameron. See Note B of the
Notes to Combined Financial Statements.
For purposes of Cameron's financial statements, the
intercompany account between Cameron and Cooper has been included
as an element of Cameron's net assets. All free cash flows and cash
requirements of Cameron are considered to be transferred to or
provided by Cooper and are included in this intercompany account.
Cameron sells products to Cooper on third party terms which
amounted to $10,000,000 in 1991, $6,400,000 in 1992 and $4,700,000
in 1993. In addition, Cameron incurs expense for use of Cooper's
mainframe computer and charges Cooper for shared office space and
administrative personnel in the U.K. The amounts involved in these
transactions are not material to Cameron.
F-21<PAGE>
<PAGE> 35
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
O. OFF-BALANCE-SHEET ITEMS, CONCENTRATIONS OF CREDIT AND FAIR
VALUE OF FINANCIAL INSTRUMENTS
OFF-BALANCE-SHEET ITEMS Cameron enters into forward exchange
contracts to hedge certain foreign currency transactions for
periods consistent with the terms of the underlying transactions.
Cameron does not engage in speculation, nor does Cameron typically
hedge nontransaction-related balance sheet exposure. While the
forward contracts affect Cameron's results of operations, they do
so only in connection with the underlying transactions. As a
result, they do not subject Cameron to risk from exchange rate
movements, because gains and losses on these contracts offset
losses and gains on the transactions being hedged. At December 31,
1992 and 1993, Cameron had approximately $1,800,000 and $2,000,000,
respectively of foreign exchange contracts outstanding for the
exchange of British pounds for other European currencies, Canadian
dollars, U.S. dollars or Japanese yen. The forward exchange
contracts have maturities that generally do not exceed one year.
Cameron's other off-balance-sheet risks are not material.
CONCENTRATIONS OF CREDIT Concentrations of credit with
respect to trade receivables are limited due to the wide variety of
customers and markets into which Cameron's products are sold, as
well as their dispersion across many different geographic areas. As
a result, at December 31, 1993, Cameron does not consider itself to
have any significant concentrations of credit risk except for
receivables of $4,528,000, $3,701,000, and $4,903,000 from General
Electric, Rolls-Royce plc and United Technologies, respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS Cameron's financial
instruments consist primarily of trade receivables, trade payables,
and foreign currency forward contracts. The book values of trade
receivables and trade payables are considered to be representative
of their respective fair values. Based on year-end exchange rates
and the various maturity dates of the foreign currency forward
contracts, Cameron estimates the aggregate contract value to exceed
the fair value by .3% at December 31, 1993.
F-22<PAGE>
<PAGE> 36
CAMERON FORGED PRODUCTS DIVISION
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
P. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
<CAPTION>
Quarter
1st 2nd 3rd 4th
(000's omitted)
<S> <C> <C> <C> <C>
1992
Revenues $ 46,903 $48,346 $ 43,821 $35,264
Gross margin(1) 6,450 8,982 5,097 4,583
Income (loss) before
cumulative effect of
changes in accounting
principles(2) 326 2,818 1,808 (410)
Cumulative effect on prior
years of changes in
accounting principles (14,097) - - -
Net income (loss)(2) (13,771) 2,818 1,808 (410)
1993
Revenues $ 37,371 $36,508 $ 39,975 $35,680
Gross margin (loss)(1) 3,969 3,140 (13,674) 5,213
Net income (loss) (782) (1,822) (17,289) (161)
<FN>
(1) Gross margin equals sales less cost of goods sold (including
loss on long-term contracts and agreements) before
depreciation and amortization.
(2) Includes nonrecurring income as further described in Note D of
the Notes to Combined Financial Statements.
</TABLE>
F-23<PAGE>
<PAGE> 37
ANNEX II
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA OF
WYMAN-GORDON COMPANY WITH CAMERON FORGED PRODUCTS COMPANY
The following unaudited pro forma combined financial data give
effect to the Acquisition and are based on estimates and
assumptions set forth below in the notes to such data which include
pro forma adjustments. These unaudited pro forma combined financial
data have been prepared utilizing the historical financial
statements of the Company and Cameron and should be read in
conjunction with such historical financial statements and
accompanying notes. The unaudited pro forma combined financial
data do not reflect any sales attrition which may result from the
combination or the cost savings that the Company expects to achieve
from the combination. These unaudited pro forma combined financial
data do not purport to be indicative of the results which actually
would have been obtained if the Acquisition had been effected on
the date or dates indicated or of those results which may be
obtained in the future.
The pro forma combined financial data are based on the
purchase method of accounting for the Acquisition. The pro forma
condensed combined balance sheet assumes an April 2, 1994
acquisition date. The pro forma combined statements of operations
assume that the Acquisition had occurred on January 1, 1993.
Although neither the Company nor Cooper has complete current
information as to the fair market values of Cameron's individual
assets and liabilities, a preliminary estimate of the allocation of
the purchase price was made on the basis of available information.
The actual allocation of the purchase price may be different from
that reflected in the pro forma financial data. Such differences
would result from adjustments in the purchase price and refinements
in the fair market values of the net assets acquired.
P-1<PAGE>
<PAGE> 38
<TABLE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
April 2, 1994
<CAPTION>
Historical Pro Forma
Wyman- Adjust- Combined
Gordon Cameron ments Companies
(000's Omitted, except per share data)
<S> <C> <C> <C> <C>
ASSETS:
Cash and cash
equivalents $ 25,255 $ - $ (400)(d) $ 49,466
24,611 (c)
Accounts receivable 49,208 33,076 - 82,284
Inventories 41,005 50,490 2,167 (d) 93,662
Prepaid expenses 11,024 389 - 11,413
Total current assets 126,492 83,955 26,378 236,825
Property, plant and
equipment, net 94,643 60,018 (15,959)(d) 122,402
(16,300)(a)
Intangible assets 20,550 2,137 (2,137)(d) 21,350
800 (d)
Pension intangible and
asset 8,368 8,546 (8,546)(b) 8,368
Deferred income taxes - - 10,002 (d) 10,002
Other assets 29,757 105 - 29,862
$279,810 $154,761 $ (5,762) $428,809
LIABILITIES AND
STOCKHOLDERS' EQUITY:
Current maturities of
long-term debt $ 77 $ - $ - $ 77
Accounts payable and
accrued liabilities 26,307 33,234 (1,517)(b) 58,024
Note payable - - 24,862 (c) 24,862
Loss on long-term contracts
and agreements - 15,200 7,400 (d) 22,600
Deferred income taxes - 9,147 (9,147)(d) -
Accrued restructuring,
integration, disposal
and environmental 4,425 - 7,759 (d) 23,284
11,100 (a)
Total current liab. 30,809 57,581 40,457 128,847
Restructuring,
integration, disposal
and environmental 13,549 - 9,553 (d) 23,102
Long-term debt 90,461 - - 90,461
Pension liability 14,065 10,946 (10,946)(b) 18,565
4,500 (d)
Deferred income taxes
and other 9,275 4,293 (4,293)(d) 12,461
3,186 (d)
Postretirement benefits
other than pensions 41,817 12,159 - 53,976
Stockholders' equity 79,834 69,782 (27,400)(a) 101,397
(251)(c)
49,214 (d)
(69,782)(d)
$279,810 $154,761 $ (5,762) $428,809
</TABLE>
P-2<PAGE>
<PAGE> 39
<TABLE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET (CONTINUED)
April 2, 1994
<CAPTION>
Historical Pro Forma
Wyman- Adjust- Combined
Gordon Cameron ments Companies
(000's Omitted, except per share data)
<S> <C> <C> <C> <C>
Book value per share $ 4.43 $ 2.94
Number of common shares
outstanding used to
calculate book value
per share 18,040 34,540
</TABLE>
P-3<PAGE>
<PAGE> 40
<TABLE>
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA OF
WYMAN-GORDON COMPANY WITH CAMERON FORGED PRODUCTS COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Historical Pro Forma
Wyman- Adjust- Combined
Gordon Cameron ments Companies
(000's Omitted, except per share data)
<S> <C> <C> <C> <C>
Revenue $239,761 $149,534 $ - $389,295
Cost and expenses:
Cost of sales 210,069 135,686 4,206 (e) 349,961
Selling, general and
administrative 20,098 11,904 175 (e) 32,177
Depreciation and
amortization 15,569 8,902 (4,590)(e) 19,881
Loss on long-term
contracts and
agreements - 15,200 - 15,200
Other 2,453 - - 2,453
248,189 171,692 (209) 419,672
Income (loss) from
operations (8,428) (22,158) 209 (30,377)
Other deductions (income):
Interest expense 9,897 - 318 (e) 10,215
Miscellaneous, net (1,321) - - (1,321)
8,576 - 318 8,894
Income (loss) before income
taxes and cumulative
effect of changes in
accounting principles (17,004) (22,158) (109) (39,271)
Income tax (expense)
benefit - 2,104 (2,104)(e) -
Income (loss) before
cumulative effect of
changes in accounting
principles $(17,004) $(20,054) $(2,213) $(39,271)
Income (loss) per share
before cumulative effect
of changes in accounting
principles $ (0.95) $ (1.14)
Average number of common
shares outstanding 17,936 34,436
</TABLE>
P-4<PAGE>
<PAGE> 41
<TABLE>
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA OF
WYMAN-GORDON COMPANY WITH CAMERON FORGED PRODUCTS COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
ENDED APRIL 2, 1994
<CAPTION>
Historical Pro Forma
Wyman- Adjust- Combined
Gordon Cameron ments Companies
(000's Omitted, except per share data)
<S> <C> <C> <C> <C>
Revenue $ 52,268 $ 38,836 $ - $ 91,104
Cost and expenses:
Cost of sales 48,962 34,134 1,849 (f) 84,945
Selling, general and
administrative 5,352 2,731 43 (f) 8,126
Depreciation and
amortization 3,812 2,138 (1,225)(f) 4,725
58,126 39,003 667 97,796
Income (loss) from
operations (5,858) (167) (667) (6,692)
Other deductions (income):
Interest expense 2,399 - 80 (f) 2,479
Miscellaneous, net 429 - - 429
2,828 - 80 2,908
Income (loss) before income
taxes (8,686) (167) (747) (9,600)
Income tax (expense)
benefit - 122 (122)(f) -
Net income (loss) $ (8,686) $ (45) $ (869) $ (9,600)
Net income (loss) per
share $ (0.48) $ (0.28)
Average number of common
shares outstanding 18,017 34,517
</TABLE>
P-5<PAGE>
<PAGE> 42
<TABLE>
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL DATA OF
WYMAN-GORDON COMPANY WITH CAMERON FORGED PRODUCTS COMPANY
(a) The unaudited pro forma combined statements of operations
do not include non-recurring charges which result from the
transaction and the integration into the Company of Cameron, and
which are expected to be charged to operations at the consummation
of the Acquisition. Such charges, which are expected to approximate
$27.4 million, represent only those integration expenses related to
the Company's personnel, facilities, machinery and equipment and
production operations and include movement of machinery and
equipment and tooling and dies, transfer of technology between the
Company and Cameron, relocation and severance of personnel of the
Company and the write-down of certain assets of the Company to net
realizable value as a result of consolidating certain systems and
facilities, idling certain machinery and equipment, and eliminating
certain processes, departments, and operations as a result of the
acquisition. Following is a summary of such charges based on the
Company's current plans for the integration into the Company of
Cameron which have been reflected in the pro forma balance sheet
(000's omitted):
<CAPTION>
Cash Non-Cash Total
<S> <C> <C> <C>
Movement of the Company's
machinery and equipment
and tooling dies $ 5,100 $ - $ 5,100
Relocation, severance and
other costs related to
personnel of the Company 6,000 - 6,000
Write-down of certain assets
of the Company to net
realizable value:
Metal production facility - 8,500 8,500
Forging equipment - 5,700 5,700
Machining and testing
equipment - 2,100 2,100
$11,100 $16,300 $27,400
</TABLE>
Certain of these charges are preliminary estimates based on
current plans for the integration into the Company of Cameron and
may change based on additional information.
(b) To eliminate Cameron assets not acquired and liabilities
not assumed.
(c) To reflect the planned factoring of Cameron's U.S.
accounts receivable by Cooper in accordance with the Stock Purchase
Agreement and under terms and conditions that provide for a
purchase price of 99% of the total face amount of such receivables,
less a reserve of uncollectible accounts and for the repurchase by
the Company of any such receivables uncollected 90 days following
the Acquisition.
P-6<PAGE>
<PAGE> 43
<TABLE>
(d) To record the purchase price, to allocate the purchase
price to acquired assets and liabilities based on their relative
fair values, and to adjust property, plant and equipment for the
excess of the fair value of net assets acquired over the purchase
price as follows (000's omitted):
<CAPTION>
<S> <C>
Cost of acquisition:
Issuance of 16,500 shares of common stock to
Cooper, including direct costs of $2,527 $ 49,214
Note payable to Cooper net of discount of
$1,414 3,186
Cash paid to Cooper 400
52,800
Estimated direct costs to the acquisition and
integration of Cameron into the Company 17,312
$ 70,112
Allocation of cost of acquisition:
Historical cost of net assets acquired $ 73,699
Purchase accounting adjustments:
Adjust inventories to reflect the Company's
full absorption method of valuing
inventories 2,167
Adjust intangible assets to fair value (2,137)
Record favorable lease 800
Record revaluation of Cameron's long-term
sales agreements (7,400)
Record pension transition liability (4,500)
Adjust deferred income taxes:
Long-term asset 10,002
Current liability 9,147
Long-term liability 4,293
Adjustment to property, plant and equipment (15,959)
$ 70,112
</TABLE>
The Stock Purchase Agreement provides for adjustment of the
purchase price based on changes in certain assets and liabilities
between September 26, 1993 and the closing date. Management
presently believes these adjustments will not significantly affect
the purchase price.
<TABLE>
Estimated direct costs related to the Acquisition and
integration of Cameron into the Company include the following
(000's omitted):
<CAPTION>
Long-
Current Term Total
<S> <C> <C> <C>
Stand-alone costs for settling
assumed workers compensation
liabilities $ - $1,400 $ 1,400
Cost of relocating Cameron's
machinery and equipment and
tooling and dies 2,100 6,100 8,200
Severance of Cameron personnel 3,500 - 3,500
Other 2,159 2,053 4,212
$7,759 $9,553 $17,312
P-7<PAGE>
<PAGE> 44
All such costs are incremental and directly related to the
Acquisition and reflect only those costs associated with Cameron's
facilities, organization, and personnel. Certain of these costs are
estimates based on preliminary information and may change based on
receipt of additional information.
</TABLE>
<TABLE>
(e) To adjust historical operating results for the year ended
December 31, 1993 to reflect the Acquisition as follows (000's
omitted):
<CAPTION>
Increase (Decrease) in Income
Selling, Deprec-
General iation Income
Cost and and Tax
of Adminis- Amorti- Interest
(Expense)
Sales trative zation Expense Benefit
<S> <C> <C> <C> <C> <C>
Reflect the Company's
full absorption
method of valuing
inventories $(1,592)
Reflect stand-alone
fringe benefit and
insurance costs (2,214) $(175)
Reflect amortization
of favorable lease
value (400)
Reduce historical
Cameron depreciation
and amortization to
reflect the acquisi-
tion basis and useful
lives of assets
purchased $4,590(1)
Reflect amortization
of discount on note
payable to Cooper
($2,300 discounted at
10% for 38 months and
$2,300 at 10% for 50
months) $(318)
Adjust income tax
(expense) benefit to
reflect the Acquisi-
tion $(2,104)
$(4,206) $(175) $4,590 $(318) $(2,104)
</TABLE>
P-8<PAGE>
<PAGE> 45
<TABLE>
(1) Adjustment is calculated as follows:
<CAPTION>
Acquis- Estimated
ition Useful Deprec-
Basis Life iation
<S> <C> <C> <C>
Acquisition basis of property,
plant and equipment:
Land $ 3,012 N/A $ -
Buildings and land improvements 9,035 25 years 362
Machinery and equipment 32,012 8 years 3,950
$44,059 4,312
Historical 1993 Cameron
depreciation and amortization 8,902
Increase in income $4,590
</TABLE>
P-9<PAGE>
<PAGE> 46
<TABLE>
(f) To adjust historical operating results for the thirteen
weeks ended April 2, 1994 to reflect the Acquisition as follows
(000's omitted):
<CAPTION>
Increase (Decrease) in Income
Selling, Deprec-
General iation Income
Cost and and Tax
of Adminis- Amorti- Interest
(Expense)
Sales trative zation Expense Benefit
<S> <C> <C> <C> <C> <C>
Reflect the Company's
full absorption
method of valuing
inventories $(1,195)
Reflect stand-alone
fringe benefit and
insurance costs (554) $(43)
Reflect amortization
of favorable lease
value (100)
Reduce historical
Cameron depreciation
and amortization to
reflect the acquisi-
tion basis and useful
lives of assets
purchased $1,225(1)
Reflect amortization
of discount on note
payable to Cooper
($2,300 discounted at
10% for 38 months and
$2,300 at 10% for 50
months) $(80)
Adjust income tax
(expense) benefit to
reflect the Acquisi-
tion $(122)
$(1,849) $(43) $1,225 $(80) $(122)
</TABLE>
P-10<PAGE>
<PAGE> 47
<TABLE>
(1) Adjustment is calculated as follows:
<CAPTION>
Acquis- Estimated
ition Useful Deprec-
Basis Life iation
<S> <C> <C> <C>
Acquisition basis of property,
plant and equipment:
Land $ 3,012 N/A $ -
Buildings and land improvements 9,035 25 years 77
Machinery and equipment 32,012 8 years 836
$44,059 913
Historical Cameron depreciation
and amortization for the three
months ended March 31, 1994 2,138
Increase in income $1,225
</TABLE>
P-11<PAGE>
<PAGE> 48
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
<S> <C> <C> <C>
99.1 Amended and Restated Stock Purchase 11
Agreement, dated as of January 10,
1994, between the Company and Cooper.
99.2 Investment Agreement, dated as of 12
January 10, 1994, between the Company
and Cooper.
99.3 Press release issued by the Company 13
on May 26, 1994.
99.4 Amendment dated May 26, 1994 to 14
Investment Agreement dated as of
January 10, 1994, between the Company
and Cooper.
99.5 10 % Senior Notes due 2003 Supple- 15
mental Indenture dated May 19, 1994.
99.6 10 % Senior Notes due 2003 Second 16
Supplemental Indenture and Guarantee
dated May 27, 1994.
99.7 Revolving Credit Agreement dated as 17
of May 20, 1994 among Wyman-Gordon
Receivables Corporation, the
Financial Institutions Parties
Hereto and Shawmut Bank N.A. as
Issuing Bank, as Facility Agent
and as Collateral Agent.
99.8 Receivables Purchase and Sale 18
Agreement dated as of May 20, 1994
among Wyman-Gordon Company, Wyman-
Gordon Investment Castings, Inc.
and Precision Founders Inc. as the
Sellers, Wyman-Gordon Company as
the Servicer and Wyman-Gordon
Receivables Corporation as the
Purchaser.
99.9 Employment Agreement effective 19
March 24, 1994 between Wyman-
Gordon Company and David P. Gruber.
99.10 Employment Agreement effective 20
March 4, 1994 between Wyman-Gordon
Company and J. Douglas Whelan.
</TABLE>
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<PAGE> 49
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
<S> <C> <C> <C>
99.11 Performance Share Agreement under 21
the Wyman-Gordon Company Long-Term
Incentive Plan between the Company
and David P. Gruber dated as of
May 24, 1994.
99.12 Executive Severance Agreement between 22
the Company and J. Douglas Whelan
dated as of May 1, 1994.
</TABLE>
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<PAGE> 1
EXHIBIT 99.1
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
Between
COOPER INDUSTRIES, INC.
and
WYMAN-GORDON COMPANY
Dated as of January 10, 1994
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<PAGE> 2
STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
(Not Part of the Agreement)
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
PARTIES 1
PREAMBLES 1
ARTICLE I SALE OF COMPANY COMMON STOCK 1
1.1 Purchase and Sale 1
1.2 Consideration 1
1.3 Closing Balance Sheet 2
1.4 Seller's Review of Preliminary Closing
Balance Sheet 5
1.5 Buyer Response to Seller's Letter 5
1.6 Meeting to Resolve Proposed Adjustments 5
1.7 Resolution by Accounting Arbitrator 6
1.8 Positive or Negative Purchase Price Adjustment 6
1.9 Values 7
1.10 Place of Payment 7
ARTICLE II CLOSING 7
2.1 Time and Place of Closing 7
2.2 Deliveries by the Seller 7
2.3 Deliveries by the Buyer 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER 8
3.1 Organization 8
3.2 Capitalization 9
3.3 Authority Relative to This Agreement 9
3.4 Consents and Approvals; No Violations 10
3.5 Financial Statements 10
3.6 Absence of Certain Changes 11
3.7 No Undisclosed Liabilities 11
3.8 Information in Proxy Statement 12
3.9 Litigation 12
3.10 Compliance With Applicable Law 12
3.11 Taxes 13
3.12 ERISA; Employee Benefits 13
3.13 Intellectual Property 15
3.14 Material Contracts; No Defaults 16
3.15 Environmental Compliance 16
3.16 Title to Real Property 17
3.17 Company Assets 17
3.18 Labor Matters 17
3.19 Purchase for Investment 18
3.20 No Beneficial Ownership of the Buyer's Stock 18
3.21 Change in Control 18
3.22 Business of the Company 18
3.23 Representations Accurate 18
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER 19
4.1 Organization 19
4.2 Capitaliztion 19
4.3 Authority Relative to this Agreement 20
4.4 Consents and Approvals; No Violations 21
4.5 Reports 21
4.6 Absence of Certain Changes 22
4.7 No Undisclosed Liabilities 22
4.8 Information in Proxy Statement 23
4.9 Litigation 23
4.10 Compliance with Applicable Law 23
4.11 Taxes 23
4.12 ERISA; Employee Benefits 24
4.13 Intellectual Property 25
4.14 No Defaults 26
4.15 Environmental Compliance 26
4.16 Representations Accurate 26
4.17 Purchase for Investment 27
ARTICLE V COVENANTS 27
5.1 Business Covenants of the Seller 28
5.2 Business Covenants of the Buyer 29
5.3 Current Information 31
5.4 Access to Information 31
5.5 Reasonable Best Efforts 32
5.6 Consents; Filings 33
5.7 Shareholder Meeting 33
5.8 Amendment to Articles of Organization
and By-Laws 34
5.9 Rights Agreement 34
5.10 Brokers or Finders 34
5.11 Fees and Expenses 34
5.12 Employee Benefits 34
5.13 Public Announcements 42
5.14 Use of the Company Name 42
5.15 Company Books and Records 43
5.16 Disclosure Supplements 43
5.17 Ancillary Agreement 43
5.18 WARN Act 44
5.19 Taxes 44
5.20 Existing Insurance Coverage 50
5.21 Certain Obligations 50
5.22 Survival; Indemnification 51
5.23 Repurchase of Receivables 55
</TABLE>
ii<PAGE>
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<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
ARTICLE VI CONDITIONS 55
6.1 Conditions to Each Party's Obligation to
Effect the Transactions Contemplated by
this Agreement 55
6.2 Conditions of Obligations of the Seller to
Effect the Transactions Contemplated by this
Agreement 56
6.3 Conditions of Obligations of the Buyer to
Effect the Transactions Contemplated by
this Agreement 57
ARTICLE VII TERMINATION AND ABANDONMENT 57
7.1 Termination 57
7.2 Procedure and Effect of Termination 58
ARTICLE VIII MISCELLANEOUS 58
8.1 Amendment and Modification 58
8.2 Waiver of Compliance; Consents 58
8.3 Investigations; Survival Upon Termination 59
8.4 Notices 59
8.5 Annexes, Schedules and Exhibits 60
8.6 Descriptive Headings 60
8.7 Counterparts 60
8.8 Entire Agreement; Assignment 60
8.9 Governing Law 60
8.10 Specific Performance 60
8.11 Alternative Dispute Resolution 61
8.12 Non-Competition 62
8.13 Further Assurances 63
8.14 No Third-Party Beneficiaries 63
8.15 Remedies; Waiver 63
8.16 Severability 63
</TABLE>
iii<PAGE>
<PAGE> 5
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT, dated as of
January 10, 1994 (the "Agreement"), between Cooper Industries,
Inc., an Ohio corporation (the "Seller"), and Wyman-Gordon Company,
a Massachusetts corporation (the "Buyer").
WHEREAS, the Seller owns all of the issued and outstanding
shares of common stock, par value $.208-1/3 per share (the "Company
Common Stock"), of Cameron Forged Products Company, a Delaware
corporation (the "Company"); and
WHEREAS, the Seller desires to sell and the Buyer desires to
purchase the Company Common Stock; and
WHEREAS, simultaneously with the execution and delivery of the
Stock Purchase Agreement dated as of January 10, 1994 by and
between the Buyer and the Seller (the "Original Agreement") and as
an inducement to enter into the Original Agreement, the Buyer and
the Seller have entered into the Investment Agreement dated as of
the date hereof and in the form attached hereto as Annex I (the
"Investment Agreement"), providing for certain arrangements with
respect to their relationship following consummation of the
transactions contemplated by this Agreement; and
WHEREAS, the Buyer and the Seller wish to make certain
technical corrections to the Original Agreement.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth,
and intending to be legally bound hereby, the parties hereto agree
to amend and restate in its entirety the Original Agreement and all
the terms and provisions thereof to read in their entirety as
follows:
ARTICLE I
SALE OF COMPANY COMMON STOCK
1.1 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as hereinafter
defined) the Seller will sell, assign, transfer and deliver to the
Buyer, and the Buyer will accept and purchase from the Seller, all
of the Company Common Stock.
1.2 Consideration.
(a) Upon the terms and subject to the conditions of
this Agreement, and in consideration of the sale, assignment,
transfer and delivery of the Company Common Stock the Buyer will
pay, issue, and deliver to the Seller the Consideration. The
Consideration consists of (i) the Cash Consideration, (ii) the
Balance Sheet Consideration Amount and (iii) the Equity
Consideration.
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<PAGE> 6
(b) The "Cash Consideration" $5,000,000 payable as
follows: (i) The Buyer will pay to the Seller the sum of $400,000
at Closing and (ii) the Buyer will execute and deliver to Seller,
at Closing, Buyer's promissory note, dated as of the Closing, in
the form attached hereto as Annex II in the principal amount of
$4,600,000 (the "Note").
(c) The "Equity Consideration" is 16,500,000 shares,
par value $1.00 per share, of the Buyer's Common Stock. At Closing
Buyer will issue and deliver to Seller the Equity Consideration.
(d) The Balance Sheet Consideration Amount will be
determined and paid as set forth herein. Within five days
following the date on which the Final Net Asset Value is determined
pursuant to the provisions of Section 1.8, either Seller shall pay
to Buyer the Negative Net Asset Amount or Buyer shall pay to Seller
the Positive Net Asset Amount, in either case, together with
interest thereon at the annual rate of 4% per annum from the
Closing Date (as hereinafter defined) until the date paid (the
"Balance Sheet Consideration Amount").
1.3 Closing Balance Sheet. Within 60 days following the
Closing Date, the Buyer shall prepare and deliver to the Seller a
consolidated balance sheet of the Company and the Company
Subsidiaries as of the close of business on the Closing Date (the
"Preliminary Closing Balance Sheet"). The Preliminary Closing
Balance Sheet and the final balance sheet determined in accordance
with Sections 1.4, 1.5, 1.6 and 1.7 of this Article I (the "Final
Closing Balance Sheet") shall be prepared in accordance with
principles, practices and procedures that are the same as those
which resulted in the asset and liability values reflected in the
Balance Sheet dated September 26, 1993, which is attached hereto as
Annex III (the "Peg Balance Sheet"). The Preliminary Closing
Balance Sheet and the Final Closing Balance Sheet are sometimes
collectively referred to herein as the Preliminary and Final
Closing Balance Sheets. Notwithstanding the foregoing, the
following specific provisions shall take precedence over such
principles, practices and procedures in the preparation of the
Preliminary and Final Closing Balance Sheets:
(a) The asset and liability amounts included in the
Preliminary and Final Closing Balance Sheets will be the same as
those included in the Peg Balance Sheet except as necessary to
reflect those changes in the asset and liability values that result
from new transactions and actual changes in facts and circumstances
occurring during the period after (but not including) September 26,
1993 (the "Peg Date") through and including the Closing Date (the
"Change Period"). (To illustrate, if an item of machinery and
equipment was included in the Peg Balance Sheet at a net book value
of $1 million, but had not been used for the past several years, or
would no longer function, or would require major repairs to put it
in working condition, this item would be valued at $1 million in
the Preliminary and Final Closing Balance Sheets because no changes
in facts or circumstances occurred during the Change Period which
would warrant a reduction in the book value of that asset as of the
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<PAGE> 7
Closing Date that would not have been equally appropriate as of the
Peg Date. However, if a change in facts or circumstances occurred
during the Change Period which would have warranted a change in the
book value of such item of machinery and equipment that would not
have been equally appropriate as of the Peg Date, then the book
value of such item would be changed on the Preliminary and Final
Closing Balance Sheets. As further examples, any liability which
was under-accrued or over-accrued as of the Peg Date, absent a
change in facts and circumstances during the Change Period, will be
recorded so that it is equally under-accrued or over-accrued as of
the Closing Date, and the aging of accounts receivable may
constitute a change in facts and circumstances warranting a change
in the bad debt reserve.)
(b) The quantities of inventory used to determine the
inventory amount to be included in the Preliminary and Final
Closing Balance Sheets will be based on the results of a physical
inventory to be taken as of the opening of business on the Closing
Date in accordance with procedures to be mutually agreed to by the
parties. The physical inventory quantities will be priced
utilizing the same standard costs which were used in the
determination of the inventory amount reflected in the Peg Balance
Sheet and in the case of items which were not on hand as of the Peg
Date in accordance with the normal procedures of the Company. The
Preliminary and Final Closing Balance Sheets will include a LIFO
debit of $8,226,129 which is the same amount as the LIFO debit
included in the Peg Balance Sheet. The Preliminary and Final
Closing Balance Sheets will not include any reserve or accrual with
respect to inventory shrinkage but will include reserves or
accruals for any other inventory valuation matter that are equal in
amount to any such reserves or accruals that were included in the
Peg Balance Sheet, including without limitation, reserves and
accruals for excess, obsolete or slow moving inventory or for loss
jobs.
(c) No depreciation or amortization expense shall be
recorded for the Change Period. As a result, the accumulated
depreciation and amortization balances reflected in the Preliminary
and Final Closing Balance Sheets shall be the same as the amounts
included in the Peg Balance Sheet adjusted only for asset sales or
other dispositions in the ordinary course of business and in
accordance with the terms of this Agreement.
(d)The Peg Balance Sheet did not and the Preliminary and
Final Closing Balance Sheets will not include any payable or
receivable for (i) federal income tax or (ii) state and local
income tax balances. The deferred tax balances on the Preliminary
and Final Closing Balance Sheets will be the same as the deferred
tax balances included in the Peg Balance Sheet adjusted only to
reflect changes in the book or tax basis of the underlying assets
and liabilities which occur during the Change Period.
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<PAGE> 8
(e) The Peg Balance Sheet did not and the Preliminary and
Final Closing Balance Sheets will not include any cash either on-
hand or in banks other than cash equal to the "Receivables Purchase
Price" paid by the Seller to the Company pursuant to the Factoring
Agreement (as hereinafter defined) and the Peg Balance Sheet did
not and the Preliminary and Final Closing Balance Sheets will not
include any payable or receivable between the Company and the
Seller including any of Seller's Affiliates.
(f)The Peg Balance Sheet did not and the Preliminary and
Final Closing Balance Sheets will not include any assets or
liabilities with respect to the Company's Domestic Retirement and
Savings Plans or Seller U.K. Pension Plans (as such terms are
hereinafter defined).
(g) The Peg Balance Sheet did not and the Preliminary and
Final Closing Balance Sheets will not include any amounts as to
land, land improvements or buildings or environmental accruals with
respect to the Katy Road Site (as hereinafter defined).
(h) For purposes of this Agreement, a change in
translation rates between the U.S. dollar and various foreign
currencies, including the U.K. pound, during the Change Period will
be considered to be a change in facts and circumstances.
(i) The deferred tax asset amount included in the
Preliminary and Final Closing Balance Sheets will be net of a
deferred tax asset valuation allowance of $2,776,000 which is the
same as the deferred tax asset valuation allowance included in the
Peg Balance Sheet.
(j) The Peg Balance Sheet did not and the Preliminary and
Final Closing Balance Sheets will not include any amounts (assets
or liabilities) with respect to the Gulf Metals Site (as
hereinafter defined).
(k) The Peg Balance Sheet did not and the Preliminary and
Final Closing Balance Sheets will not include any adjustments to
asset or liability amounts, including any adjustments for currency
translation (increase or decrease) which may occur in connection
with a transfer as contemplated by this Agreement at other than
current book value of U.K. assets or other assets used in the
Business between (i) Seller and the Seller's Subsidiaries and (ii)
the Company and the Company's Subsidiaries.
(l) The Tech Mod accrual to be included in the
Preliminary and Final Closing Balance Sheets will be the same as
the Tech Mod accrual included in the Peg Balance Sheet.
(m) The Preliminary and Final Closing Balance Sheets will
include a prepaid asset equal to 1% of the trade and notes
receivable of the Company sold to Seller pursuant to the Factoring
Agreement.
-4-<PAGE>
<PAGE> 9
(n)The Peg Balance Sheet did not and the Preliminary and
Final Closing Balance Sheets will not include any reserve or
accrual with respect to any loss or potential liability which the
Company may have in connection with Item 1 in Section 3.7 of the
Seller Disclosure Schedule.
(o) The Preliminary and Final Closing Balance Sheets will
not include any accruals with respect to company matching
contributions to the Seller Salaried 401(k) Plan and the Seller
Hourly 401(k) Plan (as such terms are defined in Section 5.12(c)).
1.4 Seller's Review of Preliminary Closing Balance Sheet.
Seller shall have 30 days following receipt of the Preliminary
Closing Balance Sheet to review (the "Seller's Review") such
balance sheet. If Seller determines, in Seller's reasonable
judgment, that it has not been prepared in accordance with the
provisions of Section 1.3 then within the said 30-day period
allowed for Seller's Review, Seller shall prepare and deliver a
letter to Buyer (the "Seller's Letter") setting forth in reasonable
detail the adjustments that Seller determines are appropriate.
During the said 30-day period, Buyer shall grant Seller reasonable
access during normal business hours to the books and records of the
Company and its working papers pertaining to the Preliminary
Closing Balance Sheet and shall authorize the Company's auditors to
grant Seller's auditors access to any working papers or other
documents prepared by such auditors with respect to the Preliminary
Closing Balance Sheet. If Seller does not prepare and furnish
Seller's Letter to Buyer within the said 30-day period, then the
Preliminary Balance Sheet as prepared by Buyer will become the
Final Closing Balance Sheet.
1.5 Buyer Response to Seller's Letter. Buyer will have 15
days following receipt of Seller's Letter, if any, to review such
letter and prepare a written response (the "Buyer's Letter")
setting forth Buyer's position with respect to each adjustment
proposed by Seller in Seller's Letter. If Buyer does not prepare
and furnish Buyer's Letter to Seller within the 15 days allowed,
then all of the adjustments set forth in Seller's Letter shall be
deemed to have been accepted by Buyer, and the Final Closing
Balance Sheet shall be prepared by adjusting the Preliminary
Closing Balance Sheet for all of the adjustments set forth in
Seller's Letter.
1.6 Meeting to Resolve Proposed Adjustments. As soon as
practicable, but not later than ten days following the receipt by
Seller of Buyer's Letter, if any, the parties shall meet and
endeavor to mutually resolve any of Seller's adjustments not agreed
to in Buyer's Letter. If the parties reach agreement on the
remaining adjustments, if any, then the Final Closing Balance Sheet
shall be prepared by adjusting the Preliminary Closing Balance
Sheet for the adjustments agreed to in Buyer's Letter and those
resolved by the parties.
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<PAGE> 10
1.7 Resolution by Accounting Arbitrator. If the parties do
not meet within the said ten-day period, or they fail to agree to
meet at some later date, or they meet but are unable to resolve all
of the adjustments set forth in Seller's Letter to the mutual
satisfaction of both parties, then the parties, jointly, or if one
party is unwilling then the other party singly, shall engage the
New York office of the firm of Deloitte & Touche (the "Accounting
Arbitrator") to resolve any of Seller's adjustments which remain
unresolved. The Accounting Arbitrator shall be furnished with a
copy of the Agreement, the Peg Balance Sheet, the Preliminary
Closing Balance Sheet, Seller's Letter, Buyer's Letter and any
other relevant correspondence between the parties. The Accounting
Arbitrator must, within 30 days from the date such documents are
furnished, complete his review and render a written report setting
forth his conclusion with respect to each of Seller's adjustments
which were unresolved between the parties. The Accounting
Arbitrator shall be granted access to the books and records of the
Company as well as the working papers or other documents which
either party or its accountants may have which relate to the
Preliminary Closing Balance Sheet and any other documents or
information which the Accounting Arbitrator may deem appropriate.
The Accounting Arbitrator's review shall be limited to the purpose
of determining whether, in respect of each disputed adjustment, the
Seller's proposed adjustment or the Buyer's position with respect
to the Seller's proposed adjustment is more nearly in accordance
with the terms of this Agreement. The parties shall have the right
to submit written materials to the Accounting Arbitrator and make
oral presentations all in accordance with procedures to be set
forth in the engagement letter between the parties and the
Accounting Arbitrator. In arriving at his determination the
Accounting Arbitrator must select for each adjustment either the
Seller's proposed adjustment or Buyer's position with respect to
the Seller's proposed adjustment. The decision by the Accounting
Arbitrator shall be in writing and delivered to both Buyer and
Seller. The Accounting Arbitrator's said decision shall be
conclusive and binding upon the parties and may be entered and
enforced in any court of competent jurisdiction. The parties agree
to submit to the jurisdiction of any such court for the enforcement
of such award or decision. Each party shall pay 50% of the fees
and expenses of the Accounting Arbitrator. If the Accounting
Arbitrator is engaged, the Final Closing Balance Sheet will be
prepared by adjusting the Preliminary Closing Balance Sheet for any
of Seller's adjustments accepted by Buyer's Letter, those agreed to
by the parties and those determined by the Accounting Arbitrator.
1.8 Positive or Negative Purchase Price Adjustment. When the
Final Closing Balance Sheet is determined pursuant to the
provisions of Sections 1.4, 1.5, 1.6 or 1.7, then the net
asset/equity value set forth on such Final Closing Balance Sheet
will be the Final Net Asset Value and the Positive or Negative Net
Asset Amount shall be determined by comparing the Final Net Asset
Value to the net asset/equity amount set forth on the Peg Balance
Sheet (the "Peg Value"). If the Peg Value is more than the Final
Net Asset Value, then the excess is the Negative Net Asset Amount.
If the Final Net Asset Value is more than the Peg Value, then the
excess is the Positive Net Asset Amount.
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<PAGE> 11
1.9 Values. On or about the date that the number of shares
was fixed between the parties the estimated value of the Equity
Consideration was $47,437,500. This amount added to the Cash
Consideration of $5,000,000 is $52,437,500. These values will be
utilized by the Buyer for all relevant financial accounting
purposes.
1.10 Place of Payment. All payments to Seller under this
Agreement shall be made by wire transfer in immediately available
funds to Chase Manhattan Bank, New York, ABA #021000021, for credit
to Cooper Industries, Inc., account number 910-1-144781. All
payments to Buyer under this Agreement shall be made by wire
transfer in immediately available funds to Shawmut Bank, Boston,
for the credit to Wyman-Gordon Company, account number 030-03-
92612.
ARTICLE II
CLOSING
2.1 Time and Place of Closing. The closing of the transac-
tions contemplated by this Agreement (the "Closing") will take
place at the offices of the Seller, at 10:00 A.M. (Houston time) on
the fifth business day following the date on which all of the
conditions to each party's obligations hereunder have been
satisfied or waived; or at such other place or time or both as the
parties may agree. The date on which the Closing actually occurs
is hereinafter referred to as the "Closing Date." The Closing and
the consummation of the transactions contemplated hereby shall be
deemed effective as of the close of business on the Closing Date.
2.2 Deliveries by the Seller. At the Closing the Seller will
deliver the following to the Buyer:
(a)Stock certificates representing the Company Common
Stock, issued to and registered in the name or names of the Buyer
or its designee or designees, together with evidence of payment of
any applicable stock transfer taxes.
(b)The resignations of those members of the Boards of
Directors of the Company, the U.K. Sub or the Pipeline Sub (as such
terms are hereinafter defined) who will continue after the Closing
to be employees of the Seller.
(c)The stock books, stock ledgers, minute books and
corporate seals of the Company, the U.K. Sub and the Pipeline Sub;
provided that any of the foregoing items shall be deemed to have
been delivered pursuant to this Section 2.2(c) if delivered to or
otherwise located at the offices of the Company, the U.K. Sub or
the Pipeline Sub.
(d)The officers' certificate and other documents contem-
plated by Sections 6.1 and 6.3.
(e)All other documents required to be delivered by the
Seller on or prior to the Closing Date pursuant to this Agreement.
-7-<PAGE>
<PAGE> 12
2.3 Deliveries by the Buyer. At the Closing the Buyer will
deliver the following to the Seller:
(a)Stock certificates representing the Equity Consider-
ation issued to and registered in the name or names of the Seller
or its designee or designees, together with evidence of payment of
any stock transfer taxes.
(b)$400,000 in cash.
(c)The Note duly executed by the Buyer.
(d)A letter from Wachtell, Lipton, Rosen & Katz addressed
to the Seller and dated the Closing Date stating that (without
opining as to Massachusetts law) neither the execution nor delivery
of the Rights Agreement (as hereinafter defined) will constitute a
breach or violation of any of the provisions of the Original Rights
Agreement (as hereinafter defined).
(e)The officers' certificate and other documents contem-
plated by Sections 6.1 and 6.2.
(f)All other documents required to be delivered by the
Buyer on or prior to the Closing Date pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer as follows:
3.1 Organization. Each of the Seller, the Company, CFPD,
Ltd., incorporated under the laws of England and Scotland and a
wholly owned subsidiary of the Company (the "U.K. Sub"), and
Cameron Pipeline, Inc., a Texas corporation and a wholly owned
subsidiary of the Company (the "Pipeline Sub" and, together with
the U.K. Sub, the "Company Subsidiaries"), is a corporation duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation and has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
Each of the Seller, the Company and the Company Subsidiaries is
duly qualified or licensed and in good standing to do business in
each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed and in good
standing would not have a Material Adverse Effect. "Material
Adverse Effect," as used in this Article III, means a material
adverse effect on the business operations or financial condition of
the Company and the Company Subsidiaries, taken as a whole, or on
the Business (as defined below). The Seller has heretofore
delivered to the Buyer accurate and complete copies of the
Certificate of Incorporation and By-laws (or similar organizational
documents), as currently in effect, of the Company and each Company
Subsidiary. The Company has no subsidiaries other than the Company
-8-<PAGE>
<PAGE> 13
Subsidiaries and does not own, directly or indirectly, any capital
stock or other equity securities of any corporation or have any
direct or indirect equity ownership in any business other than the
Company Subsidiaries. The Company Subsidiaries have no
subsidiaries and do not own, directly or indirectly, any capital
stock or other equity securities of any corporation or have any
direct or indirect equity ownership in any business.
3.2 Capitalization.
(a)The authorized capital stock of the Company consists
of 5,000 shares of Company Common Stock, all of which are issued
and outstanding as of the date hereof. Except as listed in Section
3.2(a) of the Seller's disclosure schedule (the "Seller Disclosure
Schedule"), the authorized capital stock of the U.K. Sub consists
of 1,000,000 shares of common stock (the "U.K. Stock"), one share
of which is issued and outstanding as of the date hereof. The
authorized capital stock of the Pipeline Sub consists of 1,000
shares of common stock par value $1.00 per share (the "Pipeline
Stock"), all of which are issued and outstanding as of the date
hereof. All of the shares of Company Common Stock are owned by the
Seller, and all of the shares of U.K. Stock and Pipeline Stock are
owned by the Company, and are in each case validly issued, fully
paid, nonassessable and free of preemptive rights. Except pursuant
to this Agreement, there are no subscriptions, options, warrants,
convertible or exchangeable securities, calls, rights or other
agreements or commitments obligating the Seller, the Company or the
Company Subsidiaries to issue, transfer or sell any securities of
the Company or of the Company Subsidiaries.
(b)The Seller has good and marketable title to the shares
of Company Common Stock, and the Company has good and marketable
title to the shares of U.K. Stock and Pipeline Stock, free and
clear of all pledges, security interests, liens, charges,
encumbrances, equities, claims and options of whatever nature.
Upon consummation of the transactions contemplated hereby, the
Buyer will acquire good and marketable title to the shares of
Company Common Stock, free and clear of all pledges, security
interests, liens, charges, encumbrances, equities, claims and
options of whatever nature.
(c)Section 3.2(c) of the Seller Disclosure Schedule sets
forth the name, jurisdiction of incorporation and capitalization of
each Company Subsidiary and the jurisdictions in which the Company
and each Company Subsidiary are qualified to do business.
3.3 Authority Relative to This Agreement. The Seller has
full corporate power and authority to execute and deliver this
Agreement, the Investment Agreement and the other instruments,
agreements and documents contemplated by this Agreement and the
Investment Agreement (the "Other Agreements") and to perform its
obligations hereunder and thereunder. The execution and delivery
of this Agreement, the Investment Agreement and the Other
Agreements and the consummation of the transactions contemplated
hereby or thereby have been duly and validly authorized by the
Board of Directors of the Seller and no other corporate proceedings
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<PAGE> 14
on the part of the Seller are necessary to authorize this
Agreement, the Investment Agreement and the Other Agreements or to
consummate the transactions so contemplated. This Agreement and
the Investment Agreement have been duly and validly executed and
delivered by the Seller and (assuming they are duly and validly
executed by the Buyer) constitute, and the Other Agreements will
when executed (assuming due and valid execution by any other
parties thereto) constitute, valid and binding agreements of the
Seller, enforceable against the Seller in accordance with their
respective terms, except as such enforceability may be limited by
respective applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by
general equitable principles (regardless of whether enforceability
is considered in a proceeding in equity or at law).
3.4 Consents and Approvals; No Violations. Except for
applicable requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and German pre-merger notification
laws, no filing with, and no permit, authorization, consent or
approval of, any governmental body or authority, including courts
of competent jurisdiction, domestic or foreign ("Governmental
Entity"), is necessary for the consummation by the Seller of the
transactions contemplated by this Agreement and the Investment
Agreement and the Other Agreements. Except as set forth in Section
3.4 of the Seller Disclosure Schedule, neither the execution and
delivery of this Agreement, the Investment Agreement and the Other
Agreements by the Seller nor the consummation by the Seller of the
transactions contemplated hereby or thereby nor compliance by the
Seller with any of the provisions hereof or thereof will (i)
conflict with or breach any provision of the Certificate of
Incorporation or By-laws (or similar organizational documents) of
the Seller, any Seller Subsidiary (as defined below), the Company
or any Company Subsidiary, (ii) violate or breach any provision of,
or constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, cancellation
or acceleration or result in the creation of any lien) under, any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or
obligation to which the Seller, the Company or any Company
Subsidiary is a party or by which the Seller, the Company or any
Company Subsidiary or any of their properties or assets may be
bound, or (iii) violate any order, judgment, writ, injunction,
decree, statute, rule or regulation applicable to the Seller, the
Company or any Company Subsidiary or any of their properties or
assets, except in the case of clauses (ii) and (iii) for
violations, breaches or defaults which would not either have a
Material Adverse Effect or prevent or delay the consummation of the
transactions contemplated hereby. For purposes of this Agreement,
the "Seller Subsidiaries" means the subsidiaries of the Seller
other than the Company and the Company Subsidiaries.
3.5 Financial Statements. Attached hereto as Exhibit A are
true and complete copies of (i) the audited combined balance sheets
of the Cameron Forged Products Division of the Seller, which
includes the Company, that portion of Cooper (Great Britain) Ltd.
to the extent that it previously conducted all or part of the
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<PAGE> 15
Business (as hereinafter defined) and the Pipeline Sub
(collectively, "Cameron"), as of December 31, 1993 and December 31,
1992 (collectively the "Company Balance Sheets"), and (ii) the
related audited combined statements of operations and cash flows
for each of the years ended December 31, 1991, 1992 and 1993
(collectively with the Company Balance Sheets, the "Company
Financial Statements"), together with the notes thereto and an
opinion of E&Y relating thereto. The Company Financial Statements
and the Peg Balance Sheet have been prepared from, and are in
accordance with, the books and records of Cameron and the books and
records of Seller that pertain to Cameron. The Company Balance
Sheets fairly present the financial position of Cameron as of their
respective dates, and the other related statements included in the
Company Financial Statements fairly present the results of
operations and changes in financial position of Cameron for the
periods then ended. The Company Financial Statements have been
prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis, except as
otherwise disclosed in the notes thereto.
3.6 Absence of Certain Changes. Except as disclosed in
Section 3.6 of the Seller Disclosure Schedule or in Annex IV
hereto, or as disclosed in the Company Financial Statements, since
September 30, 1993, none of the Company, the Company Subsidiaries
and the Business has (i) taken any of the actions set forth in
Section 5.1(a) through Section 5.1(o) of this Agreement, (ii)
suffered a Material Adverse Effect, or any change in circumstances
that is reasonably likely to have a Material Adverse Effect (other
than any change generally affecting the industry in which the
Business is engaged), or (iii) entered into any transaction, or
conducted its business or operations, other than in the ordinary
course of business and consistent with past practice.
3.7 No Undisclosed Liabilities. Any reference in this
Agreement to Seller's Knowledge shall be a reference solely to the
actual knowledge of Kenneth L. Hardcastle and his direct reports,
and Michael J. Sebastian, D. Bradley McWilliams, Alan J. Hill,
Robert W. Teets, Stephen V. O'Neill, Donald R. Sheley, Jr. and
Bruce E. Himmelreich. Seller's Knowledge shall not include any
constructive knowledge, imputed knowledge or any knowledge
attributed to Seller solely because Seller or its agents or
employees should have known the matter in question. Except as and
to the extent set forth in Section 3.7 of the Seller Disclosure
Schedule, to Seller's Knowledge, neither the Company nor any
Company Subsidiary has any liabilities (absolute, accrued,
contingent or otherwise) of a kind required to be reflected in a
balance sheet prepared in accordance with GAAP, or required to be
disclosed in the notes thereto, except (a) liabilities which were
reflected in the December 31, 1992, or the December 31, 1993,
Company Balance Sheets or disclosed in the notes thereto, (b)
liabilities which were incurred since December 31, 1993 in the
ordinary course of business, consistent with past practice and
which would be reflected in a balance sheet prepared in accordance
with GAAP, (c) liabilities which have not had a Material Adverse
Effect, and are not reasonably likely to have a Material Adverse
-11-<PAGE>
<PAGE> 16
Effect, and (d) liabilities incurred in connection with this
Agreement. Except as disclosed in Section 3.7 of the Seller
Disclosure Schedule or the Exhibits or Annexes hereto, there are no
material obligations or liabilities of the Company or the Company
Subsidiaries to the Seller or any of the Seller Subsidiaries that
will exist after the Closing Date.
3.8 Information in Proxy Statement. None of the information
supplied in writing by the Seller, the Seller Subsidiaries, the
Company or the Company Subsidiaries (including without limitation
the Company Financial Statements and any other financial statements
of the Company and the Company Subsidiaries) for inclusion or
incorporation by reference in the proxy statement relating to the
meeting of the Buyer's shareholders to be held with respect to the
transactions contemplated by this Agreement (the "Proxy Statement")
will, at the time the Proxy Statement is mailed to the shareholders
of the Buyer or at the time of the meeting of shareholders of the
Buyer, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
3.9 Litigation. Except as disclosed in Section 3.9 of the
Seller Disclosure Schedule, (a) there are no existing orders,
injunctions, judgments or decrees of any Governmental Entity which
apply to the Company or any Company Subsidiary or any assets,
properties or operations of the foregoing and (b) there are no
actions, suits or proceedings, at law or in equity, pending, or to
Seller's Knowledge, threatened, or to Seller's Knowledge, any
investigations pending or threatened involving the Company or the
Company Subsidiaries by or before any Governmental Entity which in
the case of either Clause (a) or (b) above are reasonably likely to
have a Material Adverse Effect.
3.10 Compliance With Applicable Law. Except as set forth in
Section 3.10 of the Seller Disclosure Schedule, and except with
respect to environmental matters, which are addressed in Section
3.15 hereof, (a) the Company and the Company Subsidiaries are, and
the Business has been conducted, in compliance with all laws,
ordinances, rules, regulations, decrees and orders of all Govern-
mental Entities ("Laws"), except where the failure to be in
compliance is not reasonably likely to have a Material Adverse
Effect and (b) the Seller, the Company, and the Company
Subsidiaries hold all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities necessary to
conduct the Business as currently conducted (the "Company
Permits"), and such Company Permits are in full force and effect,
except for such failure to hold or be in full force and effect
which would not be reasonably likely to have a Material Adverse
Effect. To Seller's Knowledge, no suspension, cancellation or
termination of any of the Company Permits is threatened or imminent
that would be reasonably likely to have a Material Adverse Effect.
-12-<PAGE>
<PAGE> 17
3.11 Taxes. The Company has duly filed all returns of income
Taxes (as hereinafter defined) of the Company and the Company
Subsidiaries and all material returns of other Taxes of the Company
and the Company Subsidiaries required to be filed by them or such
income or other returns have been included in a return filed by an
affiliated group or by a consolidated, unitary or combined group of
companies of which the Company is or has been a member, and the
Seller or the Company has duly paid, caused to be paid or made
adequate provision for the payment of all such Taxes required to be
paid in respect of the periods covered by such returns and has made
adequate provision for payment of all Taxes anticipated to be
payable in respect of all calendar periods since the periods
covered by such returns. Except as disclosed in Section 3.11 of
the Seller Disclosure Schedule, no material deficiency or
adjustment in respect of any Taxes against the Company or any
Company Subsidiary remains unpaid and no material claim or
assessment for any such deficiency or adjustment is pending or, to
Seller's Knowledge, threatened. There are no material claims for
Taxes (other than Taxes attributable to Seller or the Seller
Subsidiaries) against the Company or any Company Subsidiaries which
might result in a lien, charge or encumbrance on any of the assets
of the Company or any Company Subsidiary.
3.12 ERISA; Employee Benefits. The Seller hereby represents
and warrants to Buyer that as of the date hereof and as of the
Closing Date:
(a)Section 3.12(a) of the Seller Disclosure Schedule
identifies each Seller Employee Plan with an annual cost in excess
of $100,000. The Seller has furnished or made available to Buyer
true and complete copies of such Seller Employee Plans (and, if
applicable, related trust agreements) and all amendments thereto
and written interpretations thereof together with (i) the most
recent annual report prepared in connection with any such Seller
Employee Plan (Form 5500 or 5500-C including, if applicable,
Schedules A and B thereto), (ii) the summary plan description
currently in effect for each such Seller Employee Plan and all
modifications thereof, (iii) for each such Seller Employee Plan
with respect to which there is no summary plan description in ef-
fect, a written description of such Seller Employee Plan including
all materials distributed or made available to employees with re-
spect to such Seller Employee Plan and (iv) the most recent
financial statements and actuarial reports (if any) for each such
Seller Employee Plan and its related trust (if any), (collectively,
the "Seller Employee Plan Documents").
(b)Neither the Company nor the Seller nor any subsidiary
of either has incurred, or reasonably expects to incur prior to the
Closing Date, any Controlled Group Liability that could become a
material liability of Buyer or any Buyer Subsidiary (including the
Company) after the Closing Date. Except as set forth on Section
3.12(b) of the Seller Disclosure Schedule, no Seller Employee Plan
with an annual cost in excess of $100,000 is a Title IV Plan. No
Seller Employee Plan is a Multiemployer Plan.
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<PAGE> 18
(c)Except as set forth in Section 3.12(c) of the Seller
Disclosure Schedule, each Seller Employee Plan with an annual cost
in excess of $100,000 has been maintained in compliance in all
material respects with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations including but not limited to ERISA and the Code.
Neither the Seller nor any Related Person has engaged in, nor to
Seller's Knowledge has any other Person engaged in, any "prohibited
transaction" (as defined in ERISA and the Code) with respect to any
such Seller Employee Plan.
(d)Section 3.12(d) of the Seller Disclosure Schedule
identifies each Seller Benefit Arrangement with an annual cost in
excess of $100,000. The Seller has furnished or made available to
Buyer true and complete copies or, if no written document exists,
descriptions of each such Seller Benefit Arrangement. Each such
Seller Benefit Arrangement has been maintained in compliance in all
material respects with its terms and with the requirements pre-
scribed by any and all applicable statutes, orders, rules and
(e)Section 3.12(e) of the Seller Disclosure Schedule
identifies each Seller International Plan with an annual cost in
excess of $100,000. The Seller has furnished or made available to
Buyer true and complete copies or, if no written document exists,
descriptions of each such Seller International Plan. Each such
Seller International Plan has been maintained in all material
respects in compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations (including any special provisions relating to qualified
plans where such Seller International Plan was intended to so
qualify) and has been maintained in good standing with applicable
regulatory authorities.
(f)Except as set forth on Section 3.12(f) of the Seller
Disclosure Schedule, there are no actions, suits, arbitrations,
inquiries, investigations or other proceedings (other than routine
claims for benefits), pending or, to the Seller's Knowledge,
threatened, with respect to any Seller Employee Plan, Seller
Benefit Arrangement or Seller International Plan which would be
reasonably likely to have a Material Adverse Effect.
(c) Except as set forth on Section 3.12(g) of the Seller
Disclosure Schedule, and except for coverage mandated by Section
4980B of the Code, no Employees or Former Employees and no
beneficiaries or dependents of Employees or Former Employees are or
may become entitled under any Seller Employee Plan, Seller Benefit
Arrangement or Seller International Plan to post-employment welfare
benefits of any kind, including without limitation death or medical
benefits, having an annual cost, in the aggregate, in excess of
$100,000.
(h)Except as set forth on Section 3.12(h) of the Seller
Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement will not result in any obligation to
pay severance, separation pay or other compensation in the
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<PAGE> 19
aggregate in excess of $100,000 associated with the termination of
employment to any Employee or Former Employee, result in any
increase in the amount of compensation or benefits or accelerate
the vesting or timing of any payment of any compensation or
benefits payable to or with respect to any Employee or Former
Employee, or cause any amounts paid or payable by the Company, the
Buyer or their subsidiaries to or with respect to any Employee or
Former Employee to fail to be deductible for U. S. federal income
tax purposes by reason of Section 280G of the Code.
(i)Except (i) as set forth on Section 3.12(i) of the
Seller Disclosure Schedule, (ii) pursuant to the terms of each
Seller Employee Plan, Seller International Plan and Seller Benefit
Arrangement, respectively, (iii) pursuant to any collective
bargaining agreement or (iv) pursuant to applicable law, there are
no arrangements, understandings or agreements, written or
unwritten, formal or informal, which would prevent the termination
of each Seller Employee Plan, Seller International Plan and Seller
Benefit Arrangement, respectively, in each case, without any
liability to the Company in excess of $100,000, other than for
accrued benefits thereunder.
3.13 Intellectual Property. Section 3.13 of the Seller
Disclosure Schedule sets forth a list of all of the Company's or
any of the Company Subsidiaries' domestic and foreign patents and
patent applications currently being used in the Business. "Company
Intellectual Property" means all of the Company's or any of the
Company Subsidiaries' domestic and foreign letters patent, patents,
patent applications, patent licenses, trademark licenses, software
licenses and knowhow licenses, trade names, trademarks, copyrights,
service marks, trademark registrations and applications, service
mark registrations and applications and copyright registrations and
applications currently being used in the Business. Except as set
forth in Section 3.13 of the Seller Disclosure Schedule and except
for any claim, infringement, act or omission that would not be
reasonably likely to have a Material Adverse Effect (a) no claim is
pending or, to Seller's Knowledge, threatened which alleges that
any of the Company Intellectual Property is invalid or
unenforceable or which is otherwise adverse to the right, title and
interest of the Company and the Company Subsidiaries in and to the
Company Intellectual Property, (b) to Seller's Knowledge, no
actions or operations of any other person, association,
corporation, individual, partnership, trust or other entity or
organization, including a Governmental Entity (a "Person") infringe
upon or conflict with the right, title or interest of the Company
and the Company Subsidiaries in and to the Company Intellectual
Property, and (c) to Seller's Knowledge, no Company Intellectual
Property infringes on the rights owned or held by any other Person.
Except as set forth in Section 3.13 of the Seller Disclosure
Schedule, no existing contract, agreement or understanding between
the Seller, the Company or any Company Subsidiary and any other
party would impede or prevent the continued use by the Company and
the Company Subsidiaries of the entire right, title and interest of
the Company and the Company Subsidiaries in and to the Company
Intellectual Property except such contracts or understandings that
would not be reasonably likely to have a Material Adverse Effect.
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<PAGE> 20
3.14 Material Contracts; No Defaults. Except as set forth in
Section 3.14 of the Seller Disclosure Schedule or in the notes to
the Company Balance Sheets, neither the Company nor any Company
Subsidiary is a party to any written: (a) material consulting
agreement or collective bargaining agreement; (b) indenture,
mortgage, note or other agreement relating to the borrowing of
money not in the ordinary course of business by the Company or any
Company Subsidiary or the guaranty by the Company or any Company
Subsidiary of an obligation of a third party for the borrowing of
money; (c) agreement which involves a certain (rather than
contingent) obligation of the Company or any Company Subsidiary of
more than $1,000,000 in any twelve-month period; or (d) agreement
containing covenants limiting the ability of the Company or any
Company Subsidiary to compete in any line of business with any
Person or in any area or territory (collectively, the "Company
Contracts"). Except as set forth in Section 3.14 of the Seller
Disclosure Schedule, (1) there is not, under any of the Company
Contracts, any existing default or event of default or event or
condition which, with or without due notice or lapse of time or
both, would constitute a default or event of default on the part of
the Company or any Company Subsidiary, or, to the Seller's
Knowledge, the other parties thereto, except such defaults, events
of default and other events which would not be reasonably likely to
have a Material Adverse Effect, and (2) the Company Contracts are
(i) valid and binding obligations of the Company or the Company
Subsidiaries and, to the Seller's Knowledge, the other parties
thereto, (ii) are in full force and effect and (iii) are
enforceable in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general equitable principles
(regardless of whether enforceability is considered in a proceeding
in equity or at law).
3.15 Environmental Compliance.
(a)Except as set forth on Section 3.15 of the Seller
Disclosure Schedule, all operations, properties and business
activities of the Company, the Company Subsidiaries and the
Business are in compliance with all Environmental Laws and neither
the Company nor any of the Company Subsidiaries has or is subject
to any claim, notice of investigation or liability based upon any
Environmental Law or arising from the disposal of any Regulated
Materials except where such failure to be in compliance or such
claim, notice of investigation or liability would not be reasonably
likely to have a Material Adverse Effect.
(b)"Environmental Laws" means all Laws and Company Permits
concerning, relating to or controlling (i) the handling, transpor-
tation, sale, offering for sale, storage, treatment, discharge,
disposal, release, use, processing or manufacture of any material
or substance or (ii) the introduction of any material, substance,
radiation or other emission into the environment or workplace,
including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), the Solid
Waste Disposal Act as amended by the Resource Conservation and
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<PAGE> 21
Recovery Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, and the Occupational Safety and Health Act.
(c)"Regulated Material" means any material, substance,
radiation or emission which is regulated by or subject to any
Environmental Law.
3.16 Title to Real Property. Section 3.16 of the Seller
Disclosure Schedule sets forth a list of all of the Owned Real
Property reflected on the September 30, 1993 Company Balance Sheet
or acquired by the Company or any of the Company Subsidiaries sub-
sequent to the date thereof and conveyed hereby to Buyer (the
"Company Real Property"), together with all Company Leases (as
defined below). The Company or one of the Company Subsidiaries has
good and marketable title to the Company Real Property, free and
clear of all mortgages, liens, pledges, charges or encumbrances of
any kind or character, except for current property taxes not yet
payable or such encumbrances that would not be reasonably likely to
have a Material Adverse Effect. To Seller's Knowledge, there is no
appropriation, condemnation or like proceeding relating to the
Company Real Property. Each lease for any leased real property (a
"Company Lease") is a valid and binding lease under which the
Company or one of the Company Subsidiaries is entitled to occupy
and use the parcel of real property for its current use to which
such Company Lease relates except for such failure to be valid and
binding as would not be reasonably likely to have a Material
Adverse Effect.
3.17 Company Assets. Except for those assets, properties,
contract rights, or licenses listed on Section 3.17 of the Seller
Disclosure Schedule, the Company and the Company Subsidiaries will
own or have at Closing the right to use all of the assets,
properties, contract rights and licenses currently used to operate
the Business, or reflected on the September 30, 1993 Company
Balance Sheet (the "Company Assets"), except for cases in which the
failure to own or to have such right to use would not be reasonably
likely to have a Material Adverse Effect. To the Seller's
Knowledge, the consummation of the transactions contemplated by
this Agreement will not, in and of itself, adversely affect the
ownership of or right to use the Company Assets, the Company
Intellectual Property and the Company Permits of the Company or the
Company Subsidiaries, except in cases where the failure to own or
to have such right to use would not be reasonably likely to have a
Material Adverse Effect.
3.18 Labor Matters. Except as set forth on Section 3.18 of
the Seller Disclosure Schedule and except as would not constitute a
Material Adverse Effect:
(a)there is no unfair labor practice complaint against
the Company or any of the Company Subsidiaries pending or, to the
Seller's Knowledge, threatened before the National Labor Relations
Board or the Ministry of Labor, as the case may be;
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<PAGE> 22
(b)there is no labor strike, dispute, slowdown or
stoppage pending or, to the Seller's Knowledge, threatened against
or affecting the Company, any of the Company Subsidiaries or the
Business; and
(c)there is no grievance or arbitration proceeding
arising out of or under collective bargaining agreements pending
or, to the Seller's Knowledge, threatened against or affecting the
Company, any of the Company Subsidiaries or the Business.
3.19 Purchase for Investment. The Seller is acquiring the
Equity Consideration for its own account as principal, with no view
to any distribution of any of the Equity Consideration or any
beneficial interest in the Equity Consideration to any third party,
and the Seller has no agreement, understanding or arrangement to
sell, pledge or otherwise dispose of the Equity Consideration or
any beneficial interest in the Equity Consideration to any other
Person. The Seller understands and agrees that the Equity
Consideration has not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or applicable state
securities laws, and therefore may not be sold or otherwise
transferred, unless the Equity Consideration is registered under
the Securities Act and any applicable state securities laws or
unless an exemption from such registration is available.
3.20 No Beneficial Ownership of the Buyer's Stock. The Seller
and its Affiliates do not hold, have the right to vote or direct
the voting of, or otherwise beneficially own any shares of Common
Stock, par value $1.00 per share, of the Buyer (the "Buyer Common
Stock").
3.21 Change in Control. Except as set forth in Section 3.21
of the Seller Disclosure Schedule or in cases which would not be
reasonably likely to have a Material Adverse Effect, neither the
Company nor any Company Subsidiary is party to any contract,
agreement or understanding relating to employment which contains a
"change in control," "potential change in control" or similar
provision.
3.22 Business of the Company. To the Seller's Knowledge, the
Company has not engaged in any businesses other than the Business,
and the Pipeline Sub has not engaged in any businesses other than
the transmission of natural gas.
3.23 Representations Accurate. To Seller's Knowledge, the
representations and warranties of the Seller set forth in this
Agreement and qualified by materiality or by Material Adverse
Effects shall be true and correct (subject to such qualification)
as of the Closing Date (except for representations and warranties
that expressly speak only as of some other time), subject to the
disclosures in the Seller Disclosure Schedule as supplemented or
amended through the Closing Date and excluding those failures to be
true and correct that do not have a Material Adverse Effect. To
Seller's Knowledge, the representations and warranties of the
Seller set forth in this Agreement and not qualified by materiality
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<PAGE> 23
or by Material Adverse Effects shall be true and correct in all
material respects as of the Closing Date (except for
representations and warranties that expressly speak only as of some
other time), subject to the disclosures in the Seller Disclosure
Schedule as supplemented or amended through the Closing Date and
excluding those failures to be true and correct that do not have a
Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
4.1 Organization. Except as disclosed in Section 4.1 of the
Buyer's disclosure schedule attached hereto (the "Buyer Disclosure
Schedule"), each of the Buyer and its Subsidiaries (collectively,
the "Buyer Subsidiaries") is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on
its business as now being conducted. Each of the Buyer and the
Buyer Subsidiaries is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary,
except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not have a
Material Adverse Effect. "Material Adverse Effect," as used in
this Article IV, means a material adverse effect on the business,
operations or financial condition of the Buyer and Buyer Subsidiar-
ies taken as a whole. The Buyer has heretofore delivered to the
Seller accurate and complete copies of the Articles of Organization
and By-laws, as currently in effect, of the Buyer.
4.2 Capitalization.
(a)The authorized capital stock of the Buyer consists of
(i) 35,000,000 shares of Buyer Common Stock, of which 17,984,249
shares are issued and outstanding as of the date hereof, and (ii)
5,000,000 shares of preferred stock, no par value, none of which
are issued or outstanding as of the date hereof. All of the issued
and outstanding shares of Buyer Common Stock are (and the Equity
Consideration will upon issuance be) validly issued, fully paid,
nonassessable and free of preemptive rights. As of the date
hereof, approximately 1,690,609 shares of Buyer Common Stock were
issuable upon exercise of stock options ("Stock Options") granted
under the Buyer's Long-Term Incentive Plan and Executive Long-Term
Incentive Program (collectively, the "Stock Plans") and an in-
determinate number of shares of Buyer Common Stock were reserved
for issuance in accordance with the Rights Agreement, dated as of
October 19, 1988 by and between the Buyer and State Street Bank &
Trust Company, as Rights Agent (the "Original Rights Agreement").
Except pursuant to this Agreement, the Stock Plans, the Original
Rights Agreement and the Buyer's Savings/Investment Plan or as
disclosed in Section 4.2 of the Buyer Disclosure Schedule, there
are no subscriptions, options, warrants, calls, rights or other
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<PAGE> 24
agreements or commitments obligating the Buyer to issue, transfer
or sell any of its securities, including any right of conversion or
exchange under any outstanding security.
(b)Upon consummation of the transactions contemplated
hereby, the Seller will acquire good and marketable title to the
Equity Consideration, free and clear of all pledges, security
interests, liens, charges, encumbrances, equities, claims and
options of whatever nature.
(c)Except as disclosed in Section 4.2 of the Buyer
Disclosure Schedule, the only direct or indirect subsidiaries of
the Buyer are those named in the Buyer SEC Reports. Except as
disclosed in Section 4.2 of the Buyer Disclosure Schedule, or in
the Buyer SEC Reports, the Buyer does not own, directly or
indirectly, any capital stock or other equity securities of any
corporation or have any direct or indirect equity ownership
interest in any business. All of the outstanding shares of capital
stock of each of the Buyer Subsidiaries have been validly issued
and are fully paid, nonassessable and free of preemptive rights
and, except as set forth in Section 4.2 of the Buyer Disclosure
Schedule are owned by either the Buyer or another of the Buyer
Subsidiaries free and clear of all pledges, security interests,
liens, charges, encumbrances, equities, claims and options of
whatever nature. Except as disclosed in Section 4.2 of the Buyer
Disclosure Schedule there are no outstanding subscriptions,
options, warrants, calls, rights, convertible securities or other
agreements or commitments of any character relating to the issued
or unissued capital stock or other securities of any Buyer
Subsidiary, or otherwise obligating the Buyer or any Buyer
Subsidiary to issue, transfer or sell any such securities. Except
for the Investment Agreement, there are not now, and at the Closing
Date there will not be, any voting trusts or other agreements or
understandings to which the Buyer or any Buyer Subsidiary is a
party or is bound with respect of the voting of the capital stock
of the Buyer or any Buyer Subsidiary. Except as set forth above or
in Section 4.2 of the Buyer Disclosure Schedule, there are no
persons or entities (other than Buyer Subsidiaries) in which the
Buyer or any Buyer Subsidiary has any voting rights or equity
interests.
4.3 Authority Relative to this Agreement. The Buyer has full
corporate power and authority to execute and deliver this
Agreement, the Investment Agreement and the Other Agreements and to
perform its obligations hereunder and thereunder. The execution
and delivery of this Agreement, the Investment Agreement and the
Other Agreements and the consummation of the transactions
contemplated hereby or thereby have been duly and validly
authorized and approved by the Board of Directors of the Buyer,
including by a two-thirds vote of the Continuing Directors at a
meeting at which a Continuing Director Quorum (as such terms are
defined in the Buyer's Articles of Organization) was present for
purposes of approving the amendment to Article 6(c)2 of the Buyer's
Articles of Organization in the form attached hereto as Annex V
(the "Fair Price Charter Amendment")), and no other corporate
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<PAGE> 25
proceedings on the part of the Buyer are necessary to authorize
this Agreement, the Investment Agreement and the Other Agreements
(other than the approval of the transactions contemplated hereby by
the requisite affirmative vote of the holders of Buyer Common
Stock). This Agreement and the Investment Agreement have been duly
and validly executed and delivered by the Buyer and (assuming they
are duly and validly executed by the Seller) constitute, and the
Other Agreements will when executed constitute, valid and binding
agreements of the Buyer, enforceable against the Buyer in
accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by
general equitable principles (regardless of whether enforceability
is considered in a proceeding in equity or at law).
4.4 Consents and Approvals; No Violations. Except as
disclosed in Section 4.4 of the Buyer Disclosure Schedule, and
except for applicable requirements of the Exchange Act and German
pre-merger notification laws, no filing with, and no permit,
authorization, consent or approval of, any Governmental Entity, is
necessary for the consummation by the Buyer of the transactions
contemplated by this Agreement and the Investment Agreement.
Except as set forth in Section 4.4 of the Buyer Disclosure Sched-
ule, neither the execution and delivery of this Agreement, the
Investment Agreement and the Other Agreements by the Buyer nor the
consummation by the Buyer of the transactions contemplated hereby
or thereby nor compliance by the Buyer with any of the provisions
hereof or thereof will (i) conflict with or breach any provision of
the Articles of Organization or By-Laws (or similar organizational
documents) of the Buyer or any Buyer Subsidiary, (ii) violate or
breach any provision of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration or result in the creation
of any lien) under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, contract, agreement
or other instrument or obligation to which the Buyer or any Buyer
Subsidiary is a party or by which any of them or any of their
properties or assets may be bound, or (iii) violate any order,
judgment, writ, injunction, decree, statute, rule or regulation
applicable to the Buyer, any Buyer Subsidiary or any of their
properties or assets, except in the case of clauses (ii) and (iii)
for violations, breaches or defaults which would not either have a
Material Adverse Effect or prevent or delay the consummation of the
transactions contemplated hereby.
4.5 Reports. Except as disclosed in Section 4.5 of the Buyer
Disclosure Schedule, the Buyer has filed all required forms,
reports and documents with the Securities and Exchange Commission
(the "SEC") since January 1, 1990 (collectively, the "Buyer SEC
Reports"), each of which has complied in all material respects with
all applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the Exchange Act. Except as
disclosed in Section 4.5 of the Buyer Disclosure Schedule, as of
their respective dates, none of the Buyer SEC Reports, including
without limitation, any financial statements or schedules
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<PAGE> 26
(including the related notes) included therein, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make
the statements therein not misleading. Each of the balance sheets
(including the related notes) included in the Buyer SEC Reports
fairly presents the consolidated financial position of the Buyer
and the Buyer Subsidiaries as of the date thereof, and the other
related statements (including the related notes) included therein
fairly present the consolidated results of operations and cash
flows of the Buyer and the Buyer Subsidiaries for the respective
periods indicated. Each of the financial statements (including the
related notes) included in the Buyer SEC Reports has been prepared
from and is in accordance with the books and records of the Buyer
and has been prepared in accordance with GAAP consistently applied
during the period involved, except as otherwise noted therein and
except for year-end audit adjustments, consisting of normal and
recurring adjustments. The Buyer has delivered to the Seller
accurate and complete copies of all Buyer SEC Reports filed since
January 1, 1990.
4.6 Absence of Certain Changes. Except as disclosed in
Section 4.6 of the Buyer Disclosure Schedule or as disclosed in the
Buyer SEC Reports, since December 31, 1992, neither the Buyer nor
any of the Buyer Subsidiaries has (i) taken any actions set forth
in Section 5.2(a) through Section 5.2(l) of this Agreement, (ii)
suffered a Material Adverse Effect, or (iii) entered into any
transaction, or conducted its business or operations, other than in
the ordinary course of business and consistent with past practice.
4.7 No Undisclosed Liabilities. Any reference in this
Agreement to Buyer's Knowledge shall be a reference solely to the
actual knowledge of John M. Nelson, David P. Gruber, and their
direct reports. Buyer's Knowledge shall not include any
constructive knowledge, imputed knowledge or any knowledge
attributed to Buyer solely because Buyer or its agents or employees
should have known the matter in question. Except as and to the
extent set forth in Section 4.7 of the Buyer Disclosure Schedule,
to Buyer's Knowledge, neither the Buyer nor any Buyer Subsidiary
has any liabilities (absolute, accrued, contingent or otherwise) of
a kind required to be reflected in a balance sheet prepared in
accordance with GAAP, or required to be disclosed in the notes
thereto, except (a) liabilities which were reflected in the audited
consolidated balance sheet of the Buyer and the Buyer Subsidiaries
as of December 31, 1992 incorporated in the Buyer's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992 (the
"Buyer Balance Sheet") or disclosed in the notes thereto, (b)
liabilities which were incurred since December 31, 1992 in the
ordinary course of business, consistent with past practice and
which would be reflected in a balance sheet prepared in accordance
with GAAP, (c) liabilities which do not constitute a Material
Adverse Effect and would not be reasonably likely to constitute a
Material Adverse Effect and (d) liabilities incurred in connection
with this Agreement.
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<PAGE> 27
4.8 Information in Proxy Statement. None of the information
supplied in writing by the Buyer for inclusion or incorporation by
reference in the Proxy Statement will, at the time the Proxy
Statement is mailed to the shareholders of the Buyer and at the
time of the meeting of shareholders of the Buyer, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement will comply in
all material respects with the provisions of the Exchange Act, and
the rules and regulations thereunder, except that no representation
is made by the Buyer with respect to statements made therein based
on information supplied by the Seller or the Company in writing for
inclusion or incorporation by reference therein.
4.9 Litigation. Except as disclosed in Section 4.9 of the
Buyer Disclosure Schedule or in the Buyer SEC Reports, (a) there
are no existing orders, injunctions, judgments or decrees of any
Governmental Entity which apply to Buyer or any Buyer Subsidiary or
to the assets, properties or operations of the foregoing and (b)
there are no actions, suits, proceedings, at law or in equity,
pending, or to Buyer's Knowledge, threatened or to Buyer's
Knowledge any investigations pending or threatened involving the
Buyer or the Buyer Subsidiaries, or before any Governmental Entity
which in the case of either clause (a) or (b) are reasonably likely
to have a Material Adverse Effect.
4.10 Compliance with Applicable Law. Except as set forth in
Section 4.10 of the Buyer Disclosure Schedule, or in the Buyer SEC
Reports, and except with respect to environmental matters, which
are addressed in Section 4.15 hereof, (a) the Buyer and the Buyer
Subsidiaries are, and the business, operations or financial
condition of the Buyer and the Buyer Subsidiaries has been
conducted, and is, in compliance with all Laws, except where the
failure to be in compliance would not be reasonably likely to have
a Material Adverse Effect, and (b) the Buyer and Buyer Subsidiaries
hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary to conduct their
respective businesses as currently conducted (the "Buyer Permits"),
and such Buyer Permits are in full force and effect, except for
such failures to hold or be in full force and effect which would
not be reasonably likely to have a Material Adverse Effect .
4.11 Taxes. The Buyer and each Buyer Subsidiary has duly
filed all returns of income Taxes (as hereinafter defined) and all
material returns of other Taxes required to be filed by it, and the
Buyer has duly paid, caused to be paid or made adequate provision
for the payment of all Taxes required to be paid in respect of the
periods covered by such returns and has made adequate provision for
payment of all Taxes anticipated to be payable in respect of all
calendar periods since the periods covered by such returns. Except
as set forth in Section 4.11 of the Buyer Disclosure Schedule, the
United States federal and state income tax returns of the Buyer
have been audited by the Internal Revenue Service or relevant state
tax authorities or are closed by the applicable statute of
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<PAGE> 28
limitations for all taxable years through 1986. All deficiencies
and assessments asserted as a result of such audits have been paid,
fully settled or adequately provided for in the financial
statements contained in the Buyer SEC Reports, or are being
contested in good faith by appropriate proceedings. Except as set
forth in Section 4.11 of the Buyer Disclosure Schedule, there are
no outstanding agreements or waivers extending the statutory period
of limitation relating to the payment of Taxes of the Buyer or its
subsidiaries for taxable periods for which the applicable statute
of limitations has not expired.
4.12 ERISA; Employee Benefits. The Buyer hereby represents
and warrants to Seller that as of the date hereof and as of the
Closing Date:
(a)Section 4.12(a) of the Buyer's Disclosure Schedule
identifies each Buyer Employee Plan with an annual cost in excess
of $100,000. The Buyer has furnished or made available to Seller
true and complete copies of such Buyer Employee Plans (and, if
applicable, related trust agreements) and all amendments thereto
and written interpretations thereof together with (i) the most
recent annual report prepared in connection with any such Buyer
Employee Plan (Form 5500 or 5500-C including, if applicable,
Schedules A and B thereto), (ii) the summary plan description
currently in effect for each such Buyer Employee Plan and all
modifications thereof, (iii) for each such Buyer Employee Plan with
respect to which there is no summary plan description in effect, a
written description of such Buyer Employee Plan including all
materials distributed or made available to employees with respect
to such Buyer Employee Plan and (iv) the most recent financial
statements and actuarial reports (if any) for each such Buyer
Employee Plan and its related trust (if any) (collectively, the
Buyer Employee Plan Documents").
(b)Except as set forth in Section 4.12(b) of the Buyer
Disclosure Schedule, no Buyer Employee Plan with an annual cost in
excess of $100,000 is a Title IV Plan or a Multiemployer Plan.
(c)Each Buyer Employee Plan with an annual cost in excess
of $100,000 that is intended to be qualified under Section 401(a)
of the Code has been determined by the Internal Revenue Service to
be so qualified and no event has occurred since the date of such
determination that would adversely affect such qualification; each
trust created under any such Buyer Employee Plan has been
determined by the Internal Revenue Service to be exempt from tax
under Section 501(a) of the Code and no event has occurred since
the date of such determination that would adversely affect such
exemption. The Buyer has furnished to Seller the most recent
determination letter of the Internal Revenue Service relating to
each such Buyer Employee Plan. Each such Buyer Employee Plan has
been maintained in compliance in all material respects with its
terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Code. Neither the Buyer
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<PAGE> 29
nor any Related Person engaged in, nor to Buyer's Knowledge has any
other Person has engaged in, any "prohibited transaction" (as
defined in ERISA and the Code) with respect to any such Buyer
Employee Plan.
(d)Section 4.12(d) of the Buyer's Disclosure Schedule
identifies each Buyer Benefit Arrangement with an annual cost in
excess of $100,000. The Buyer has furnished or made available to
Seller true and complete copies or, if no written document exists,
descriptions of each such Buyer Benefit Arrangement. Each such
Buyer Benefit Arrangement has been maintained in compliance in all
material respects with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations.
(e)Section 4.12(e) of the Buyer Disclosure Schedule
identifies each Buyer International Plan with an annual cost in
excess of $100,000. The Buyer has furnished or made available to
Seller true and complete copies or, if no written document exists,
descriptions of each such Buyer International Plan. Each such
Buyer International Plan has been maintained in compliance in all
material respects with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations (including any special provisions relating to qualified
plans where such Buyer International Plan was intended to so
qualify) and has been maintained in good standing with applicable
regulatory authorities.
(f)Except as set forth on Section 4.12(f) of the Buyer
Disclosure Schedule, there are no actions, suits, arbitrations,
inquiries, investigations or other proceedings (other than routine
claims for benefits) pending or, to the Buyer's Knowledge,
threatened, with respect to any Buyer Employee Plan, Buyer Benefit
Arrangement or Buyer International Plan which would be reasonably
likely to have a Material Adverse Effect.
(g)Except as set forth on Section 4.12(g) of the Buyer
Disclosure Schedule, and except for coverage mandated by Section
4980B of the Code, no Employees or Former Employees and no
beneficiaries or dependents of Employees or Former Employees are or
may become entitled under any Buyer Employee Plan, Buyer Benefit
Arrangement or Buyer International Plan to post-employment welfare
benefits of any kind, including without limitation death or medical
benefits, having an annual cost, in the aggregate, in excess of
$100,000.
4.13 Intellectual Property. "Buyer Intellectual Property"
means all of the Buyer's or any of the Buyer Subsidiaries' domestic
and foreign letters patent, patents, patent applications, patent
licenses, trademark licenses, software licenses and know-how
licenses, trade names, trademarks, copyrights, service marks,
trademark registrations and applications, service mark registra-
tions and applications and copyright registrations and applications
currently being used by the Buyer or any Buyer Subsidiary. Except
as set forth in Section 4.13 of the Buyer Disclosure Schedule or
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<PAGE> 30
Buyer's SEC Reports and except for any claim, infringement, act or
omission that would not be reasonably likely to have a Material
Adverse Effect (a) no claim is pending or, to the knowledge of the
Buyer, threatened to the effect that any of the Buyer Intellectual
Property is invalid or unenforceable or which is otherwise adverse
to the right, title and interest of the Buyer and the Buyer
Subsidiaries in and to the Buyer Intellectual Property; (b) to the
knowledge of the Buyer, no actions or operations of any Person
infringe upon or conflict with the right, title or interest of the
Buyer and the Buyer Subsidiaries in and to the Buyer Intellectual
Property; and (c) to the knowledge of the Buyer, no Buyer
Intellectual Property infringes on the rights owned or held by any
other Person. Except as set forth in Section 4.13 of the Buyer
Disclosure Schedule, no contract, agreement or understanding
between the Buyer or any Buyer Subsidiary and any other party
exists which would impede or prevent the continued use by the Buyer
and the Buyer Subsidiaries of the entire right, title and interest
of the Buyer and the Buyer Subsidiaries in and to the Buyer
Intellectual Property.
4.14 No Defaults. Except as set forth in Section 4.14 of the
Buyer Disclosure Schedule or in the Buyer SEC Reports, to Buyer's
Knowledge, Buyer and the Buyer Subsidiaries are not in default
under, and no condition exists that with notice or lapse of time or
both would constitute a default under, (i) any mortgage, loan
agreement, indenture, evidence of indebtedness or other instrument
evidencing borrowed money, Buyer and Buyer Subsidiaries'
organizational documents, any other material agreement, contract,
lease, license to which Buyer or Buyer Subsidiaries are a party or
by which they or their properties are bound, or (ii) any judgment,
order or injunction of any court, arbitrator or Governmental
Entity, except in the case of clause (i) and (ii) above those that
will not be reasonably likely to have a Material Adverse Effect.
4.15 Environmental Compliance. Except as set forth in Section
4.15 of the Buyer Disclosure Schedule, all operations, properties
and business activities of the Buyer and the Buyer Subsidiaries are
in compliance with all Environmental Laws, and neither the Buyer
nor any of the Buyer Subsidiaries has or is subject to any claim,
notice of investigation or liability based upon any Environmental
Law or arising from the disposal of any Regulated Material except
where such failure to be in compliance or such claim, notice of
investigation or liability would not be reasonably likely to have a
Material Adverse Effect.
4.16 Representations Accurate. To Buyer's Knowledge, the
representations and warranties of the Buyer set forth in this
Agreement and qualified by materiality or by Material Adverse
Effects shall be true and correct (subject to such qualification)
as of the Closing Date (except for representations and warranties
that expressly speak only as of some other time), subject to the
disclosures in the Buyer Disclosure Schedule as supplemented or
amended through the Closing Date and excluding those failures to be
true and correct that do not have a Material Adverse Effect. To
Buyer's Knowledge, the representations and warranties of the Buyer
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<PAGE> 31
set forth in this Agreement and not qualified by materiality or by
Material Adverse Effects shall be true and correct in all material
respects as of the Closing Date (except for representations and
warranties that expressly speak only as of some other time),
subject to the disclosures in the Buyer Disclosure Schedule as
supplemented or amended through the Closing Date and excluding
those failures to be true and correct that do not have a Material
Adverse Effect.
4.17 Purchase for Investment. The Buyer is acquiring the
Company Common Stock for its own account as principal, with no view
to any distribution of any of the Company Common Stock or any
beneficial interest in the Company Common Stock to any third party,
and the Buyer has no agreement, understanding or arrangement to
sell, pledge or otherwise dispose of the Company Common Stock or
any beneficial interest in the Company Common Stock to any other
Person. The Buyer understands and agrees that the Company Common
Stock has not been registered under the Securities Act, or
applicable state securities laws, and neither the Seller nor the
Company has any obligation hereunder to so register and, therefore,
the Company Common Stock may not be sold or otherwise transferred
so as to cause the sale of the shares hereunder by the Seller to be
unlawful or violative of any law or regulation, unless the Company
Common Stock is registered under the Securities Act and any
applicable state securities laws or unless an exemption from such
registration is available.
ARTICLE V
COVENANTS
5.1 Business Covenants of the Seller. Except as expressly
contemplated by this Agreement, the Ancillary Agreements (as
hereinafter defined) and except for the pre-Closing transactions
described in Annex IV hereto between the Seller and its Affiliates,
on the one hand, and the Company and the Company Subsidiaries, on
the other hand, during the period from the date of this Agreement
and continuing until the Closing Date, the Seller will cause the
Company and the Company Subsidiaries to carry on their respective
businesses in the ordinary course, consistent with past practice,
and to use their respective reasonable best efforts to preserve
intact their present business organizations, to keep available the
services of their present officers and key employees and to
preserve their relationships with customers, suppliers, licensors,
licensees, contractors, distributors and others having business
dealings with them. Without limiting the generality of the
foregoing, and except as provided herein, the Seller will not,
without the prior consent of the Buyer, cause or permit the Company
and the Company Subsidiaries to:
(a)(i)declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock, except that the
Company Subsidiaries may declare and pay a dividend to the Company,
(ii) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance of any other securities in
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<PAGE> 32
respect of, in lieu of or in substitution for shares of its capital
stock or (iii) amend the terms of, repurchase, redeem or otherwise
acquire, or permit any subsidiary to repurchase, redeem or
otherwise acquire, any of its securities or any securities of its
subsidiaries, or propose to do any of the foregoing;
(b)authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through the issuance
or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any stock of any class or any
other securities (including indebtedness having the right to vote)
or equity equivalents (including, without limitation, stock
appreciation rights), except pursuant to any Company Benefit Plan,
or amend in any material respect any of the terms of any such
agreements, commitments, stock, securities or equity equivalents
outstanding on the date hereof;
(c)amend or propose to amend its charter or by-laws;
(d)acquire, sell, lease, encumber, transfer or dispose of
any assets other than in the ordinary course of business consistent
with past practice;
(e)make any capital expenditures which in the aggregate
exceed $100,000;
(f)create, incur or assume any long-term debt (including
obligations in respect of capital leases);
(g)except in the ordinary course of business consistent
with past practice, create, incur, assume, maintain or permit to
exist any short-term debt (including obligations in respect of
capital leases) or assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise)
for the obligations of any other Person, except that such debt or
obligations which are set forth on the Seller Disclosure Schedule
may be maintained and permitted to exist;
(h)permit any of its current insurance policies to be
cancelled or terminated or any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse,
replacement policies providing coverage equal to or greater than
coverage remaining under those cancelled, terminated or lapsed are
in full force and effect;
(i)change any of the accounting principles or practices
used by it (except as required by GAAP);
(j)except as required by law, or pursuant to the terms of
any collective bargaining agreement, (i) enter into, adopt, amend
or terminate any Company Benefit Plan or any agreement,
arrangement, plan or policy between itself and one or more of its
directors, executive officers, or other employees, or (ii) increase
in any manner the compensation or fringe benefits of any director,
officer or other employee or pay any benefit not required by any
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<PAGE> 33
plan or arrangement as in effect as of the date hereof, except such
increases as are granted in the ordinary course of business
consistent with past practice (which shall include normal periodic
performance reviews and related compensation and benefit increases
but not any general across-the-board increases);
(k)amend or terminate any material agreements,
commitments or contracts, or enter into other material agreements,
commitments or contracts, except in the ordinary course of business
consistent with past practice and not in excess of current
requirements;
(l)lend any money in excess of $100,000 to any Person
other than an Affiliate or trade creditor;
(m)merge or consolidate with or into any other Person; or
(n)enter into any agreement with any Person for the
purchase of inventory for the Company in excess of $500,000 if such
purchase would cause the Company's inventory to exceed
substantially the amount of inventory required to fill outstanding
contracts with customers of the Company; or
(o)agree to take any of the foregoing actions.
Notwithstanding the provisions of this Section 5.1, nothing in
this Agreement shall be construed or interpreted to prevent the
Seller, the Company and the Company Subsidiaries from making,
accepting or settling intercompany advances to, from or with one
another, or engaging in any other transaction incidental to their
normal cash management procedures, including without limitation,
short-term investments in time deposits, certificates of deposit
and bankers acceptances made in the ordinary course of business.
5.2 Business Covenants of the Buyer. Except as expressly
contemplated by this Agreement, during the period from the date of
this Agreement and continuing until the Closing Date, the Buyer
will, and will cause the Buyer Subsidiaries to, carry on their
respective businesses in the ordinary course, consistent with past
practice, and to use their respective reasonable best efforts to
preserve intact their present business organizations, to keep
available the services of their present officers and key employees
and to preserve their relationships with customers, suppliers,
licensors, licensees, contractors, distributors and others having
business dealings with them. Without limiting the generality of
the foregoing, and except as provided herein, the Buyer will not,
and will cause the Buyer Subsidiaries not, without the prior
consent of the Seller, to:
(a)(i)declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock, (ii) split,
combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
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<PAGE> 34
stock or (iii) amend the terms of, repurchase, redeem or otherwise
acquire, or permit any subsidiary to repurchase, redeem or
otherwise acquire, any of its securities or any securities of its
subsidiaries, or propose to do any of the foregoing;
(b)authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through the issuance
or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any stock of any class or any
other securities (including indebtedness having the right to vote)
or equity equivalents (including, without limitation, stock
appreciation rights) except in accordance with Buyer's Stock Plans,
or amend in any material respect any of the terms of any such
agreements, commitments, stock, securities or equity equivalents
outstanding on the date hereof;
(c)amend or propose to amend its charter or by-laws in
any manner adverse to the interests of the Seller;
(d)make any capital expenditures which in the aggregate
exceed the amounts contemplated by the Buyer's most recent annual
operating budget, unless the Buyer notifies and consults with the
Seller prior to taking any such action;
(e)create, incur or assume any long-term debt (including
obligations in respect of capital leases) in excess of $1,000,000;
(f)except in connection with draws made pursuant to the
Financing Agreement dated March 8, 1993 by and between The CIT
Group/Business Credit, Inc. and the Buyer, among others, or
otherwise in the ordinary course of business consistent with past
practice, create, incur, assume, maintain or permit to exist any
short-term debt (including obligations in respect of capital
leases) in excess of $1,000,000 or assume, guarantee, endorse or
otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person
(except that any such debt or obligations set forth in Section
5.2(f) of the Buyer Disclosure Schedule may be maintained and
permitted to exist);
(g)lend any money in excess of $100,000, unless the Buyer
notifies and consults with the Seller prior to taking any such
action;
(h)except as required by law, (i) enter into, adopt,
amend or terminate any agreement, arrangement, plan or policy
between itself and one or more of its directors or executive
officers, or (ii) increase in any manner the compensation or fringe
benefits of any director or executive officer or pay any benefit to
any director or executive officer not required by any plan or
arrangement as in effect as of the date hereof;
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<PAGE> 35
(i)enter into any material agreements, commitments or
contracts relating to the acquisition or divestiture of any
businesses;
(j)amend or terminate any material agreements,
commitments or contracts, or enter into, other material agreements,
commitments or contracts, except in the ordinary course of business
consistent with past practice and not in excess of current
requirements, unless the Buyer notifies and consults with the
Seller prior to taking any such action;
(k)merge or consolidate with or into any other Person; or
(l)agree to take any of the foregoing actions.
5.3 Current Information. During the period from the date of
this Agreement to the Closing Date, the Buyer will notify the
Seller and the Seller will notify the Buyer of any material change
(or any event which might reasonably be expected to cause a
material change) in the normal course of business or operations of
the Buyer and the Buyer Subsidiaries or of the Company and the
Company Subsidiaries, as the case may be, and of any complaints,
investigations or hearings by any Governmental Entity (or communi-
cations indicating that the same may be contemplated), or the
institution or threat or settlement of significant litigation, in
each case involving the Buyer or the Buyer Subsidiaries or the
Company or the Company Subsidiaries, as the case may be, and to
keep each other fully informed of such events.
5.4 Access to Information.
(a)Between the date of this Agreement and the Closing
Date the Buyer will and will cause the Buyer Subsidiaries to, (i)
give the Seller and the Company and their authorized representa-
tives reasonable access to all books, records, plants, offices,
warehouses and other facilities and properties of the Buyer and the
Buyer Subsidiaries, (ii) permit the Seller and the Company and
their authorized representatives to make such inspections thereof,
during regular business hours, as they may reasonably request, and
(iii) cause their officers to furnish the Seller and the Company
and their authorized representatives with such financial and oper-
ating data and other information with respect to the business,
operations and properties of the Buyer and the Buyer Subsidiaries
as the Seller and the Company may from time to time reasonably
request; provided, however, that any such investigation shall be
conducted in such a manner as not to interfere unreasonably with
the operation of the business of the Buyer and the Buyer
Subsidiaries.
(b)Between the date of this Agreement and the Closing
Date the Seller will and will cause the Company and the Company
Subsidiaries to, (i) give the Buyer and the Buyer Subsidiaries and
their authorized representatives reasonable access to all books,
records, plants, offices, warehouses and other facilities and
properties of the Company, the Company Subsidiaries and the
Business, and to reasonably permit the Buyer to make copies of such
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<PAGE> 36
books and records, (ii) permit the Buyer and the Buyer Subsidiaries
and their authorized representatives to make such inspections
thereof, during regular business hours, as they may reasonably
request, and (iii) cause its officers to furnish the Buyer and the
Buyer Subsidiaries and their authorized representatives with the
monthly financial reporting package of the Company that is prepared
for the Seller in its ordinary practice and with such other
financial and operating data and other information with respect to
the business, operations and properties of the Company, the Company
Subsidiaries and the Business as the Buyer and the Buyer Sub-
sidiaries may from time to time reasonably request; provided,
however, that any such investigation shall be conducted in such
manner as not to interfere unreasonably with the operation of the
business of the Seller, the Company and the Company Subsidiaries.
(c)Notwithstanding (a) and (b) above, the Buyer, the
Buyer Subsidiaries, the Seller, the Seller Subsidiaries, the
Company and the Company Subsidiaries shall not be obligated to
furnish information if, in the opinion of counsel, such furnishing
of information would be reasonably likely to violate the law.
(d)Between the date of this Agreement and the Closing
Date (or, if this Agreement terminates pursuant to Section 7.1 or
otherwise, for three years from the date hereof), the Buyer will
hold and will cause the Buyer Subsidiaries and their respective
officers, directors, employees, representatives, consultants and
advisors to hold and the Seller will hold and will cause the Seller
Subsidiaries, the Company and the Company Subsidiaries and their
respective officers, directors, employees, representatives, consul-
tants and advisors to hold in strict confidence in accordance with
the terms of the Confidentiality Agreement, dated January 29, 1992,
between the Buyer and the Seller (the "Confidentiality Agreement"),
all documents and information furnished to each other and their
representatives, consultants or advisors in connection with the
transactions contemplated by this Agreement; provided, however,
that the Buyer shall not be required hereunder to hold in strict
confidence such documents and information that relate solely to the
operation of the Company, the Company Subsidiaries or the Business.
The Confidentiality Agreement will terminate on the Closing Date.
5.5 Reasonable Best Efforts. Subject to the terms and condi-
tions of this Agreement, each of the parties hereto agrees to use
its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement. Without limiting the foregoing, the Buyer agrees to use
its reasonable best efforts to, as promptly as practicable, (a)
prepare and file with the SEC the Proxy Statement, respond to the
comments (if any) of the staff of the SEC with respect thereto, and
mail to the shareholders of the Buyer the definitive Proxy
Statement, which Proxy Statement shall contain the recommendation
of the Board of Directors of the Buyer to the Buyer's shareholders
regarding the transactions contemplated by this Agreement, and (b)
take such actions as may be required to cause, prior to the Closing
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<PAGE> 37
Date, the Equity Consideration to be received by the Seller pursu-
ant to this Agreement to be eligible for quotation on the NASDAQ
National Market System (subject to official notice of issuance).
The Seller shall use its reasonable best efforts (i) to provide to
the Buyer all information about the Seller, the Seller
Subsidiaries, the Company or the Company Subsidiaries (including
without limitation the Company Financial Statements and any other
financial statements of the Company and the Company Subsidiaries)
required to be included or incorporated by reference in the Proxy
Statement and (ii) otherwise to cooperate with the Buyer in taking
the actions described in the preceding sentence.
5.6 Consents; Filings.
(a)Each of the parties hereto will use its reasonable
best efforts to obtain consents of all Persons necessary for the
consummation of the transactions contemplated by this Agreement.
(b)Each of the parties hereto will use its reasonable
best efforts to file expeditiously the appropriate German pre-
merger filings. The Buyer and the Seller will make all such other
filings, notifications and requests for consent, approval or
permission that may be required by statute, regulation or judicial
decree in connection with the transactions contemplated by this
Agreement and will cooperate in providing each other or their
respective outside counsel any information, including reasonable
access to knowledgeable individuals, necessary in connection
therewith. The Buyer and the Seller shall, upon the request of any
Governmental Entity, supply such agency with any additional re-
quested information as expeditiously as is reasonably possible, and
shall use their reasonable best efforts to cause the satisfaction
or termination of the applicable waiting period under German pre-
merger notification laws. The Buyer and the Seller shall use their
reasonable best efforts to resolve as promptly as practicable any
concern on the part of any Governmental Entity regarding the
legality of the transactions contemplated hereby, but shall not be
required to divest any assets, significantly change the conduct of
the business currently conducted by the Buyer, the Seller or the
Company or otherwise materially restrict the future business
activities of the Buyer, the Seller or the Company.
5.7 Shareholder Meeting. The Buyer shall duly call, give
notice of, convene and hold a meeting of its shareholders as
promptly as practicable for the purpose of adopting and approving
this Agreement and the transactions contemplated hereby (including,
without limitation, adopting and approving (i) an amendment to the
Buyer's Articles of Organization providing that the number of
authorized shares of Buyer Common Stock be increased to 70,000,000
(the "Authorized Shares Amendment"), (ii) the issuance of the
Equity Consideration, and (iii) the Fair Price Charter Amendment)
and for such other purposes as may be necessary or desirable to
effectuate the transactions contemplated by this Agreement. The
Buyer shall use its reasonable best efforts to obtain the agreement
of its Affiliates to vote all shares of Buyer Common Stock
beneficially owned by each such Affiliate in favor of the matters
presented to the Buyer's shareholders in connection with the
transactions contemplated by this Agreement.
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<PAGE> 38
5.8 Amendment to Articles of Organization and By-Laws. As
promptly as practicable following adoption of the Authorized Shares
Amendment and the Fair Price Charter Amendment by the requisite
affirmative vote of the Buyer's shareholders but prior to Closing,
the Buyer shall file with the Secretary of the Commonwealth of
Massachusetts articles of amendment, duly signed in accordance with
the Massachusetts Business Corporation Law, setting forth the
Authorized Shares Amendment, the Fair Price Charter Amendment, and
the due adoption thereof. Prior to Closing, the Board of Directors
shall adopt and approve the amendment to the Buyer's By-laws in the
form attached hereto as Annex VI (the "Control Share Acquisitions
Amendment").
5.9 Rights Agreement. As promptly as practicable following
the approval and adoption of the Amended and Restated Rights
Agreement in the form attached hereto as Annex VII (the "Rights
Agreement") by the Buyer's Board of Directors but prior to the
Closing, the Buyer shall execute and deliver the Rights Agreement.
5.10 Brokers or Finders. Each of the Buyer and the Seller
represents, as to itself, its subsidiaries and its Affiliates, that
no agent, broker, investment banker, financial advisor or other
firm or Person is or will be entitled to any broker's or finder's
fee or any other commission or similar fee in connection with any
of the transactions contemplated by this Agreement, except
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and
Shearson Lehman Brothers, Inc. ("Shearson"), whose fees and ex-
penses, if any, will be paid by the Buyer in accordance with the
Buyer's agreement with DLJ or Shearson, and Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") and The First Boston
Corporation ("First Boston"), whose fees and expenses, if any, will
be paid by the Seller in accordance with the Seller's agreement
with Merrill Lynch or First Boston; and the Buyer and the Seller
each agree to indemnify and hold the other harmless from and
against any and all claims, liabilities or obligations with respect
to any other fees, commissions or expenses asserted by any Person
on the basis of any act or statement alleged to have been made by
or on behalf of such party.
5.11 Fees and Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, all costs and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses; provided, however, that in no event shall
such expenses be paid by the Company or the Company Subsidiaries.
5.12 Employee Benefits.
(a)The following terms, as used in this Agreement, have
the following meanings:
"Buyer Benefit Arrangement" means any employment,
severance or similar contract, arrangement or policy, or any plan
or arrangement (whether or not written) providing for severance
benefits, insurance coverage (including any self-insured arrange-
ments), workers' compensation, disability benefits, supplemental
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<PAGE> 39
unemployment benefits, vacation benefits, retirement benefits,
deferred compensation, profit-sharing, bonuses, stock options,
stock appreciation rights, fringe benefits, perquisites or other
forms of compensation or post-retirement insurance, compensation
benefits that (i) is not a Buyer Employee Plan, (ii) is entered
into or maintained, as the case may be, by the Buyer or any of its
Affiliates, and (iii) covers any individual employed or formerly
employed, as the case may be, by the Buyer or a subsidiary or
Affiliate of the Buyer.
"Buyer Employee Plan" means any "employee benefit
plan", as defined in Section 3(3) of ERISA, that (i) is subject to
any provision of ERISA, (ii) is maintained, administered or con-
tributed to by the Buyer or any of its Affiliates, and (iii) covers
any individual employed or formerly employed by the Buyer or a
subsidiary or Affiliate of the Buyer.
"Buyer International Plan" means any employment,
severance or similar contract, arrangement or policy (exclusive of
any such contract which is terminable within thirty days without
liability of the Buyer or any of its Affiliates), or any plan or
arrangement providing for severance, insurance coverage (including
any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits,
pension or retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights,
fringe benefits, perquisites or other forms of compensation or
post-retirement insurance, compensation or benefits that (i) is not
a Buyer Employee Plan or a Buyer Benefit Arrangement, (ii) is
maintained or contributed to by the Buyer or any of its Affiliates,
and (iii) covers any individual employed or formerly employed or by
the Buyer or a subsidiary or Affiliate of the Buyer outside the
United States.
"COBRA" means Part 6 of Title I of ERISA and Section
4980B of the Code.
"Company Domestic Retirement and Savings Plans"
shall mean the Seller Employee Plans which are included in the
definition of "employee pension benefit plan" as defined in Section
3(2) of ERISA.
"Controlled Group Liability" means any and all li-
abilities under (i) Title IV of ERISA, (ii) section 302 of ERISA,
(iii) sections 412 and 4971 of the Code, (iv) the continuation
coverage requirements of section 601 et seq. of ERISA and section
4980B of the Code and (v) corresponding or similar provisions of
foreign laws or regulations.
"Employee" means any individual who, on the Closing
Date, is employed in the Business in any active or inactive status
and whose current employment in the Business has not been
terminated and, if applicable, any beneficiary thereof.
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<PAGE> 40
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute
thereto, and the rules and regulations promulgated thereunder.
"Former Employee" means any individual employed in
the Business by the Seller or any of its Affiliates and whose
employment has been terminated prior to the Closing Date (and, if
applicable, any beneficiary thereof), excluding any individuals
subsequently employed by the Seller or any of its Affiliates
outside of the Business.
"Multiemployer Plan" means each Employee Plan that
is a multiemployer plan, as defined in Section 3(37) of ERISA.
"Related Person" of any Person means any other
Person which, together with such Person, would or at any time has
been treated as a single employer with either the Buyer or the
Seller (as appropriate), the Company or any Affiliate under Section
414 of the Code.
"Seller Benefit Arrangement" means any employment,
severance or similar contract, arrangement or policy, or any plan
or arrangement (whether or not written) providing for severance
benefits, insurance coverage (including any self-insured arrange-
ments), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits,
deferred compensation, profit-sharing, bonuses, stock options,
stock appreciation rights, fringe benefits, perquisites or other
forms of compensation or post-retirement insurance, compensation
benefits that (i) is not a Seller Employee Plan, (ii) is entered
into or maintained, as the case may be, by the Seller or any of its
Affiliates, and (iii) covers any individual employed or formerly
employed, as the case may be, in the Business in the United States.
"Seller Employee Plan" means any "employee benefit
plan", as defined in Section 3(3) of ERISA, that (i) is subject to
any provision of ERISA, (ii) is maintained, administered or con-
tributed to by the Seller or any of its Affiliates, and (iii)
covers any individual employed or formerly employed in the
Business.
"Seller Hourly 401(k) Plan" shall mean the Cameron
Iron Works, USA Inc. Savings-Investment Plan for Hourly Employees.
"Seller International Plan" means any employment,
severance or similar contract, arrangement or policy (exclusive of
any such contract which is terminable within thirty days without
liability of the Seller or any of its Affiliates), or any plan or
arrangement providing for severance, insurance coverage (including
any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits,
pension or retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights,
fringe benefits, perquisites or other forms of compensation or
post-retirement insurance, compensation or benefits that (i) is not
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<PAGE> 41
a Seller Employee Plan or a Seller Benefit Arrangement, (ii) is
maintained or contributed to by the Seller or any of its Affiliates
and (iii) covers any individual employed or formerly employed
outside the United States in the Business.
"Seller Salaried 401(k) Plan" shall mean the Cooper
Industries, Inc. Savings and Stock Ownership Plan.
"Seller Self-Insured LTD Benefits" shall mean the
long-term disability benefits which are self-insured and payable
through the Cameron Iron Works, USA Inc. Employee Benefit Trust and
administered by Thomas L. Jacobs to certain Employees or Former
Employees who became eligible for long-term disability benefits on
or before August 31, 1990 under the terms of the Company's long-
term disability benefit plans in effect on or before August 31,
1990.
"Seller U.K. Pension Plan" shall mean the Cameron
Iron Works Retirement Benefits Scheme (1974).
"Title IV Plan" means an Employee Plan, other than
any Multiemployer Plan, subject to Title IV of ERISA.
(b) As of the Closing Date each Employee will continue
as an employee of the Company in the same status and at the same
salary or wage and benefit levels as provided to such Employee on
the Closing Date by the Company; provided that, nothing herein
shall prevent the Buyer from altering such salary, wage and benefit
levels or terminating the employment of any Employee after the
Closing Date.
(c) Prior to the Closing Date, the Buyer shall establish
a plan or plans which are substantially similar in all material
respects to the Company Domestic Retirement and Savings Plans. The
Buyer reserves the right to amend or terminate such plans at any
time after the Closing Date. Such plan or plans shall provide
credit for the service earned in each of the Company Domestic
Retirement and Savings Plans for purposes of eligibility (including
for early retirement subsidies and disability benefits) and
vesting. Such plan or plans shall also provide credit for benefit
accrual purposes from the Closing Date forward. Benefit accruals
shall cease under each of the Company Domestic Retirement and
Savings Plans as of the Closing Date for all Employees, except for
the Seller Salaried 401(k) Plan in which eligible Employees will
continue to contribute and accrue company matching contributions in
accordance with the terms of such plan through May 31, 1994 and
except for the Seller Hourly 401(k) Plan in which eligible
Employees will continue to contribute and accrue company matching
contributions in accordance with the terms of such plan through May
29, 1994, such employee and matching contributions in each case to
be made by Seller. Buyer shall reimburse Seller in an amount equal
to 31.25% of the company matching contribution accrued by eligible
Employees in the Seller Salaried 401(k) Plan for the period from
May 16, 1994 through May 31, 1994 and for 42.86% of the company
matching contribution accrued by eligible Employees in the Seller
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<PAGE> 42
Hourly 401(k) Plan for the period from May 23, 1994 through May 29,
1994. Buyer will transfer to Seller the employee 401(k) plan
contributions for the period from May 16, 1994 through May 31, 1994
for eligible Employees in the Seller Salaried 401(k) Plan and for
the period May 23, 1994 through May 29, 1994 for eligible Employees
in the Seller Hourly 401(k) Plan. Service on and after the Closing
Date with the Buyer or any Affiliate, subsidiary or successor of
the Buyer shall be credited under each Company Domestic Retirement
and Savings Plan which is not a Section 401(k) plan solely for the
purposes of eligibility (including for early retirement subsidies
and disability benefits) and vesting. Employees shall not be
considered terminated or retired by the Seller under the Company
Domestic Retirement and Savings Plans until they are no longer
being credited with service for purposes of eligibility (including
for early retirement subsidies and disability benefits) and
vesting. The Seller shall take all necessary steps to remove the
Company as sponsoring employer or a participating employer of the
Company Domestic Retirement and Savings Plans as of the Closing
Date, except for the Seller Salaried 401(k) Plan in which case the
Company shall be removed as a sponsoring or participating employer
as of May 31, 1994 and except for the Seller Hourly 401(k) Plan in
which case the Company shall be removed as a sponsoring or
participating employer as of May 29, 1994. The Seller shall retain
all assets and liabilities associated with each Company Domestic
Retirement and Savings Plan. Notwithstanding the foregoing, as
soon as practicable after the Closing Date, Seller shall cause the
trustee of Seller Salaried 401(k) Plan and the trustee of the
Seller Hourly 401(k) Plan to segregate or otherwise identify the
assets of each such plan and related trust and make any and all
filings and submissions to the appropriate governmental agencies
arising in connection with the transfer of assets as described
below. The manner in which the account balances of Employees under
each such plan are invested shall not be affected by such
segregation or identification of assets. As soon as practicable
after the Closing Date, Buyer shall establish or designate profit
sharing plans with a salary reduction 401(k) feature for the
benefit of Employees (such Buyer plans, the "Successor Individual
Account Plans"), shall take all necessary action, if any, to
qualify the Successor Individual Account Plans under the applicable
provisions of the Code and shall make any and all filings and
submissions to the appropriate governmental agencies required to be
made by it in connection with the transfer of assets described
below. The successor Individual Account Plans shall include loan
and in-service withdrawal provisions substantially similar to those
of the Seller Salaried 401(k) Plan and the Seller Hourly 401(k)
Plan, respectively. As soon as practicable after the Closing Date,
but not earlier than (i) thirty (30) days after the filing of all
necessary governmental forms and (ii) the receipt of a favorable
determination letter with respect to the qualification of each of
the Successor Individual Account Plans or the receipt of an opinion
of counsel acceptable to the Buyer and the Seller regarding such
qualified status, Seller shall cause the transfer of the entire
account balance (which account balances will have been credited
with any employer contribution for the current Plan year to which
the applicable Employee is entitled under the terms of this
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<PAGE> 43
Agreement) to the appropriate trustee as designated by Buyer under
the trust agreement forming a part of the Successor Individual
Account Plans. The assets to be transferred shall be in the form
of cash, common stock of the Seller or preferred stock of the
Seller, as determined by Seller. The transfer of assets to the
Successor Individual Account Plans described herein shall each
satisfy the requirements of the Code. In consideration for the
transfer of assets described herein, Buyer shall, effective as of
the date of transfer described herein, assume all of the
obligations of Seller and any of its Affiliates in respect of the
transferred account balances for the Employees under both the
Seller Salaried 401(k) Plan and the Seller Hourly 401(k) Plan
(exclusive of any portion of such account balances which are paid
or otherwise withdrawn prior to the date of transfer described
herein). Neither Buyer nor any of its Affiliates shall assume any
other obligations or liabilities arising under or attributable to
the Seller Salaried 401(k) Plan or the Seller Hourly 401(k) Plan.
The Buyer, the Company and their Affiliates shall indemnify and
hold the Seller and its Affiliates harmless against all obligations
and liabilities arising out of or relating to the maintenance of
any plan it establishes pursuant to the provisions of this Section
5.12(c). Notwithstanding any other provision contained in this
Agreement to the contrary, in the event the Buyer, the Company, or
their Affiliates modify or terminate any plan it establishes
pursuant to the provisions of this Section 5.12(c), the Buyer, the
Company and their Affiliates indemnify and shall hold the Seller
and its Affiliates harmless against any increase in the obligations
or liabilities of the Seller and its Affiliates that arise out of
or relating to such modification or termination.
(d) The Buyer shall procure (or shall procure that the
U.K. Sub procures) that:
(i) on or before the Closing Date it establishes a
retirement benefit scheme which is approved or is capable of exempt
approval under Chapter I of Part XIV of the Income and Corporation
Taxes Act 1988 (the "New Plan") for the benefit of the employees of
the U.K. Sub and that such employees are offered membership of the
New Plan with effect from the Closing Date;
(ii) the benefits to be provided by the New Plan for
the employees of the U.K. Sub shall be substantially similar in all
material respects to those provided under the Seller U.K. Pension
Plan (details of which have been disclosed) as of the Closing Date
(for purposes of this paragraph 5.12(d)(ii), "substantially
similar" shall mean that any differences between the New Plan and
the Seller U.K. Pension Plan shall not constitute a change to any
Employee's contract of employment); and
(iii) for the purpose of vesting benefits in the
New Plan in respect of those employees of the U.K. Sub who have not
at the Closing Date qualified for preserved benefits under the
Seller U.K. Pension Plan, the New Plan will recognize the period of
pensionable service such employees have accrued under the Seller
U.K. Pension Plan to the intent that they shall qualify for
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<PAGE> 44
preserved benefits on the date that they would have done had their
pensionable service under the Seller U.K. Pension Plan not ceased
as a consequence of this Agreement. In the case of those employees
of the U.K. Sub who already qualify for preserved benefits under
the Seller U.K. Pension Plan the New Plan shall contain provisions
which immediately vest the accrual of their benefits after the
Closing Date in the New Plan. Buyer reserves the right to modify
or terminate the New Plan at any time or from time to time after
Closing Date.
(e) The Seller shall procure that in respect of those
employees of the U.K. Sub who have not at the Closing Date
qualified for preserved benefits under the Seller U.K. Pension Plan
such persons will each be offered the opportunity of electing for a
deferred vested benefit in accordance with the provisions of Rules
12(b) of the Consolidating Trust Deed and rules of the Seller U.K.
Pension Plan dated 13 December 1993 (therein described
"Discretionary award of Short Service Benefit in relation to Non
Qualifying Members") as an alternative to receiving a refund of
member contributions to which he or she may be entitled under the
terms of the Seller U.K. Pension Plan as at the Closing Date.
(f) Except for liabilities or obligations arising under
the Company Domestic Retirement and Savings Plans (but not
including liabilities or obligations transferred to plans
designated by Buyer in accordance with paragraph 5.12(c)), the
Seller Self-Insured LTD Benefits, the Seller U.K. Pension Plan, the
1993 ESPP and any Seller Benefit Arrangement providing for the
issuance of Seller Stock ("Seller Stock Plans") as of the Closing
Date the Company shall retain, or the Buyer shall assume, all
liabilities or other obligations associated with the Seller
Employee Plans, the Seller Benefit Arrangements and the Seller
International Plan for or attributable to any Employee or Former
Employee.
(g) Except for liabilities or obligations arising under
the Company Domestic Retirement and Savings Plans, the Seller U.K.
Pension Plan, the Seller Self-Insured LTD Benefits, the 1993 ESPP
and the Seller Stock Plans (i) the Buyer, the Company and their Af-
filiates shall indemnify and hold the Seller and its Affiliates
harmless against liabilities or obligations arising under the
Seller Employee Plans, Seller Benefit Arrangements and Seller
International Plans in respect of any Employee or Former Employee
(including any beneficiary or dependent thereof) and all
obligations and liabilities arising out of or relating to the
employment of any Employee or Former Employee by the Company before
or after the Closing other than obligations and liabilities
expressly retained by the Seller pursuant to this Section 5.12 and
(ii) without limiting the generality of the foregoing, the Company,
the Buyer and their Affiliates shall assume, be solely responsible
for, and shall hold the Seller and its Affiliates harmless against,
any claims for workers compensation, medical benefits, life
insurance, or other insured or uninsured welfare benefits of any
kind incurred by any Employee or Former Employee or beneficiary
thereof. The Company shall, as of the Closing Date, assume and
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<PAGE> 45
retain, and hold the Seller and its Affiliates harmless against,
all obligations and liabilities of the Company and its Affiliates
to provide post-retirement health benefits to any Employee or
Former Employee. Seller hereby indemnifies Buyer and its
Affiliates against and agrees to hold each of them harmless from
any and all damage, loss, liability and expense (including, without
limitation, reasonable expenses of investigation and reasonable
attorney fees and expenses) incurred or suffered by Buyer or any of
its Affiliates (including the Company) as a result of, arising out
of or relating to (I) the imposition of any Controlled Group
Liability with respect to any employee benefit plan (as that term
is defined in Section 3(3) of ERISA (whether or not such plan is
subject to ERISA)) or arrangement currently or previously
maintained or contributed to by Seller, the Company or any ERISA
Affiliate of Seller or the Company at any time or to which Seller
or any Related Person had or has an obligation to contribute at any
time, other than any Seller Employee Plan, Seller Benefit
Arrangement or Seller International Plan to the extent maintained
for the benefit of Employees or Former Employees of the Company and
its Subsidiaries or (II) the Company Domestic Retirement and
Savings Plans and the Seller U.K. Pension Plan.
(h) The Company shall be responsible for continuation
coverage requirements under Section 4980B of the Code for
"qualifying events" (within the meaning of 4980B(f)(3) of the Code)
with respect to any Employee or Former Employee.
(i) After the Closing, the Buyer shall cause the Company
and the Company Subsidiaries to comply with their collective
bargaining obligations.
(j) Certain Employees as of July 1, 1993 (including
certain Former Employees who became so since July 1, 1993) are
participating in the 1993 Offering to the Seller's employees ("ESPP
Participants") under the Seller's Employee Stock Purchase Plan (the
"1993 ESPP"), a payroll deduction stock purchase plan under which
options were granted on July 1, 1993, to purchase shares of Seller
common stock on September 8, 1995, and the related payroll
administration is being conducted by the Company in accordance with
the Seller's 1993 ESPP standard administration manual. On or
before the Closing Date, the Seller will cause the 1993 ESPP to be
continued subsequent to the Closing Date for all ESPP Participants
who become employed by the Buyer on the Closing Date and the Seller
undertakes to cause shares to be issued, and to pay interest on
payroll deposits from and after the Closing Date, all in accordance
with the 1993 ESPP, to the ESPP Participants who continue in the
1993 ESPP. The Buyer agrees to continue, or cause to be continued,
the payroll administration related to such continued participation
in the 1993 ESPP, promptly forwarding all cash withholdings to the
Seller with appropriate records. The Seller has the right to
refrain from issuing any of the shares under the 1993 ESPP to any
then-participating ESPP Participant until the Buyer has remitted to
the Seller the amount of any payroll deduction due on behalf of
such participant. Except as provided in this Section 5.12(j), the
Buyer shall not have any obligation to continue the 1993 ESPP after
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<PAGE> 46
the Closing Date and shall have no obligation to offer any other
stock purchase plan to Employees. Except for any damage, loss,
liability or expense (including, without limitation, reasonable
expenses of investigation and reasonable attorney fees and
expenses) which is the result of, arises from or relates to the
gross negligence or willful misconduct of Buyer or the Company, or
their affiliates and subsidiaries, with respect to their compliance
with the provisions of this Section 5.12(j), Seller hereby
indemnifies Buyer and its Affiliates against and agrees to hold
each of them harmless from any and all damage, loss, liability and
expense (including, without limitation, reasonable expenses of
investigation and reasonable attorney fees and expenses) incurred
or suffered by Buyer or any of its Affiliates (including the
Company) as a result of, arising out of or relating to the 1993
ESPP and the Seller Stock Plans.
(k) As of the Closing Date, Seller shall retain all
assets of the Cameron Iron Works, USA Inc. Employee Benefit Trust
and all liabilities associated with the Seller Self-Insured LTD
Benefits. Seller shall be solely responsible for the funding and
provision of the Seller Self-Insured LTD Benefits. Buyer and the
Company shall have no right or entitlement to any of the assets of
the Cameron Iron Works, USA Inc. Employee Benefit Trust. Buyer,
Seller and the Company hereby agree to take any and all necessary
steps to assign all assets and liabilities associated with the
Seller Self-Insured LTD Benefits to Seller.
5.13 Public Announcements. Neither the Buyer nor the Seller
will issue any press release or otherwise make any public statement
with respect to the transactions contemplated hereby without the
other party's prior consent, except as required by law or stock
exchange or NASDAQ rules or regulations.
5.14 Use of the Company Name.
(a) Except as provided in this Section 5.14, no interest
in or right to use the "Cameron" name is being conveyed pursuant to
this Agreement, and following the Closing Date the Buyer, the
Company and the Company Subsidiaries shall not use the "Cameron"
name in any manner in connection with their businesses or
operations, provided, however, the Buyer, the Company and the
Company Subsidiaries shall have the right (i) to use the name
"Cameron Forged Products" in conjunction with the name "Wyman-
Gordon Company" for three years following the Closing Date, and
(ii) to dispose of or consume existing inventory, stationery,
promotional or advertising literature, labels, office forms and
packaging materials (other than that which relates to oil field
equipment forgings) which may be labeled with the "Cameron" name
for up to six months following the Closing Date.
(b) Immediately following the Closing, the Buyer shall
cause the Company to file with the office of the Secretary of State
of the State of Delaware all documents necessary to change the name
of the Company to a name reasonably satisfactory to the Seller.
Pending the effectiveness of the Company's name change, the Buyer
shall file all necessary documentation with the appropriate
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<PAGE> 47
Governmental Entities to evidence its doing business as an entity
using a name other than "Cameron Forged Products Company". The
Buyer shall take the equivalent action with respect to such name in
any other jurisdiction where it has been or is used.
5.15 Company Books and Records. For a period of eight years
after the Closing Date, the Buyer shall, or shall cause the
Company, the Company Subsidiaries and their successors and assigns,
to (i) retain and, as reasonably requested, permit the Seller and
its employees or agents to inspect and copy all books and records
of the Company or any Company Subsidiary which relate to the period
prior to the Closing Date and (ii) cooperate in arranging
discussions with (and the calling as witnesses) officers,
directors, employees and agents of the Company, the Company
Subsidiaries and their successors and assigns, on matters which
relate to the Company or the Company Subsidiaries with respect to
the period prior to the Closing Date.
5.16 Disclosure Supplements. Prior to the Closing Date, the
Buyer will, by giving written notice to the Seller, supplement or
amend the Buyer Disclosure Schedule with respect to any matters
hereinafter arising which, if existing or occurring at or prior to
the date of this Agreement, would have been required to be set
forth or described in the Buyer Disclosure Schedule or which is
necessary to correct any information in the Buyer Disclosure
Schedule or in any representation and warranty of the Buyer which
has been rendered inaccurate thereby. Prior to the Closing Date,
the Seller will, by giving written notice to the Buyer, supplement
or amend the Seller Disclosure Schedule with respect to any matters
hereafter arising which, if existing or occurring at or prior to
the date of this Agreement, would have been required to be set
forth or described in the Seller Disclosure Schedule or which is
necessary to correct any information in the Seller Disclosure
Schedule or in any representation and warranty of the Seller which
has been rendered inaccurate thereby. For purposes of determining
the accuracy of the representations and warranties of the Seller
contained in Article III and the accuracy of the representations
and warranties of the Buyer contained in Article IV in order to
determine the fulfillment of the conditions set forth in Sections
6.2 and 6.3, respectively, the Buyer Disclosure Schedule and the
Seller Disclosure Schedule shall be deemed to include only that
information contained therein on the date of this Agreement and
shall be deemed to exclude any information contained in any subse-
quent supplement or amendment thereto.
5.17 Ancillary Agreements.
(a) As promptly as practicable after the date hereof,
the Buyer and the Seller will negotiate in good faith the terms of
the following agreements (collectively the "Ancillary Agreements"):
(i) a lease agreement pursuant to which the Buyer
or the U.K. Sub will lease space and certain oil tool equipment to
the Seller or an Affiliate of the Seller at the Livingston,
Scotland facility, in the event the Buyer deems such lease
agreement to be necessary or appropriate;
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<PAGE> 48
(ii) a lease agreement pursuant to which the Seller
or a Seller Subsidiary will lease space and certain equipment to
the Company or an Affiliate of the Buyer at the Katy Road Site;
(iii) a supply agreement pursuant to which the
Buyer will cause the Company to supply forgings to the Seller or an
Affiliate of the Seller;
(iv) a license agreement pursuant to which the Seller
will grant to the Company a non-exclusive license to make and sell
certain products covered by the Seller's hot isostatic pressing
patents;
(v) a license agreement pursuant to which the Seller
will grant to the Company a non-exclusive license to make and sell
to RMI Titanium Company certain forgings to be used in a titanium
riser covered by the Seller's patent therefor;
(vi) a computer services agreement pursuant to which
the Seller will permit the Company to continue to use the Seller's
Cooper Oil Tool computer; and
(vii) an agreement providing for the Seller to
factor the Company's receivables (the "Factoring Agreement").
(b) The Ancillary Agreements will include the terms set
forth in the term sheets appearing as Annex VIII hereto, and such
other terms to which the parties may agree in writing.
5.18 WARN Act. The Buyer agrees to indemnify, defend and hold
harmless the Seller, its present or former officers and directors,
agents and Affiliates, against any claims, damages, wages, fines,
penalties and expenses, including attorneys' fees, arising from the
failure to comply with the Worker Adjustment and Retraining
Notification Act (the "WARN Act") arising from or relating to a
"plant closing" or "mass layoff" (as those terms are defined in the
WARN Act) by the Company occurring on or after the Closing Date.
5.19 Taxes.
(a) With respect to Seller's sale of the Company Common
Stock hereunder, if Seller gives Buyer written notice within 30
days after the Closing Date ("Seller's Notice"), Seller and Buyer
shall jointly make each available Section 338(h)(10) Election in
accordance with applicable Tax Laws and as set forth herein,
provided that Seller does not own, and is not deemed to own, and as
a result of the transactions contemplated by this Agreement will
not own and will not be deemed to own, fifty percent (50%) or more
of Buyer's issued and outstanding common stock. If the Section
338(h)(10) Election is to be made, Seller and Buyer will supply in
advance to one another copies of all correspondence, filings or
communications (or memoranda setting forth the substance thereof)
to be sent or made by Buyer or Seller or their respective
representatives to or with the Internal Revenue Service relating to
such election. Buyer and Seller agree to report the transfers
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<PAGE> 49
under this Agreement consistent with such Section 338(h)(10) Elec-
tion, and shall take no position or action contrary thereto (unless
required to do so by applicable Tax Laws or an administrative
settlement with Tax Authorities), including but not limited to any
dissolution, merger, consolidation, or liquidation of the Company
into the Buyer for a period of two years following the Closing Date
without the prior written consent of the Seller, which consent may
be withheld in its sole discretion. If the Section 338(h)(10)
Election is to be made, Seller agrees to cause the Company and the
Company Subsidiaries to recognize the gain, and to pay all tax on
such gain, with respect to any intangible asset deemed sold
pursuant to such election to the extent necessary to enable Buyer,
the Company and the Company Subsidiaries to amortize such
intangible asset pursuant to the provisions of Section 197 of the
Code.
(b) Buyer and Seller shall be jointly responsible for the
preparation and filing of all Section 338 Forms in accordance with
applicable Tax Laws and the terms of this Agreement, and each party
shall deliver to the other party such Forms and related documents
at least 30 days prior to the date such Section 338 Forms as are
required to be filed under applicable Tax Laws.
(c) The parties hereby agree that, for purposes of the
allocation of the Aggregate Deemed Sale Price ("ADSP") (as defined
under applicable Treasury Regulations), the fair market value of
the machinery and equipment, dies, land and buildings of the U.K.
Sub is $24,415,000, and the fair market value of the remaining
assets of the U.K. Sub is at net book value.
(d) Seller shall be liable for, shall pay and shall
indemnify and hold Buyer and the Company and the Company
Subsidiaries harmless against all Taxes of the Company and the
Company Subsidiaries for any taxable year or taxable period ending
on or before the Closing Date, including, without limitation, any
Taxes resulting from the making of the Section 338(h)(10) Election
and any liability for Taxes pursuant to Treasury Regulation Section
1.1502-6. All liabilities and obligations between the Company and
the Company Subsidiaries on the one hand, and the Seller and any of
Seller's Affiliates on the other hand, under any tax allocation
agreement or arrangement in effect on or prior to the Closing Date
(other than this Agreement or as set forth herein) shall cease to
exist as of the date hereof.
(e) Buyer shall be liable for, shall pay and shall
indemnify and hold Seller harmless against, any and all Taxes of
the Company and the Company Subsidiaries for any taxable year or
taxable period commencing after the Closing Date.
(f) Any Taxes for a taxable period beginning before the
Closing Date and ending after the Closing Date (the "Straddle
Period") with respect to the Company or any Company Subsidiary
shall be apportioned between Seller and Buyer based on the actual
operations of the Company or the Company Subsidiary, as the case
may be, during the portion of such period ending on the Closing
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<PAGE> 50
Date (the "Pre-Closing Straddle Period") and the portion of such
period beginning on the date following the Closing Date, and for
purposes of Sections 5.19(d) and 5.19(e), each portion of such
period shall be deemed to be a taxable period. With respect to any
Taxes for the Straddle Period, at least thirty days prior to the
due date for the payment of such Taxes, Buyer shall present Seller
with a schedule detailing the computation of the Pre-Closing
Straddle Period Tax; and within ten days after Buyer presents
Seller with such schedule, Seller shall pay the Company the amount
of the Pre-Closing Straddle Period Tax as computed by Buyer. In
the event Seller disputes Buyer's computation of the Pre-Closing
Straddle Period Tax, Seller shall not be relieved of its obligation
to pay, in the first instance, any such disputed amount. Whether
any such disputed amount was in fact due from Seller shall be
resolved in accordance with Section 5.19(m). If upon such
resolution it is determined that any of such disputed amount was
not payable to Buyer and such amount has been paid to Buyer, then
Buyer shall refund to Seller such amount, plus interest at the rate
required to be paid under Section 6621 of the Code.
(g) Seller shall (x) prepare and file all Federal income
Tax and unitary state Tax returns for the Company and the Company
Subsidiaries with respect to all periods, or partial periods,
ending on or prior to the Closing Date (including all tax returns,
reports and forms relating thereto which are due after the Closing
Date) and (y) prepare and file or cause the Company and the Company
Subsidiaries to prepare and file all other Tax returns, reports and
forms for the Company which are due prior to the Closing Date, and
shall pay all Taxes with respect to clause (x) and at the time of
such filing shall pay or shall cause the Company or the Company
Subsidiaries to pay all Taxes with respect to clause (y). To the
extent requested by Seller, the Company and the Company
Subsidiaries shall participate in the filing of and shall file any
required Tax returns with respect to any period ending on or prior
to the Closing Date. Buyer shall prepare or cause to be prepared
the schedules in respect of the Company and the Company
Subsidiaries containing the information necessary for Seller to
prepare any consolidated or combined returns.
(h) Buyer or the Company and the Company Subsidiaries
shall prepare and file all state and local Tax returns, forms and
reports, other than returns with respect to unitary state Taxes,
for the Company and the Company Subsidiaries with respect to any
tax period for which such return, form or report is due after the
Closing Date, and shall remit all Taxes with respect thereto and
shall be free to make, or cause to be made, any tax elections in
respect of such Taxes and to claim any deductions or credits, in
connection therewith; provided that all returns filed by Buyer or
the Company and the Company Subsidiaries for any period beginning
prior to the Closing Date shall be prepared by Buyer, or the
Company and the Company Subsidiaries, in a manner consistent with
the Company's and the Company's Subsidiaries prior practices,
except for changes necessary to comply with changes in Law.
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<PAGE> 51
(i) Seller shall have exclusive control over any dispute
relating to any Tax liability or return of Seller or any Affiliate
of Seller (including the Company and the Company Subsidiaries for
periods prior to the Closing Date) filed by Seller for or with
respect to any period, or partial period, ending on or prior to the
Closing Date, provided that Seller shall keep Buyer currently
informed of the progress of any such dispute. In the event that
the Section 338(h)(10) Election is not made, Buyer shall be
entitled to participate in any such dispute at its own expense to
the extent the same relate to the Company or any Company
Subsidiary; and Seller, with the consent of Buyer, which will not
be unreasonably withheld, may settle any or all such disputes,
accept any determination as final, pay any Tax claim or take such
other action to contest or concede any Tax claimed. If Buyer shall
withhold its consent to any action desired to be taken by Seller in
connection with any such dispute, (x) Buyer shall be responsible
for, and shall indemnify and hold Seller and its Affiliates
harmless from and against, any Taxes required to be paid by Seller
in connection therewith in excess of the amount which Seller would
otherwise have paid if Buyer's consent had not been so withheld,
(y) Buyer shall thereafter control the content of all submissions
made by Seller to any administrative or judicial authority to the
extent they relate to the Company and (z) (i) if such dispute
involves issues other than those relating solely to the Company or
the Company Subsidiaries, Seller shall control all other aspects of
such dispute, or (ii) if such dispute involves only issues relating
solely to the Company or the Company Subsidiaries, Buyer shall
thereafter control such dispute. Buyer shall cooperate and shall
cause its Affiliates to cooperate with Seller and its Affiliates in
connection with any and all such disputes and will execute all
lawful, true and correct powers-of-attorney, affidavits, and other
papers necessary in connection therewith, and will provide Seller
reasonable access during normal business hours to the employees and
business, financial and Tax records or other similar information of
the Company and the Company Subsidiaries to the extent relating to
such dispute.
(j) Buyer and the Company shall have exclusive control
over any dispute relating to any Tax liability or return of Buyer
or the Company or any Company Subsidiary filed for or with respect
to any tax period for which a return is due after the Closing Date
(other than Federal income Taxes and unitary state Taxes relating
to periods or partial periods ending on or prior to the Closing
Date). Seller and its Affiliates shall cooperate with Buyer and
its Affiliates in connection with any and all such disputes and
will execute all lawful, true and correct powers-of-attorney,
affidavits, and other papers necessary in connection therewith, and
will provide Buyer, the Company and the Company Subsidiaries
reasonable access during normal business hours to the employees and
business, financial and Tax records or other similar information of
Seller and its Affiliates to the extent relating to such dispute.
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<PAGE> 52
(k) Buyer shall cause the Company and the Company
Subsidiaries to elect, where permitted by law, to carryforward any
net operating loss, net capital loss, charitable contribution or
other item arising after the Closing Date that could, in the
absence of such an election (collectively, "Carrybacks"), be
carried back to a taxable period of the Company or the Company
Subsidiaries ending on or before the Closing Date in which the
Company or the Company Subsidiaries filed a consolidated, combined
or unitary tax return with Seller or any of Seller's Affiliates.
Buyer, on its own behalf and on behalf of its tax Affiliates,
hereby waives any right to use or apply any net operating loss, net
capital loss, charitable contribution or other item of the Company
for any tax year ending on any date following the Closing Date to
part or all of the period prior to the Closing Date.
(l) As soon as practicable, but in any event within 15
days after Seller's or Buyer's request, as the case may be, Buyer
shall deliver to Seller, or Seller shall deliver to Buyer, as the
case may be, such information and other data relating to the Tax
returns and Taxes of the Company and shall make available such
knowledgeable employees of Seller, Buyer, the Company or any of
their Affiliates, as the case may be, as Seller or Buyer, as the
case may be, may reasonably request, including providing the
information and other data customarily required by Seller or Buyer,
as the case may be, to cause the completion and filing of all Tax
returns for which it has responsibility or liability under this
Agreement or to respond to audits by any Taxing Authority with
respect to any Tax returns or Taxes for which it has any
responsibility or liability under this Agreement or to otherwise
enable Seller or Buyer, as the case may be, to satisfy its
accounting or tax requirements.
(m) If Seller and Buyer disagree as to the amount of
Taxes for which either of them is liable to the other under this
Section 5.19, Seller and Buyer shall promptly consult each other in
an effort to resolve such dispute. If any such point of
disagreement cannot be resolved within 15 days of the date of
consultation, Seller and Buyer shall within ten days after such
15-day period jointly select a firm of nationally recognized
independent public accountants who has not represented either Buyer
or Seller for three years prior to the date of the dispute (the
"Neutral Auditors") to act as an arbitrator to resolve all points
of disagreement concerning tax accounting matters with respect to
this Agreement. If the parties cannot agree on the selection of
the Neutral Auditors within such ten-day period, then such Neutral
Auditors shall be selected by the American Arbitration Association.
All fees and expenses relating to the work performed by the
arbitrator in accordance with this Section 5.19(m) shall be borne
equally by Seller and Buyer.
(n) Seller and Buyer shall (x) each give the other
prompt written notice of the receipt of any claim by any taxing
authority that, if successful, may result in an indemnity payment
pursuant to this Section 5.19 and (y) each transmit to the other a
written description reasonably detailing the nature of the claim, a
copy of all papers served with respect to such claim and the basis
of its claim for indemnification under this Section 5.19.
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<PAGE> 53
(o) Seller will not allow the Company or any Company
Subsidiary to elect to be excluded from any consolidated federal
income tax return of the Seller and its Affiliates with respect to
which it is otherwise includible on account of any taxable period,
whether of 30 days or less or otherwise.
(p) For purposes of this Agreement, the following terms
shall have the following meanings:
(i) "Code" means the Internal Revenue Code of 1986,
as amended.
(ii) "Returns" means any and all returns, decla-
rations, reports, statements and other documents required to be
filed in respect of any Tax.
(iii) "Section 338 Forms" means all returns,
documents, statements, and other forms that are required to be
submitted to any Federal, state, county, or other local Taxing
Authority in connection with a Code Section 338(h)(10) Election.
Section 338 Forms shall include, without limitation, any "statement
of section 338 election" and United States Internal Revenue Service
Form 8023 (together with any schedules or attachments thereto) that
are required pursuant to relevant Treasury Regulations and any
substantially similar forms under a state or local statute
corresponding to Federal laws.
(iv) "Section 338(h)(10) Election" means an election
described in Section 338(h)(10) of the Code with respect to
Seller's sale of the Company Common Stock to Buyer pursuant to this
Agreement. "Section 338(h)(10) Election" shall also include any
substantially similar election under a state or local statute
corresponding to Federal laws.
(v) "Tax" means any of the Taxes.
(vi) "Taxes" means all federal, state, local and
foreign income, profits, franchise, unincorporated business,
withholding, capital, general corporate, customs duties,
environmental (including taxes under Section 59A of the Code),
disability, registration, alternative, add-on, minimum, estimated,
sales, goods and services, use, occupation, property, severance,
production, excise, recording, ad valorem, gains, transfer,
value-added, unemployment compensation, social security premium,
privilege and any and all other taxes (including interest,
additions to tax and penalties thereon, and interest on such addi-
tions to tax and penalties);
(vii) "Tax Laws" means the Code, Federal, state,
county, local, or foreign laws relating to Taxes and any
regulations or official administrative pronouncements released
thereunder.
(viii) "Taxing Authority" means any Governmental
Entity having jurisdiction over the assessment, determination,
collection, or other imposition of Tax.
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5.20 Existing Insurance Coverage. As of the Closing Date, the
Seller or its Affiliates will cancel insurance coverage applicable
to the Company or the Company Subsidiaries for occurrences (with
respect to any "occurrence" policies) or claims made (with respect
to any "claims-made" policies) after the Closing Date (other than
insurance policies in the name of the Company Subsidiaries);
provided, however, that the remaining insurance coverage shall be
available to the Buyer, the Company and the Company Subsidiaries
with respect to insured occurrences or series of occurrences
relating to the Company, the Company Subsidiaries or the Business
on or prior to the Closing Date, if and only to the extent that the
Buyer or the Company has assumed or paid the loss or liability
attributed to such occurrences. If after the Closing, the Seller
actually receives from an insurer cash proceeds (excluding any
return of premium or reimbursed attorneys or investigation or other
fees) attributable to such insurance coverage with respect to any
insured occurrences or any series of occurrences on or prior to the
Closing Date or any claims that were asserted on or prior to the
Closing Date, then such cash proceeds shall be paid to the Buyer
net of any deductible, co-payment, retro fees, self-insured
premiums, defense costs or other charges paid or payable to the
insurance carrier or obligations to reimburse the insurance carrier
for which the Seller (or any of its Affiliates) is liable, to the
extent that the Buyer or the Company has assumed or paid the loss
or liability attributed to such occurrence or series of
occurrences. The Buyer shall reimburse the Seller for any
administrative costs, retro fees, premiums, self-insured or
deductible loss costs or other expenses that the Seller is charged
after the Closing by such insurance carrier relating to insurance
coverage applicable to the Company or the Company Subsidiaries
prior to Closing.
5.21 Certain Obligations. "Seller's Company Obligations"
shall mean any obligation, commitment, liability or responsibility
of the Seller, its Affiliates or their Predecessors (whether or not
also an obligation, commitment, liability, or responsibility of or
claim against, in whole or in part, the Company, the U.K. Sub or
the Pipeline Sub) arising, undertaken or created before the Closing
Date in connection with, on behalf of or for the benefit of any
Cameron Entity, or arising from the conduct of the Business,
including without limitation (i) any consulting, employment or
severance agreements, guarantees, letters of credit, performance
bonds, or indemnities, or obligations or indemnities to officers or
directors of any Cameron Entity, (ii) any agreements with any
transferors to the Seller, its Affiliates, or their Predecessors,
of any assets of any Cameron Entity or of the Business, (iii) any
labor or collective bargaining agreements relating to any Cameron
Entity, (iv) any contracts with any Governmental Entity relating to
any Cameron Entity, (v) any sales or purchase agreements relating
to any Cameron Entity, (vi) any leases of real or personal proper-
ty relating to any Cameron Entity, and (vii) any other agreements
or commitments relating to any Cameron Entity under which the
Seller, its Affiliates or Predecessors will have any liability
after the Closing Date; provided, however, that the Seller's
Company Obligations shall exclude the matters that the Seller is
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required to indemnify pursuant to Section 5.22(b) or Section
5.22(f). The Seller shall cause the Company to assume the Seller's
Company Obligations, effective on the Closing Date, and the Company
shall thereafter discharge the same in accordance with their terms.
5.22 Survival; Indemnification.
(a) Survival of Representations, Warranties and
Covenants. Except for the representation and warranty of the
Seller in Section 3.23 hereof and the Buyer in Section 4.16 hereof
which will survive the Closing and remain in full force and effect
thereafter until 18 months after the Closing, the representations
and warranties of the parties contained in this Agreement shall
expire with, and be terminated and extinguished by, the Closing of
the transactions contemplated hereby and shall not survive the
Closing Date. Any claim for indemnification with respect to the
representation and warranty of the Seller in Section 3.23 hereof
and the Buyer in Section 4.16 hereof that is not asserted by notice
given as herein provided within the 18-month period may not be
pursued and hereby is irrevocably waived and released after such
time. Subject to the preceding 18-month limitation on the
indemnity with respect to Sections 3.23 and 4.16, the covenants of
the parties in Article V hereof (including without limitation the
indemnities contained therein) will survive the Closing and remain
in full force and effect thereafter without limitation as to time,
except in connection with (i) any applicable statute of limitations
or (ii) any such covenant that, by its terms, is otherwise limited
with respect to time.
(b) Cross Indemnity. Subject to the terms and conditions
of this Section 5.22, the Seller hereby agrees to indemnify and
hold the Buyer, its Affiliates, and their directors, officers or
employees (collectively, "Buyer's Group") harmless from and against
all demands, claims, causes of action, assessments, losses, damages
(including without limitation fines, penalties and punitive
damages), liabilities and costs and expenses, including without
limitation attorneys' fees and any expenses incident to the
enforcement of this Section 5.22 (collectively, "Losses"), which
the Buyer's Group may suffer, sustain or become subject to by
reason of or resulting from (i) any inaccuracy in the
representation or warranty of the Seller contained in Section 3.23
of this Agreement, or (ii) any breach of any covenant by the Seller
in Article V of this Agreement. Subject to the terms and con-
ditions of this Section 5.22, the Buyer hereby agrees to indemnify
and hold the Seller, its Affiliates, and their directors, officers
or employees (collectively, "Seller's Group") harmless from and
against all Losses which the Seller's Group may suffer, sustain or
become subject to by reason of or resulting from (i) any inaccuracy
in the representation or warranty of the Buyer contained in Section
4.16 of this Agreement, (ii) any breach of any covenant by the
Buyer in Article V of this Agreement, or (iii) the Seller's Company
Obligations. The party seeking indemnification pursuant to this
Section 5.22 is hereinafter referred to as an "Indemnified Party"
and the party from whom indemnification is sought is hereinafter
referred to as an "Indemnifying Party."
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(c) Limitation of Indemnification. Notwithstanding any
contrary provision, no claim by either party against the other for
indemnification arising under this Article V shall be valid and
assertible unless the aggregate amount of Losses associated with
such claim shall exceed $100,000. Further, any claims by the
Indemnified Party against the Indemnifying Party shall be
determined net of any tax benefit actually recognized and utilized
to offset or reduce the tax liability of the Indemnified Party or
the other members of its group. All payments pursuant to this
Section 5.22 shall be treated as adjustments to the purchase price
of the Company Common Stock.
(d) Sole Remedy. Other than the rights, obligations, and
remedies provided for in Article I, Article V, Article VII and
Article VIII hereof, the Buyer and the Seller agree that the rights
to indemnification provided in this Section 5.22 and elsewhere in
this Article V will be the exclusive rights, obligations and
remedies with respect to all provisions of this Agreement. Each
party, on behalf of itself and its Affiliates, irrevocably waives
any claim, cause of action or theory of liability it might
otherwise be entitled to assert in respect of such provisions
except for the right to seek indemnification on the terms and
subject to the conditions set forth in this Section 5.22 and
elsewhere in this Article V.
(e) Additional Indemnification by the Buyer. Subject to
the terms and conditions of this Section 5.22 and in addition to
the indemnification provided for in Section 5.22(b), the Buyer
agrees, other than the Losses that the Seller is required to
indemnify pursuant to Section 5.22(b) or Section 5.22(f), the
employee benefit matters addressed in Section 5.12 and the tax
matters addressed in Section 5.19, to indemnify and hold the
Seller's Group harmless from and against all Losses which the
Seller's Group may suffer, sustain or become subject to by reason
of or resulting from any liabilities or obligations of or relating
to, or claims against, any Cameron Entity or the Business on,
before or after the Closing Date, including without limitation (i)
to indemnify and hold the Seller's Group harmless from and against
all Losses which the Seller's Group may suffer, sustain or become
subject to by reason of or resulting from any Product Liability
Claims arising out of or resulting from Products sold or furnished
by the Seller, any of its Affiliates or any Cameron Entity
(including without limitation any product liability assumed in
connection with the acquisition of any business or product line)
on, before or after the Closing Date; (ii) to indemnify and hold
the Seller's Group harmless from and against all Losses which the
Seller's Group may suffer, sustain or become subject to by reason
of or resulting from (A) any noncompliance of the operations,
properties or business activities of any Cameron Entity or the
Business with any Environmental Law on, before or after the Closing
Date or (B) any liabilities or obligations of or relating to, or
claims against, any Cameron Entity or the Business based upon any
Environmental Law, or arising from the disposal of any Regulated
Materials, on, before, or after the Closing Date; and (iii) to
indemnify and hold the Seller's Group harmless from and against all
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Losses which the Seller's Group may suffer, sustain or become
subject to by reason of or resulting from (A) any workers'
compensation claim filed against any Cameron Entity on, before or
after the Closing Date, and (B) any employment or severance
agreements entered into by the Seller or the Company relating to
employees of the Company on, before or after the Closing Date,
other than severance payments under the Employment Agreement listed
on Section 5.22(e) of the Seller Disclosure Schedule. It is the
intention of the parties that the indemnity provided herein shall
survive the Closing and shall, with respect to environmental claims
under CERCLA, be an agreement expressly not barred by 42 U.S.C.
Section 9607(e)(1).
(f) Additional Indemnification by the Seller. Subject to
the terms and provisions of this Section 5.22 and in addition to
the indemnification provided for in Section 5.22(b), the Seller
agrees, other than the Losses that the Buyer is required to
indemnify pursuant to Section 5.22(b), the employee benefit matters
addressed in Section 5.12 and the tax matters addressed in Section
5.19, (i) to indemnify and hold the Buyer's Group harmless from and
against all Losses which the Buyer's Group may suffer, sustain or
become subject to by reason of or resulting from any liabilities or
obligations of or relating to, or claims against, the Seller or the
Seller Subsidiaries on, before or after the Closing Date to the
extent that such liabilities, obligations or claims (x) do not
relate to the Business and (y) arise from the activity of (a) any
Cameron Entity (other than the Company or the Pipeline Sub) before
the Closing Date, or (b) the Seller or any of the Seller's
subsidiaries (other than the Cameron Entities), (ii) except to the
extent the actions of the Buyer, the Company or their Affiliates
may cause or increase any such Losses after the Closing Date, to
indemnify and hold the Buyer's Group harmless from and against all
Losses which the Buyer's Group may suffer, sustain or become
subject to by reason of or resulting from any Regulated Materials
disposed of on, or discharged into the environment at, the Katy
Road Site or the Gulf Metals Site on or before the Closing Date;
and (iii) to indemnify and hold the Buyer's Group harmless from and
against all Losses which the Buyer's Group may suffer, sustain or
become subject to by reason of or resulting from severance payments
under the Employment Agreement listed on Section 5.22(e) of the
Seller Disclosure Schedule. It is the intention of the parties
that the indemnity provided herein shall survive the Closing and
shall, with respect to environmental claims under CERCLA, be an
agreement expressly not barred by 42 U.S.C. Secion 9607(e)(1).
(g) Conditions of Indemnification of Third Party Claims.
The obligations and liabilities of the parties under this Article V
with respect to claims of Losses resulting from the assertion of
liability by third parties ("Third-Party Claim") shall be subject
to the following terms and conditions:
(i) The Indemnified Party shall give written notice
to the Indemnifying Party of any such Claim promptly after the
Indemnified Party receives notice thereof, which written notice
shall state the nature and basis of such Claim and, if
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determinable, the amount thereof, provided that failure to so
notify the Indemnifying Party shall in no case prejudice the rights
of the Indemnified Party under this Agreement unless the
Indemnifying Party shall actually be prejudiced by such failure and
then only to the extent of such actual prejudice. Upon receipt of
notice of any such Claim from the Indemnified Party, the Indemni-
fying Party will undertake the defense thereof by representatives
of its own choosing.
(ii) In the event that the Indemnifying Party, within
a reasonable time after notice of any such Claim, fails to defend
the same, the Indemnified Party shall (upon further notice to the
Indemnifying Party) have the right to undertake the defense,
compromise or settlement of such Claim on behalf of and for the
account and risk of the Indemnifying Party, subject to the right of
the Indemnifying Party to assume the defense of such Claim at any
time prior to settlement, compromise or final determination
thereof.
(iii) Anything in this Section 5.22 to the contrary
notwithstanding, the Indemnifying Party shall have the right, at
its own cost and expense, to defend, compromise or settle such
Claim; provided, however, that the Indemnifying Party shall not,
without the Indemnified Party's written consent, settle or
compromise any Claim or consent to entry of any judgment which does
not include as an unconditional term thereof the giving by the
claimant or plaintiff to the Indemnified Party a release from all
liability in respect of such Claim. The Indemnified Party shall
have the right at its own expense to participate in the defense of
the Claim.
(h) Certain Definitions. As used in this Agreement:
(i) "Product Liability Claim" means any claim or
cause of action, regardless of form and whether absolute, accrued,
contingent or otherwise, arising out of injury to persons or damage
to property, relating to the design or manufacture of or the
introduction into commerce by sale, exchange or assignment of the
Products.
(ii) "Business" means research, development, engi-
neering, melting, refining, remelting, forging, extrusion,
machining, manufacturing, distribution, sales, marketing, service
or repair operations associated with the Products.
(iii) "Products" means closed die forgings (includ-
ing rotating parts for aircraft engines or industrial turbines,
aircraft landing gear, structural airframe parts, ordnances and
related parts, military and power plant nuclear forgings, valves,
heavy wall pipe and fittings, power generation forgings and
oilfield equipment forgings), extrusions (including for aircraft
engines, pipe, oilfield equipment, bar stock and ordnances), super
alloy powder products, skid rails and related components for use in
metallurgical reheat furnaces, including custom-shaped insulators
and high velocity burners, and other forged products.
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(iv) "Cameron Entities" means (x) the Company, (y)
the Pipeline Sub and (z) that portion of each of the following
companies to the extent that it presently conducts or previously
conducted all or part of the Business: (i) the U.K. Sub, (ii) the
forged products division of Cameron Iron Works, Inc., (iii) the
forged products division of Cameron Iron Works USA, Inc., (iv)
Cameron Forge Company, (v) the forged products division of Cameron
Iron Works Limited, (vi) Cooper Industries, Inc., (vii) Cooper
(Great Britain) Ltd., (viii) Cameron Iron Works, Inc., (ix) Cameron
Iron Works USA, Inc., and (x) Cameron Iron Works Limited, and (xi)
any direct or indirect Predecessor or successor to any of the
foregoing that conducted or conducts all or part of the Business.
(v) "Predecessor" means an entity which has previ-
ously held an interest to which the entity to whom the reference is
made has succeeded, including without limitation an entity which
conveyed, transferred or assigned all or substantially all of its
assets to the entity to whom the reference is made or an entity
which was merged or amalgamated into or consolidated with the
entity to whom the reference is made.
(vi) "Katy Road Site" means the former Cameron Iron
Works, Katy Road Facility located at 1000 Silber Road, Houston
(Harris County), Texas.
(vii) "Gulf Metals Site" means the Gulf Metals State
Superfund Site in Houston (Harris County), Texas, located northeast
of the intersection of Mykawa Road and Almeda-Genoa Road.
(viii) "Affiliate" shall mean any person or entity
that directly or indirectly controls or is controlled by or is
under the common control of the party referred to.
5.23 Repurchase of Receivables. Pursuant to the Factoring
Agreement, the Company has agreed to assign to the Seller prior to
Closing its trade and notes receivables (the "Receivables"). The
Buyer agrees to purchase from the Seller all Receivables that are
outstanding 90 days after the Closing Date. Within five business
days following the 90th day after the Closing Date, the Seller will
prepare a statement listing the balance of the outstanding
Receivables on such date, deducting the same reserve amount
previously deducted in determining the Receivables Purchase Price.
Within five business days after receipt of such statement, subject
to the terms of the Factoring Agreement, the Company shall pay to
the Seller such amount at its bank account designated in this
Agreement.
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect the
Transactions Contemplated by this Agreement. The respective
obligations of each party to effect the transactions contemplated
by this Agreement shall be subject to the satisfaction at or prior
to the Closing Date of the following conditions:
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(a) Each of the Seller and the Buyer shall have executed
and delivered the Investment Agreement.
(b) The transactions contemplated by this Agreement
shall have been approved by the requisite affirmative vote of the
holders of the Buyer Common Stock and the requisite consent to the
transactions contemplated by this Agreement shall have been
obtained from the holders of the 10 3/4% Senior Notes due 2003
issued pursuant to the Indenture, dated as of March 16, 1993, by
and among the Buyer, certain subsidiaries of the Buyer and State
Street Bank and Trust Company, as Trustee, and by The CIT
Group/Business Credit, Inc.
(c) Articles of amendment, signed in accordance with the
Massachusetts Business Corporation Law and setting forth the
Authorized Shares Amendment, the Fair Price Charter Amendment, and
the due adoption thereof, shall have been filed with the Secretary
of the Commonwealth of Massachusetts and shall be in full force and
effect.
(d) The Buyer's Board of Directors shall have adopted
and approved the Control Share Acquisitions Amendment and it shall
be in full force and effect.
(e) The Rights Agreement shall have been executed and
delivered by the Buyer and the other party thereto and shall be in
full force and effect.
(f) No statute, rule, regulation, executive order, decree
or injunction shall have been enacted, entered, promulgated or
enforced, and no action, suit or proceeding shall be pending or
threatened, by any Governmental Entity of competent jurisdiction
which prohibits or challenges the consummation of the transactions
contemplated by this Agreement, or conditions such consummation on
the matters referred to in the last sentence of Section 5.6(b)
hereof, and is in effect.
(g) The Ancillary Agreements shall have been negotiated
on terms mutually satisfactory to the Buyer and the Seller and
executed and delivered by each of the parties thereto.
6.2 Conditions of Obligations of the Seller to Effect the
Transactions Contemplated by this Agreement. The obligations of
the Seller to effect the transactions contemplated by this
Agreement are further subject to the satisfaction at or prior to
the Closing Date of the condition that the representations and
warranties of the Buyer set forth in this Agreement and qualified
as to materiality or Material Adverse Effects shall be true and
correct and those not so qualified shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing Date, as if made at and as of the Closing Date (except for
representations and warranties that expressly speak only as of some
other time), the Buyer shall have delivered the documents and other
items to be delivered pursuant to Section 2.3, and the Buyer shall
have performed and complied, in all material respects, with all
obligations and covenants required to be performed or complied with
by it under this Agreement at or prior to the Closing Date.
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6.3 Conditions of Obligations of the Buyer to Effect the
Transactions Contemplated by this Agreement. The obligations of
the Buyer to effect the transactions contemplated by this Agreement
are further subject to the satisfaction at or prior to the Closing
Date of the condition that the representations and warranties of
the Seller set forth in this Agreement and qualified as to
materiality or Material Adverse Effects shall be true and correct
and those not so qualified shall be true and correct in all
material respects as of the date of this Agreement (except to the
extent that the transactions set forth on Annex IV have not been
consummated as of such date) and as of the Closing Date, as if made
at and as of the Closing Date (except for representations and
warranties that expressly speak only as of some other time), the
Seller shall have delivered the documents and other items to be
delivered pursuant to Section 2.2, and the Seller shall have
performed and complied, in all material respects, with all obliga-
tions and covenants required to be performed or complied with by
them under this Agreement at or prior to the Closing Date.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date, whether before or after approval by the
shareholders of the Buyer of the transactions contemplated by this
Agreement:
(a) by mutual consent of the parties hereto;
(b) by the Seller or the Buyer, if the transactions
contemplated by this Agreement shall not have been consummated
before June 30, 1994 (unless the failure to consummate the
transactions contemplated by this Agreement by such date shall be
due to the breach of this Agreement by the party seeking to
terminate this Agreement);
(c) by the Seller, if there has been a material violation
or breach by the Buyer of any agreement, representation or warranty
contained in this Agreement which has rendered the satisfaction of
any condition to the obligations of the Seller impossible and such
violation or breach has not been waived by the Seller;
(d) by the Buyer, if there has been a material violation
or breach by the Seller of any agreement, representation or
warranty contained in this Agreement which has rendered the
satisfaction of any condition to the obligations of the Buyer
impossible and such violation or breach has not been waived by the
Buyer; or
(e) by either of the parties hereto if this Agreement and
the transactions contemplated hereby are not duly approved by the
shareholders of the Buyer at a meeting of shareholders (or any
adjournment thereof) duly called and held for such purpose.
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7.2 Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions
contemplated hereby by either or both of the parties pursuant to
Section 7.1, written notice thereof shall forthwith be given to the
other party hereto and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without
further action by either of the parties hereto. If this Agreement
is terminated as provided herein:
(a) upon request therefor, each party will redeliver all
documents, work papers and other material of the other party
relating to the transactions contemplated hereby, whether obtained
before or after the execution hereof, to the party furnishing the
same or will destroy such documents;
(b) all information received by the Seller and the
Company with respect to the business of the Buyer or by the Buyer
with respect to the business of the Company (other than information
which is a matter of public knowledge or which has heretofore been
or is hereafter published in any publication for public distri-
bution or filed as public information with any Governmental Entity)
shall not at any time be used for the advantage of the Person
receiving the information or to the detriment of the Person
furnishing such information; and each of the Seller and the Buyer
will use its reasonable best efforts to prevent the disclosure
thereof to third Persons except as may be required by law;
(c) neither party hereto shall have any liability or fur-
ther obligation to the other party hereto pursuant to this
Agreement except as stated in this Section 7.2 and in Sections
5.4(d), 5.10 and 5.11; and
(d) all filings, applications and other submissions made
pursuant to Sections 5.6, 5.7 and 5.8 shall, to the extent
practicable, be withdrawn from the agency or other Person to which
made.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by
written agreement of each of the parties.
8.2 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to
comply with any obligation, covenant, agreement or condition herein
may be waived by the party or parties entitled to the benefits
thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in this
Section 8.2.
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8.3 Investigations; Survival Upon Termination. Subject to
Section 5.22(a), the respective representations and warranties of
the parties contained herein or in any certificates, schedules,
exhibits or other documents delivered prior to or at the Closing
shall not be deemed waived or otherwise affected by any
investigation made by any party hereto. Each and every such
representation and warranty shall expire with, and be terminated
and extinguished by, the termination of this Agreement pursuant to
Section 7.1 or otherwise; and thereafter none of the parties hereto
or any of their respective officers or directors shall be under any
liability whatsoever with respect to any such representations or
warranties. This Section 8.3 shall have no effect upon any other
obligation of the parties hereto, whether to be performed before or
after the Closing Date.
8.4 Notices. All notices and other communications hereunder
shall be validly given, made or served, if in writing and delivered
personally, sent by facsimile transmission (receipt of which is
confirmed) or mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the fol-
lowing addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof):
(a) if to Seller or the Company, to:
Cooper Industries, Inc.
First City Tower, Suite 4000
1001 Fannin Street
Houston, Texas 77002
Attention: General Counsel
Facsimile No.: 713-739-5882
(b) if to the Buyer, to:
Wyman-Gordon Company
244 Worcester Street
Box 8001
North Grafton, Massachusetts 01536-8001
Attention: Wallace F. Whitney, Jr., Esq.
Facsimile No.: (508) 839-7500
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich, Esq.
Facsimile No.: (212) 403-2000
Notice given by facsimile shall be deemed delivered on
the business day after it is sent to the recipient. Notice given
by mail as set out above shall be deemed delivered five calendar
days after the same is mailed.
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8.5 Annexes, Schedules and Exhibits. All annexes,
schedules and exhibits attached hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if
set forth in full herein. All references to "this Agreement"
shall be deemed to include all annexes, schedules and exhibits to
this Agreement. Information set forth in any section to the
Seller Disclosure Schedule or the Buyer Disclosure Schedule is
deemed set forth in all other sections of such Disclosure
Schedule. Disclosure of any fact or item in any annex, schedule
or exhibit hereto referenced by a particular paragraph or section
in this Agreement shall, should the existence of the fact or item
or its contents be relevant to any other paragraph or section, be
deemed to be disclosed with respect to that other paragraph or
section whether or not a specific cross reference appears.
Disclosure of any fact or item in any annex, schedule or exhibit
hereto shall not necessarily mean that such item or fact
individually is material to (i) the Seller or the Company
individually or the Seller and the Company taken as a whole or
(ii) the Buyer or its subsidiaries individually or the Buyer and
its subsidiaries taken as a whole.
8.6 Descriptive Headings. The descriptive headings herein
are inserted for convenience only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
8.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which shall be considered one and the same agreement.
8.8 Entire Agreement; Assignment. The Confidentiality
Agreement, the Investment Agreement, this Agreement, including
the annexes, schedules and exhibits hereto and thereto, and the
other instruments, agreements, documents, schedules and
certificates referred to herein and therein, embody the entire
agreement and understanding of the parties hereto and supersede
all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by either of the parties hereto
without the prior written consent of the other party.
8.9 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York
without regard to any applicable principles of conflicts of law.
8.10 Specific Performance. The parties hereto agree that if
any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy at law would
exist and damages would be difficult to determine, and that the
parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
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8.11 Alternative Dispute Resolution.
(a) The parties shall attempt in good faith to resolve
any dispute arising out of or relating to this Agreement promptly
by negotiations between executives who have authority to settle
the controversy. Any party may give the other party written
notice of any dispute not resolved in the normal course of
business. Within 20 days after delivery of said notice,
executives of both parties shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem
necessary, to exchange relevant information and to attempt to
resolve the dispute. If the matter has not been resolved within
60 days of the disputing party's notice, or if the parties fail
to meet within 20 days, either party may initiate mediation of
the controversy or claims as provided in Section 8.11(c).
(b) If a negotiator intends to be accompanied at a
meeting by an attorney, the other negotiator shall be given at
least three working days' notice of such intention and may also
be accompanied by an attorney. All negotiations pursuant to this
clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of
Evidence and state rules of evidence.
(c) If negotiation fails within the time limits
provided in Section 8.11(a), either party may initiate a
mediation proceeding by a request in writing to the other party.
Thereupon, both parties will be obligated to engage in a
mediation. The proceeding will be conducted in accordance with
the presently effective CPR Model Procedure for Mediation of
Business Disputes, with the following exceptions:
(i) The mediator shall be an attorney experienced
in mediating large commercial disputes, who shall be compensated
at his normal hourly or per diem rates for all time spent by him
in connection with the proceedings, and whose fees shall be borne
equally by the parties. If the parties have not agreed within 30
days of the request for mediation on the selection of a mediator
willing to serve, the Center for Public Resources, upon the
request of either party, shall appoint a member of the CPR Panels
of Neutrals who meets the above qualifications as the mediator.
(ii) Efforts to reach a settlement will continue
until the conclusion of the proceeding, which is deemed to occur
when: (a) a written settlement is reached, (b) the mediator
concludes and informs the parties in writing that further efforts
would not be useful, or (c) after making a good faith effort to
mediate, either party or both parties assert in writing that an
impasse has been reached. Neither party may withdraw before the
conclusion of the proceeding. Thereafter, if a settlement has
not been reached, the parties shall be free to pursue such rights
and remedies, at law or in a equity, as may be available to them.
(d) The parties regard the obligations in this Section
8.11 as an essential provision of this Agreement and one that is
legally binding on them. In case of a violation of such
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obligation by either party, the other may bring an action to seek
enforcement of such obligation in any court of law having
jurisdiction thereof. This Section 8.11 shall in no way affect
the arbitration procedures set forth in Article I or Article V of
this Agreement.
8.12 Non-Competition.
(a) The Seller agrees that, until the later to occur
of (i) the Seller's ceasing to own at least 10% of the
outstanding shares of Buyer Common Stock and (ii) the expiration
of a period of three years commencing on the Closing Date, the
Seller will not, and the Seller will not permit any of its
subsidiaries (regardless of whether such Person is a subsidiary
of the Seller on the date hereof) to, engage in the manufacturing
or marketing of the Products currently manufactured or marketed
by the Company or the U.K. Sub in competition with the Buyer or
any subsidiary of the Buyer (a "Competing Business"); provided,
however, that (i) the Seller or any Affiliate of the Seller
(other than the Company and the Company Subsidiaries) may
continue any existing non-aerospace forging operations and may
make any reasonable maintenance, improvements and refinements
thereto; and (ii) the Seller or any Affiliate of the Seller may
acquire any business which includes ancillary forging operations
in support of its main business; provided further that this
covenant shall not prevent the Seller or its Affiliates from
acquiring shares in or the business or assets of any company,
business or entity (the "Target") having a Competing Business (i)
if no more than $10,000,000 of the Target's sales revenue (as
recorded in the then latest available audited accounts) arises
from the Competing Business or (ii) if the sales revenue of the
Competing Business is greater than $10,000,000 of the Target's
sales revenue, if the Seller uses its reasonable commercial
efforts to dispose of the Competing Business within a two-year
period from the date of acquisition of the Target. If the Seller
cannot dispose of the Competing Business on terms reasonably
acceptable to it during such two-year period, then the Seller
shall be free to retain and operate the Competing Business
without any restriction of this Agreement. The Seller ac-
knowledges and agrees that the foregoing restrictions are rea-
sonably designed to protect the Buyer's substantial investment
and are reasonable with respect to duration, geographical area
and scope.
(b) In the event of breach by the Seller or any sub-
sidiary of the Seller of any of the provisions of Section
8.12(a), the Buyer may, in addition to any other rights or
remedies existing in its 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 of Section 8.12(a).
8.13 Further Assurances. Each party shall execute and
deliver both before and after the Closing such instruments,
agreements and other documents and take such other actions as the
other party may reasonably request to consummate or implement the
transactions contemplated hereby or to evidence such events or
matters.
-62-<PAGE>
<PAGE> 67
8.14 No Third-Party Beneficiaries. Nothing in this
Agreement, express or implied, is intended to confer upon any
other Person, other than the Buyer's Group and the Seller's Group
in connection with Section 5.22, any rights or remedies of any
nature whatsoever under or by reason of this Agreement. Nothing
in this Agreement is intended to relieve or discharge the
obligation of any third Person to (or to confer any right of
subrogation or action over against) any party to this Agreement.
8.15 Remedies; Waiver. All rights and remedies existing
under this Agreement and any related agreements or documents are
cumulative to and not exclusive of, any rights or remedies
otherwise available under applicable law. No failure on the part
of any party to exercise or delay in exercising any right
hereunder shall be deemed a waiver thereof, nor shall any single
or partial exercise preclude any further or other exercise of
such or any other right.
8.16 Severability. If any provision of this Agreement is
determined to be invalid, illegal or unenforceable by any
Governmental Entity, the remaining provisions of this Agreement
to the extent permitted by Law shall remain in full force and
effect, provided that the economic and legal substance of the
transactions contemplated by this Agreement are not affected in
any manner materially adverse to any party. In the event of any
such determination, the parties agree to negotiate in good faith
to modify this Agreement to fulfill as closely as possible the
original intents and purposes hereof.
-63-<PAGE>
<PAGE> 68
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto
duly authorized as of the date first written above.
COOPER INDUSTRIES, INC.
By: /s/ H. John Riley, Jr.
H. John Riley, Jr.
President and Chief
Operating Officer
WYMAN-GORDON COMPANY
By: /s/ Luis E. Leon
Luis E. Leon
Vice President, Treasurer
and Chief Financial Officer
-64-<PAGE>
<PAGE> 69
ANNEX V
Fair Price Charter Amendment
Article 6(e)2 of the Articles of Organization of the Buyer
shall be amended to add the following sentence to the end
thereof:
Notwithstanding the foregoing, Cooper Industries, Inc.
("Cooper") and its Affiliates and Associates (together, the
"Cooper Group") shall not be deemed to be an Interested
Stockholder for so long as (A) the Cooper Group beneficially
owns at least 10% or more of the outstanding shares of
Common Stock continuously from and after the Closing Date
(as defined in the Stock Purchase Agreement, dated as of
January 10, 1994, between Cooper and the Company) and (B)
the Cooper Group does not acquire beneficial ownership of
any shares of Common Stock in breach of the Investment
Agreement, dated as of January 10, 1994, between Cooper and
the Company (other than an inadvertent breach which is
remedied as promptly as practicable by a transfer of the
shares of Common Stock so acquired to a person or entity
which is not a member of the Cooper Group).
-65-
</TEXT
<PAGE> 1
EXHIBIT 99.2
INVESTMENT AGREEMENT
BETWEEN
COOPER INDUSTRIES, INC.
AND
WYMAN-GORDON COMPANY
DATED AS OF JANUARY 10, 1994
-12-<PAGE>
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
Parties B-1
Preambles B-1
ARTICLE I CERTAIN COVENANTS B-1
Section 1.1 Restrictions on Resale or Other
Dispositions B-1
Section 1.2 Distribution of Shares B-2
Section 1.3 Undertaking to File Reports and
Cooperate in Rule 144 Transactions B-3
Section 1.4 Delivery of Financial Statements B-3
Section 1.5 Amendments to the Company's Articles
of Organization and By-Laws B-3
ARTICLE II VOTING, OWNERSHIP AND OTHER RESTRICTIONS B-4
Section 2.1 Obligation to be Counted for Quorum B-4
Section 2.2 Voting by Cooper B-4
Section 2.3 Cooper Standstill Agreements B-4
Section 2.4 Legend and Stop Transfer Order B-6
ARTICLE III REGISTRATION RIGHTS B-6
Section 3.1 Certain Definitions B-6
Section 3.2 Demand Registration B-7
Section 3.3 Piggyback Registration B-9
Section 3.4 Expenses B-11
Section 3.5 Registration and Qualifications B-11
Section 3.6 Conversion of other Securities, etc. B-14
Section 3.7 Underwriting; Due Diligence B-14
Section 3.8 Restrictions on Public Sale; Inconsistent
Agreements B-15
Section 3.9 Indemnification and Contribution B-15
ARTICLE IV TERM AND EFFECTIVENESS OF AGREEMENT B-19
Section 4.1 Effectiveness of Agreement B-19
Section 4.2 Term of Agreement B-19
Section 4.3 Certain Provisions Regarding Termination B-19
ARTICLE V ELECTION OF DIRECTORS B-22
Section 5.1 B-22
ARTICLE VI GENERAL B-22
Section 6.1 Specific Enforcement; Other Remedies B-22
Section 6.2 Severability B-23
Section 6.3 Definitions B-23
Section 6.4 Amendment and Modifications B-23
Section 6.5 Descriptive Headings B-23
Section 6.6 Counterparts B-23
Section 6.7 Successors and Assigns B-23
Section 6.8 Accounting Matters B-24
Section 6.9 Notices B-24
Section 6.10 Governing Law B-25
SIGNATURES B-25
</TABLE>
i<PAGE>
<PAGE> 3
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT, dated as of January 10, 1994 (the
"Agreement"), between Cooper Industries, Inc., an Ohio corporation
("Cooper"), and Wyman-Gordon Company, a Massachusetts corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of
this Agreement, Cooper and the Company are entering into the Stock
Purchase Agreement, dated as of the date hereof (the "Acquisition
Agreement"); and
WHEREAS, the Acquisition Agreement provides, among other
things, for the sale by Cooper of all of the outstanding shares of
stock of Cameron Forged Products Company to the Company (the "Sale
Transaction"); and
WHEREAS, pursuant to the Acquisition Agreement, as
consideration for the sale of the stock of Cameron Forged Products
Company, Cooper will receive $5 million, payable as provided in the
Acquisition Agreement, and 16,500,000 shares (the "Shares") of
common stock, par value $1.00 per share, of the Company (the
"Company Common Stock"); and
WHEREAS, the Shares will represent approximately 48% of the
total number of shares of Company Common Stock that will be
outstanding following consummation of the Sale Transaction; and
WHEREAS, Cooper and the Company wish to provide certain
arrangements with respect to their relationship following
consummation of the Sale Transaction and each of them requires that
the other enter into this Agreement as an inducement to its
entering into the Acquisition Agreement.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
CERTAIN COVENANTS
Section 1.1 Restrictions on Resale or Other Dispositions. So
long as this Agreement remains in effect, Cooper covenants and
agrees that it will not sell, transfer any beneficial interest in,
pledge, hypothecate or otherwise dispose of or encumber any Company
Voting Securities (as hereinafter defined); provided, that Cooper
or any of its wholly-owned subsidiaries which hold Company Voting
Securities may sell, transfer, pledge, hypothecate or otherwise
dispose of or encumber Company Voting Securities:
(a) to any direct or indirect wholly-owned subsidiary of
Cooper which agrees to be bound by this Agreement; provided, that
such subsidiary shall remain a direct or indirect wholly-owned
subsidiary of Cooper for so long as it holds any Company Voting
Securities or any beneficial interest therein; or
B-1<PAGE>
<PAGE> 4
(b) pursuant to a bona fide underwritten offering or other
distribution of such Company Voting Securities registered under the
Securities Act of 1933, as amended (the "Securities Act"); or
(c) pursuant to a bona fide underwritten offering or other
distribution of securities of Cooper convertible into or
exercisable or exchangeable for Company Voting Securities
registered under the Securities Act; or
(d) pursuant to Rule 144 of the General Rules and Regulations
under the Securities Act, or any successor rule of similar effect
("Rule 144"); provided, that Cooper shall notify the Company at
least two days prior to the date of entering any sale or transfer
order or agreement with respect to Company Voting Securities
pursuant to Rule 144; provided, further that, if the Company shall
thereupon notify Cooper of the pendency of a sale under any public
offering by it of Company Common Stock or any other Company Voting
Securities, neither Cooper nor any of its affiliates shall effect
any sales under Rule 144 within 10 days prior to the commencement
of or during such offering; or
(e) pursuant to a tender offer or exchange offer if the Board
of Directors of the Company has (i) recommended that shareholders
of the Company accept such offer and such recommendation has not
been withdrawn or (ii) expressed no opinion and remains neutral
toward such offer; or
(f) pursuant to a merger or consolidation in which the Company
is acquired, or a sale of all or substantially all of the Company's
assets to another corporation or any other transaction approved by
the Board of Directors of the Company.
For purposes of this Agreement, "Company Voting Securities"
shall mean (i) the Company Common Stock, (ii) any other Company
securities entitled to vote generally for the election of directors
of the Company, or (iii) any securities of the Company convertible
into or exchangeable for or exercisable for Company Common Stock or
any other Company securities entitled to vote generally for the
election of directors of the Company.
Section 1.2 Distribution of Shares. In any transaction or
transactions described in Section 1.1(b), 1.1(c) or 1.1(d), the
seller of Company Voting Securities or securities of Cooper
convertible into or exercisable or exchangeable for Company Voting
Securities will use its reasonable best efforts to effect the sale
or transfer of such securities in a manner which will effect the
broadest possible distribution and such seller of Company Voting
Securities will use its reasonable best efforts to make no sales or
transfers of such Company Voting Securities to any one person or
group within the meaning of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), who or which after such transfer
shall own Company Voting Securities representing more than 4% of
the voting power for the election of directors represented by all
of the then-outstanding Company Voting Securities (whether directly
or indirectly). Such seller shall use its reasonable best efforts
to cause any underwriters with respect to any transaction or
transactions described in Section 1.1(b) or 1.1(c) to comply with
the distribution restrictions set forth in the preceding sentence.
B-2<PAGE>
<PAGE> 5
Section 1.3 Undertaking to File Reports and Cooperate in Rule
144 Transactions. The Company shall file, on a timely basis, all
annual, quarterly and other reports required to be filed under
Sections 13 and 15(d) of the Exchange Act, and the Rules and
Regulations of the Securities and Exchange Commission (the
"Commission") promulgated thereunder, as amended from time to time.
In the event of any proposed sale of Company Voting Securities by
Cooper or its affiliates pursuant to Section 1.1(d) above, the
Company shall cooperate with Cooper so as to enable such sales to
be made in accordance with applicable laws, rules and regulations,
the requirements of the Company's transfer agent, and the
reasonable requirements of the broker, if any, through which the
sales are proposed to be executed, and shall, upon request, furnish
unlegended certificates representing Company Voting Securities in
such numbers and denominations as Cooper shall reasonably require
for delivery pursuant to such sales.
Section 1.4 Delivery of Financial Statements. The Company
will deliver to Cooper:
(a) the quarterly consolidated financial statements of the
Company, including any notes thereto, for the first three quarterly
periods of each fiscal year, as soon as available but no later than
the date such quarterly financial information is filed with the
Commission;
(b) the audited year-end consolidated financial statements of
the Company, including any notes thereto and the report of the
Company's independent certified public accountants thereon, as soon
as available but no later than the date such audited financial
statements are filed with the Commission; and
(c) a written statement of the Consolidated Net Worth (as
hereinafter defined and calculated in accordance with Section
4.3(a)(iv) hereof) of the Company (the "Net Worth Statement") each
time that financial statements are delivered to Cooper pursuant to
Section 1.4(a) or 1.4(b). The principal financial officer of the
Company shall certify that the Net Worth Statement was prepared by
him or under his direction and that it shows the Consolidated Net
Worth of the Company as of immediately following the consummation
of the Sale Transaction and the Consolidated Net Worth of the
Company as of the end of the most recent fiscal quarter or fiscal
year, as the case may be, based on the financial statements of the
Company then being delivered to Cooper.
Section 1.5 Amendments to the Company's Articles of
Organization and By-Laws. The Company shall not amend, alter or
otherwise modify (i) Article 6 of the Company's Articles of
Organization in any manner which adversely affects Cooper or any
other person to whom any of the Shares have been transferred in
accordance with the terms of this Agreement; (ii) Article VI,
Section 14 of the Company's By-Laws pursuant to which the Company
shall have opted-out of Chapter 110D of the Massachusetts General
Laws; and (iii) the Amended and Restated Rights Agreement in the
form attached as an Annex to the Acquisition Agreement (the
"Amended and Restated Rights Agreement") and the Company shall not
adopt any other rights or similar agreement; provided, however,
B-3<PAGE>
<PAGE> 6
following prior consultation with Cooper, the Company may amend the
Amended and Restated Rights Agreement in accordance with the terms
thereof provided such amendment does not adversely affect Cooper or
any other person to whom any of the Shares have been transferred in
accordance with the terms of this Agreement.
ARTICLE II
VOTING, OWNERSHIP AND OTHER RESTRICTIONS
Section 2.1 Obligation to be Counted for Quorum. Cooper
agrees to cause all Company Voting Securities beneficially owned by
it or any wholly-owned subsidiary to which it has transferred any
Company Voting Securities, and agrees to use reasonable efforts to
cause all Company Voting Securities known by Cooper to be
beneficially owned by "affiliates" (as defined in Rule 12b-2
promulgated under the Exchange Act) of Cooper over which Cooper has
control, to be present at all shareholder meetings of the Company
at which the vote of common shareholders is sought so that they may
be counted for the purpose of determining the presence of a quorum
at such meetings.
Section 2.2 Voting by Cooper. Cooper agrees to vote or cause
to be voted all Company Voting Securities beneficially owned by it
or any wholly-owned subsidiary to which it has transferred any
Company Voting Securities, and agrees to use reasonable efforts to
cause to be voted all Company Voting Securities known by Cooper to
be beneficially owned by its affiliates over which it has control
on all matters (including the election of directors) either in the
manner recommended to shareholders by the Board of Directors of the
Company, or, at Cooper's election, in the same proportion as the
vote of the other shareholders of the Company. Notwithstanding the
foregoing, Cooper, such wholly-owned subsidiaries of Cooper and
such affiliates of Cooper over which it has control will not be
obligated to vote as provided in this Section 2.2 if the matter
being voted on by the shareholders of the Company would, if
approved, result in a breach of this Agreement.
Section 2.3 Cooper Standstill Agreements. So long as this
Agreement remains in effect, Cooper and its controlled affiliates
shall not, directly or indirectly, acting alone or in concert with
others, unless specifically requested or approved in advance by the
Board of Directors of the Company:
(a) in any manner acquire or agree, attempt, seek or propose
to acquire (or make any request for permission with respect
thereto), by purchase, merger, through the acquisition of control
of another person, by joining a partnership, limited partnership,
syndicate or other "group" (within the meaning of Section 13(d)(3)
of the Exchange Act), or otherwise, ownership (including, but not
limited to, beneficial ownership as defined in Rule 13d-3 under the
Exchange Act) of any of the assets or businesses of the Company or
any securities issued by the Company (the "Company Securities"), or
any rights or options to acquire such ownership (including from a
third party), except (i) as expressly permitted by this Agreement
or the Acquisition Agreement, or (ii) pursuant to customary
business transactions in the ordinary course of the Company's and
Cooper's business, or (iii) in the case of Company Securities, in
B-4<PAGE>
<PAGE> 7
connection with (A) a stock split or reverse stock split or other
reclassification affecting outstanding Company Securities, or (B) a
stock dividend or other pro rata distribution by the Company to
holders of outstanding Company Securities;
(b) make or cause to be made any proposal for the acquisition
of the Company or any assets or businesses of the Company or
Company Securities or for any other extraordinary transaction
involving the Company, including, without limitation, any merger,
or other business combination, restructuring, recapitalization,
liquidation or similar transaction, except (i) as expressly
permitted by this Agreement or the Acquisition Agreement or (ii)
proposals pursuant to customary business transactions in the
ordinary course of the Company's and Cooper's business;
(c) form, join or in any way participate in a "group" (within
the meaning of Section 13(d)(3) of the Exchange Act) with respect
to any Company Securities;
(d) make, or in any way cause or participate in, any
"solicitation" of "proxies" to vote (as such terms are defined in
Regulation 14A under the Exchange Act) with respect to the Company,
or communicate with, seek to advise, encourage or influence any
person or entity, in any manner, with respect to the voting of, any
Company Securities, or become a "participant" in any "election
contest" (as such terms are defined or used in Rule 14a-11 under
the Exchange Act) with respect to the Company, or execute any
written consent with respect to the Company;
(e) initiate, propose or otherwise solicit shareholders for
the approval of one or more shareholder proposals with respect to
the Company or induce or attempt to induce any other person to
initiate any shareholder proposal, or (except as expressly
permitted by this Agreement) seek election to or seek to place a
representative on the Board of Directors of the Company or seek the
removal of any member of the Board of Directors of the Company;
(f) in any manner, agree, attempt, seek or propose (or make
any request for permission with respect thereto) to deposit any
Company Securities, directly or indirectly, in any voting trust or
similar arrangement or to subject any Company Voting Securities to
any other voting or proxy agreement, arrangement or understanding;
(g) disclose any intention, plan or arrangement, or make any
public announcement (or request permission to make any such
announcement), or induce any third party to take any action,
inconsistent with the foregoing;
(h) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing; or
(i) advise, assist or encourage or finance (or assist or
arrange financing to or for) any other person in connection with
any of the foregoing.
B-5<PAGE>
<PAGE> 8
Section 2.4 Legend and Stop Transfer Order. To assist in
effectuating the provisions of this Agreement, Cooper hereby
consents:
(a) to the placement, if appropriate, of the following legend
on all certificates representing the Company Voting Securities
beneficially owned by it until such shares have been sold,
transferred or disposed of:
The securities represented by this certificate are subject to
the provisions of an Agreement between Cooper Industries, Inc.
and the issuer of such securities, and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of
except in accordance therewith. A copy of such Agreement is on
file at the office of the clerk of the issuer.
(b) to the entry of a stop transfer order with the transfer
agent or agents of Company Voting Securities against the transfer
of the Company Voting Securities held by Cooper except in
compliance with the requirements of this Agreement, or if the
Company is its own transfer agent with respect to any Company
Voting Securities, to the refusal by the Company to transfer any
such securities except in compliance with the requirements of this
Agreement.
ARTICLE III
REGISTRATION RIGHTS
Section 3.1 Certain Definitions. As used in this Article III
the following capitalized terms shall have the following meanings:
(a) "Holder" means Cooper and any permitted transferee
pursuant to Section 1.1(a).
(b) "Registrable Securities" means the Shares and any
securities issued in respect of or in exchange for any of the
Shares, including, without limitation, by way of any stock split or
reverse stock split or other reclassification or any stock dividend
or other pro rata distribution; provided, that any such Shares or
other securities shall not be Registrable Securities with respect
to a proposed offer or sale thereof when a registration statement
with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have
been disposed of in accordance with the plan of distribution set
forth in such registration statement.
(c) "Registration Expenses" means all expenses in connection
with any registration of securities pursuant to this Agreement
including, without limitation, the following: (i) the reasonable
fees, disbursements and expenses of the Company's and Cooper's
counsel(s) (United States and foreign) and accountants in
connection with the registration of the Registrable Securities to
be disposed of under the Securities Act; (ii) all expenses in
connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final
prospectus, any other offering document and amendments and
supplements thereto and the mailing and delivering of copies
B-6<PAGE>
<PAGE> 9
thereof to any underwriters and dealers; (iii) the cost of printing
or producing any agreement(s) among underwriters, underwriting
agreement(s), and blue sky or legal investment memoranda, any
selling agreements and any other documents in connection with the
offering, sale or delivery of the Registrable Securities to be
disposed of; (iv) all expenses in connection with the qualification
of the Registrable Securities to be disposed of for offering and
sale under state securities laws, including the reasonable fees and
disbursements of counsel for the Holders of Registrable Securities
in connection with such qualification and in connection with any
blue sky and legal investment surveys; (v) the filing fees incident
to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the
Registrable Securities to be disposed of; (vi) transfer agents',
depositaries' and registrars' fees and the fees of any other agent
appointed in connection with such offering; (vii) all security
engraving and security printing expenses; and (viii) all fees and
expenses payable in connection with the listing of the Registrable
Securities on each securities exchange or inter-dealer quotation
system on which any class of Company Voting Securities is then
listed.
Section 3.2 Demand Registration. (a) Upon written notice
from a Holder of Registrable Securities in the manner set forth in
Section 6.9 hereof requesting that the Company effect the
registration under the Securities Act of any or all of the
Registrable Securities held by such Holder, which notice shall
state that the Holder has a bona fide intent to dispose of such
Registrable Securities and shall specify the intended method or
methods of disposition, the Company will use its reasonable best
efforts to effect (at the earliest possible date) the registration
under the Securities Act of such Registrable Securities for
disposition in accordance with the intended method or methods of
disposition stated in such request (but not including any offering
on a delayed or continuous basis pursuant to Rule 415 (or any
successor rule to similar effect) promulgated under the Securities
Act); provided, that:
(i) if, upon receipt of a registration request pursuant
to this Section 3.2(a), the Company and the Holder(s)
requesting registration are advised by a nationally recognized
investment banking firm selected by the Company that, in such
firm's opinion, a registration at the time and on the terms
requested would materially and adversely affect any
immediately planned underwritten public offering by the
Company of its equity securities or debt securities which are
convertible into equity securities of the Company, which
offering had been contemplated by the Company prior to receipt
of notice requesting registration pursuant to this Section
3.2(a) (a "Transaction Blackout"), the Company, upon giving
written notice of a Transaction Blackout to such Holder(s),
shall not be required to effect a registration pursuant to
this Section 3.2(a) until the earliest of (A) the abandonment
of such financing, (B) 90 days after the completion of such
financing, (C) the termination of any "hold back" period
obtained by the underwriter(s) from any person in connection
with such financing, and (D) 60 days after receipt by the
Holder(s) of written notice from the Company of such
B-7<PAGE>
<PAGE> 10
Transaction Blackout if by such 60th day the Company shall not
have filed a registration statement relating to such
financing with the Commission;
(ii) if, while a registration request is pending pursuant to
this Section 3.2(a), the general counsel of the Company has
determined in good faith that (A) the filing of a registration
statement would require the disclosure of material information
which the Company has a bona fide business purpose for
preserving as confidential or (B) the Company is unable to
comply with the Commission's registration requirements, the
Company, upon giving written notice of any such event to the
Holder(s) requesting registration, shall not be required to
effect a registration pursuant to this Section 3.2(a) until
the earlier of (1) the date upon which such material
information is disclosed to the public or ceases to be
material or the Company is able to so comply with the
Commission's requirements, as the case may be, and (2) 30 days
after the general counsel of the Company makes such good faith
determination; and
(iii) a Holder shall have the right to exercise
registration rights pursuant to this Section 3.2 an unlimited
number of times; provided, each demand will be subject to the
following conditions: (A) each registration will include a
minimum of 10% of the Company Voting Securities initially
issued to Cooper in the Sale Transaction (except that this
minimum condition will not be applicable to the Holders' last
demand to sell all remaining Registrable Securities held by
the Holders); and (B) the Holders will not demand more than
two registrations in any twelve-month period and there will be
at least 120 days between the effective date of a prior
registration statement of the Company and the Holders' demand
for a subsequent registration.
(b) Notwithstanding any other provision of this Agreement to
the contrary, a registration requested by a Holder of Registrable
Securities pursuant to this Section 3.2 shall not be deemed to have
been effected (and, therefore, not requested for purposes of
subsection 3.2(a)), (i) if it is not declared effective by order of
the Commission for any reason other than a misrepresentation or an
omission by such Holder, (ii) if after it has become effective such
registration is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental
agency or court for any reason other than a misrepresentation or an
omission by such Holder and, as a result thereof, the Registrable
Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth
in the related registration statement, or (iii) if the conditions
to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not
satisfied or waived other than by reason of some act or omission by
such Holder.
(c) Notwithstanding clause (i) of subsection 3.2(a), the
Company may not impose a Transaction Blackout during any offering
of Registrable Securities requested by a Holder pursuant to this
Section 3.2.
B-8<PAGE>
<PAGE> 11
(d) In the event that any registration pursuant to this
Section 3.2 shall involve, in whole or in part, an underwritten
offering, (i) the Company shall have the right to designate one
nationally recognized investment banking firm, reasonably
satisfactory to Cooper and the Holder(s) requesting registration,
as the lead managing underwriter of such underwritten offering,
(ii) the Holder(s) requesting registration shall have the right to
designate one nationally recognized investment banking firm,
reasonably satisfactory to the Company, as co-managing underwriter
of such underwritten offering and (iii) any other co-managing
underwriters of such underwritten offering shall be designated
jointly by the Company and the Holder(s) requesting registration.
(e) The Company shall have the right to cause the registration
of additional securities for sale for the account of any person in
any registration of Registrable Securities requested by a Holder
pursuant to this Section 3.2; provided, that the Company shall not
have the right to cause the registration of such additional
securities if such Holder and the Company are advised by a
nationally recognized investment banking firm selected by such
Holder that, in such firm's opinion, registration of such
additional securities would materially and adversely affect the
offering and sale of the Registrable Securities then contemplated
by such Holder. In the event that any such registration shall
involve, in whole or in part, an underwritten offering, the Holder
may require that any such additional securities be included in the
offering proposed by such Holder on the same terms and conditions
as the Registrable Securities are included therein.
Section 3.3 Piggyback Registration. If the Company at any
time proposes to register any of its Common Stock or any other of
its common equity securities (collectively, "Other Securities")
under the Securities Act (other than a registration on Form S-4 or
S-8 or any successor or similar forms), whether or not for sale for
its own account, in a manner which would permit registration of
Registrable Securities for sale to the public under the Securities
Act, it will give prompt written notice to the Holders of its
intention to do so and of the rights of the Holders under this
Section 3.3 at least 45 days (or, in the case of a registration on
Form S-3 or any successor or similar form, 10 days) prior to the
anticipated filing date of the registration statement relating to
such registration (such notice shall also specify the anticipated
filing date of such registration statement). Upon the written
request of any Holder made within 15 days (or, in the case of a
registration on Form S-3 or any successor or similar form, 5 days)
after the receipt of the Company's notice (which request shall
specify the number of Registrable Securities intended to be
disposed of and the intended method of disposition thereof), the
Company will use its reasonable best efforts to effect, in
connection with such registration of the Other Securities, the
registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register, to the extent
required to permit the disposition (in accordance with such
intended methods thereof) of the Registrable Securities so
requested to be registered; provided, that:
B-9<PAGE>
<PAGE> 12
(a) if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the
effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason
not to register the Other Securities, the Company may, at its
election, give written notice of such determination to the Holders
and thereupon the Company shall be relieved of its obligation to
register such Registrable Securities in connection with the
registration of such Other Securities (but not from its obligation
to pay Registration Expenses to the extent incurred in connection
therewith as provided in Section 3.4 hereof), without prejudice,
however, to the rights of the Holders immediately to request that
such registration be effected as a registration under Section 3.2
hereof;
(b) (i) if the registration referred to in the first sentence
of this Section 3.3 is to be an underwritten primary registration
on behalf of the Company, and the managing underwriter(s) advise(s)
the Company in writing that in their good faith opinion such
offering would be materially and adversely affected by the
inclusion therein of the Registrable Securities requested to be
included therein, the Company shall include in such registration:
(1) first, all securities the Company proposes to sell for its own
account ("Company Registrable Securities"), (2) second, up to the
full number of Registrable Securities held by the Holders and
requested to be included in such registration in excess of the
number or amount of Company Registrable Securities which, in the
good faith opinion of such underwriter(s), can be sold without
materially and adversely affecting such offering, and (3) third,
the number or amount of other securities, if any, requested to be
included therein in excess of the number or amount of Company
Registrable Securities and such Registrable Securities which, in
the opinion of such underwriter(s), can be sold without materially
and adversely affecting such offering; and (ii) if the registration
referred to in the first sentence of this Section 3.3 is to be an
underwritten secondary registration on behalf of holders of
securities(other than Registrable Securities) of the Company (the
"Other Holders"), and the managing underwriter(s) advise(s) the
Company in writing that in their good faith opinion such offering
would be materially and adversely affected by the inclusion therein
of the Registrable Securities requested to be included therein, the
Company shall include in such registration: (1) first, all
securities the Other Holders propose to sell for their own account
(the "Secondary Securities") and (2) second, up to the full number
of Registrable Securities held by Holders and requested to be
included in such registration in excess of the number or amount of
Secondary Securities which, in the good faith opinion of such
underwriter(s), can be sold without materially and adversely
affecting such offering and (3) third, the number or amount of
other securities, if any, requested to be included therein in
excess of the number or amount of Secondary Securities and such
Registrable Securities which, in the good faith opinion of such
underwriter(s), can be sold without materially and adversely
affecting such offering; and
B-10<PAGE>
<PAGE> 13
(c) no registration of Registrable Securities effected under
this Section 3.3 shall relieve the Company of its obligation to
effect a registration of Registrable Securities pursuant to Section
3.2 hereof.
Section 3.4 Expenses. The Company will pay all Registration
Expenses in connection with each registration of Registrable
Securities pursuant to this Agreement, except that after the third
demand registration pursuant to Section 3.2, the Holders will pay
all Registration Expenses in connection with each demand
registration of Registrable Securities held by the Holders. The
Holders shall pay all underwriting discounts or commissions or
transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by the Holders.
Section 3.5 Registration and Qualification. If and whenever
the Company is required to use its reasonable best efforts to
effect the registration of any Registrable Securities under the
Securities Act as provided in Section 3.2 or 3.3 hereof, the
Company will as promptly as is practicable:
(a) prepare, file and use its reasonable best efforts to cause
to become effective a registration statement under the Securities
Act relating to the Registrable Securities to be offered;
(b) prepare and file with the 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 and to comply with the provisions
of the Securities Act with respect to the disposition of all
Registrable Securities until the earlier of (A) such time as all of
such Registrable Securities have been disposed of in accordance
with the intended methods of disposition set forth in such
registration statement and (B) the expiration of 90 days after such
registration statement becomes effective; provided, that such
90-day period shall be extended for such number of days that equals
the number of days elapsing from (x) the date the written notice
contemplated by Section 3.5(f) hereof is given by the Company to
(y) the date on which the Company delivers to the Holders the
supplement or amendment contemplated by Section 3.5(f) hereof; and
provided, further, if such registration is in connection with an
offering by the Holders, pursuant to Section 3.6 hereof, such
registration statement shall be kept effective until the earlier of
(A) above or (B) the expiration of the exercise, exchange or
conversion period;
(c) furnish to the Holders and to any underwriter of such
Registrable Securities such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus),
in conformity with the requirements of the Securities Act, such
documents incorporated by reference in such registration statement
or prospectus, and such other documents, as the Holders or such
underwriter may reasonably request, and a copy of any and all
B-11<PAGE>
<PAGE> 14
transmittal letters or other correspondence to, or received from,
the Commission or any other governmental agency or self-regulatory
body or other body having jurisdiction (including any domestic or
foreign securities exchange) relating to such offering;
(d) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under
the securities or blue sky laws of such jurisdictions (domestic or
foreign) as the Holders or any underwriter of such Registrable
Securities shall reasonably request, and use its reasonable best
efforts to obtain all appropriate registrations, permits and
consents required in connection therewith, and do any and all other
acts and things which may be necessary or advisable to enable the
Holders or any such underwriter to consummate the disposition in
such jurisdictions of its Registrable Securities covered by such
registration statement; provided, that the Company shall not for
any such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction wherein it is not so
qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any
such jurisdiction; provided, further, that, in the case of any such
registration or qualification in any non-United States
jurisdiction, (i) the Company shall have no obligation to use its
reasonable best efforts to so register or qualify Registrable
Securities if in the good faith opinion of the general counsel of
the Company such registration or qualification shall impose on the
Company an on-going material compliance obligation and (ii) the
Company shall not be obligated to keep any such registration or
qualification in effect except for so long as is necessary or
appropriate in order to dispose of Registrable Securities in such
jurisdiction;
(e) furnish to the Holders included in such registration (i)
on the date that the Registrable Securities are delivered to any
underwriters for sale pursuant to such registration statement, an
opinion of counsel representing the Company dated as of such date
for the purposes of such registration, addressed to the
underwriters and to the Holders, stating that such registration
statement has become effective under the Securities Act and that
(A) to the best knowledge of such counsel, no stop order suspending
the effectiveness hereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated
under the Securities Act, (B) the registration statement, the
related prospectus, and each amendment or supplement thereof,
comply as to form in all material respects with the requirements of
the Securities Act and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to
the financial statements or any other financial or statistical data
or any engineering report contained or incorporated therein) and
(C) to such other effects as may reasonably be requested by counsel
for the underwriters or by the Holders or their counsel, and (ii)
on the effective date of the registration statement, the date that
the Registrable Securities are delivered to any underwriters for
sale pursuant to such registration statement and on the effective
date of each post-effective amendment to the registration
B-12<PAGE>
<PAGE> 15
statement, a "comfort" letter dated such date from the regular
independent public accountants retained by the Company, addressed
to the underwriters and to the Holders registering Registrable
Securities thereunder, stating that they are independent public
accountants within the meaning of the Securities Act and that, in
the opinion of such accountants, the financial statements of the
Company included or incorporated by reference in the registration
statement or the prospectus, or any amendment or supplement
thereto, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
published rules and regulations thereunder, and such letter shall
additionally cover such other financial matters (including
information as to the period ending no more than five business days
prior to the date of such letter) included in the registration
statement in respect of which such letter is being given as the
underwriters or the Holders registering Registrable Securities
thereunder may reasonably request;
(f) immediately notify the Holders in writing (i) at any time
when a prospectus relating to a registration pursuant to Section
3.2 or 3.3 hereof is required to be delivered under the Securities
Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (ii) of any request by
the Commission or any other regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration
statement or other document relating to such offering, and in
either such case (i) or (ii) at the request of any Holder prepare
and furnish to such Holder a reasonable number of copies of an
amendment of or a supplement to such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made,
not misleading;
(g) if requested by the underwriters of any underwritten
offering of Registrable Securities, use its reasonable best efforts
to list all such Registrable Securities covered by such
registration on each securities exchange and inter-dealer quotation
system (in each case, domestic or foreign) on which a class of
Company Voting Securities is then listed, and use its reasonable
best efforts to obtain all appropriate registrations, permits and
consents required in connection therewith, and do any and all other
acts and things which may be necessary or advisable to effect such
listing; and
(h) furnish unlegended certificates representing ownership of
the Registrable Securities being sold in such denominations as
shall be requested by the Holders registering Registrable
Securities thereunder or the underwriters.
B-13<PAGE>
<PAGE> 16
Section 3.6 Conversion of Other Securities, etc. If Cooper
offers any options, rights, warrants or other securities issued by
it that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable
Securities underlying such options, rights, warrants or other
securities shall be eligible for registration pursuant to Section
3.2 and Section 3.3 of this Agreement.
Section 3.7 Underwriting; Due Diligence. (a) If requested by
the underwriters for any underwritten offering of Registrable
Securities pursuant to a registration requested under this
Agreement, the Company will enter into an underwriting agreement
with such underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other
terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution substantially to
the effect and to the extent provided in Section 3.9 hereof and the
provision of opinions of counsel and accountants' letters to the
effect and to the extent provided in Section 3.5(e) hereof. The
representations and warranties in such underwriting agreement by,
and the other agreements on the part of, the Company to and for the
benefit of such underwriters, shall also be made to and for the
benefit of the Holders on whose behalf the Registrable Securities
are to be distributed by such underwriters.
(b) In the event that any registration pursuant to Section 3.3
shall involve, in whole or in part, an underwritten offering, the
Company may require the Registrable Securities requested to be
registered pursuant to Section 3.3 to be included in such
underwriting on the same terms and conditions as shall be
applicable to the other securities being sold through underwriters
under such registration. If requested by the underwriters for any
underwritten offering requested under this Agreement, the Holders
on whose behalf the Registrable Securities are to be distributed by
such underwriters will enter into an underwriting agreement with
such underwriters, such agreement to contain such representations
and warranties by such Holders and such other terms and provisions
as are customarily contained in underwriting agreements with
respect to secondary distributions, including, without limitation,
indemnities and contribution substantially to the effect and to the
extent provided in Section 3.9 thereof. The representations and
warranties in such underwriting agreement by, and the other
agreements on the part of, such Holders to and for the benefit of
such underwriters, shall also be made to and for the benefit of the
Company.
(c) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the
Securities Act, the Company will give the Holders of such
Registrable Securities and the underwriters, if any, and their
respective counsel and accountants, such reasonable and customary
access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent
public accountants who have certified the Company's financial
statements as shall be necessary, in the reasonable opinion of such
B-14<PAGE>
<PAGE> 17
Holders and such underwriters or their respective counsel, to
conduct a reasonable investigation within the meaning of the
Securities Act.
Section 3.8 Restrictions on Public Sale; Inconsistent
Agreements. (a) If any registration of Registrable Securities
pursuant to Section 3.2 shall be in connection with an underwritten
public offering, the Company agrees and agrees to cause any
controlled affiliates of the Company not to effect any public sale
or distribution of any of its securities of the same class or
series as such Registrable Securities or any securities convertible
into or exchangeable or exercisable for any securities of the same
class or series as such Registrable Securities (other than any such
sale or distribution of such securities in connection with any
exchange offer, merger or consolidation by the Company or a
subsidiary of the Company or in connection with the purchase of all
or substantially all the assets of any other person or in
connection with an employee stock option plan, employee stock
ownership plan or other benefit plan) during the 30-day period
prior to, and during the 90-day period beginning on, the effective
date of such registration statement (except as part of such
registration), or for such shorter period acceptable to the
underwriters of such offering.
(b) The Company agrees that any agreement entered into after
the date of this Agreement pursuant to which the Company issues or
agrees to issue any equity securities or any securities convertible
into or ex changeable or exercisable for any equity securities of
the Company which will be privately placed shall contain (i) a
provision under which holders of such securities agree not to
effect any public sale or distribution of any such securities
during the period referred to in Section 3.8(a), including any sale
pursuant to Rule 144 under the Securities Act (except as part of
such registration, if permitted) and (ii) no terms or provisions
inconsistent with any term or provision of this Agreement.
Section 3.9 Indemnification and Contribution. (a) In the
case of each offering of Registrable Securities made pursuant to
this Agreement (whether pursuant to Section 3.2 or Section 3.3),
the Company agrees to indemnify and hold harmless the Holders of
Registrable Securities, its officers and directors, each
underwriter of Registrable Securities so offered and each person,
if any, who controls any of the foregoing persons within the
meaning of the Securities Act, from and against any and all claims,
liabilities, losses, damages, expenses and judgments, joint or
several, to which they or any of them may become subject, under the
Securities Act or otherwise, including any amount paid in
settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any reasonable
legal fees (including disbursements and related expenses) or other
reasonable out-of-pocket expenses incurred by them in connection
with investigating any claims and defending any actions, insofar as
such losses, claims, damages, liabilities or actions shall arise
out of, or shall be based upon, any untrue statement or alleged
untrue statement of a material fact contained in the registration
statement (or in any preliminary or final prospectus included
B-15<PAGE>
<PAGE> 18
therein), or any amendment thereof or supplement thereto, or in any
document incorporated by reference therein, or 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, or shall arise out of or be based upon any violation or
alleged violation by the Company of the Securities Act, any blue
sky laws, securities laws or other applicable laws of any state or
country in which the Registrable Securities are offered and
relating to action or inaction required of the Company in
connection with such offering; provided, that the Company shall not
be liable to any Holder of Registrable Securities in any such case
to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or
alleged untrue statement, or any omission, if such statement or
omission shall have been made in reliance upon and in conformity
with information relating to such Holder furnished to the Company
in writing by or on behalf of such Holder specifically for use in
the preparation of the registration statement (or in any
preliminary or final prospectus included therein), or any amendment
thereof or supplement thereto. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of the Holders of Registrable Securities and shall survive
the transfer of such securities. The foregoing indemnity agreement
is in addition to any liability which the Company may otherwise
have to the Holders of Registrable Securities, its officers and
directors, underwriters of the Registrable Securities, or any
controlling person of the foregoing; provided, further, that, in
the case of an offering with respect to which any Holder has
designated the lead managing underwriter(s), this indemnity does
not apply to any loss, liability, claim, damage or expense arising
out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission in any preliminary
prospectus if a copy of a prospectus was not sent or given by or on
behalf of an underwriter to such person asserting such loss, claim,
damage, liability or action at or prior to the written confirmation
of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been
corrected in such prospectus.
(b) In the case of each offering made pursuant to this
Agreement (whether pursuant to Section 3.2 or Section 3.3), each
Holder of Registrable Securities included in such offering, by
exercising its registration rights hereunder, agrees to indemnify
and hold harmless the Company, its officers and directors and each
person, if any, who controls any of the foregoing within the
meaning of the Securities Act (and if requested by the
underwriters, each underwriter who participates in the offering and
each person, if any, who controls any such underwriter within the
meaning of the Securities Act), from and against any and all
claims, liabilities, losses, damages, expenses and judgments, joint
or several, to which they or any of them may become subject, under
the Securities Act or otherwise, including any amount paid in
settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any reasonable
legal fees (including disbursements and related expenses) or other
B-16<PAGE>
<PAGE> 19
reasonable out-of-pocket expenses incurred by them in connection
with investigating any claims and defending any actions, insofar as
any such losses, claims, damages, liabilities or actions shall
arise out of, or shall be based upon, any untrue statement or
alleged untrue statement of a material fact contained in the
registration statement (or in any preliminary or final prospectus
included therein) or any amendment thereof or supplement thereto,
or 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, but in each case only to the
extent that such untrue statement of a material fact is contained
in, or such material fact is omitted from, information relating to
such Holder furnished in writing to the Company by or on behalf of
such Holder specifically for use in the preparation of such
registration statement (or any preliminary or final prospectus
included therein), or any amendment thereof or supplement thereto.
The foregoing indemnity is in addition to any liability which such
Holder may otherwise have to the Company, or any of its directors,
officers or controlling persons; provided, that, in the case of an
offering with respect to which the Company has designated the lead
managing underwriter(s), this indemnity does not apply to any loss,
liability, claim, damage or expense arising out of or based upon
any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus if a copy of a
prospectus was not sent or given by or on behalf of an underwriter
to such person asserting such loss, claim, damage, liability or
action at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act and such
untrue statement or omission had been corrected in such prospectus.
(c) Procedure for Indemnification. Each party indemnified
under paragraph (a) or (b) of this Section 3.9 shall, promptly
after receipt of notice of any claim or the commencement of any
action against such indemnified party in respect of which indemnity
may be sought, notify the indemnifying party in writing of the
claim or the commencement thereof; provided, that the failure to
notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party on account of
the indemnity agreement contained in paragraph (a) or (b) of this
Section 3.9, unless the indemnifying party was prejudiced by such
failure, and in no event shall relieve the indemnifying party from
any other liability which it may have to such indemnified party. If
any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 3.9
for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, that the indemnified
parties, shall have the right, as a group, to employ one law firm
as separate counsel to represent them if, in the reasonable
B-17<PAGE>
<PAGE> 20
judgment of the indemnified parties, it is advisable for them to be
represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the indemnifying
party. If the indemnified parties employ such separate counsel they
will not agree to any settlement of any such claim or action
without the prior written consent of the indemnifying party, such
consent not to be unreasonably withheld. If the indemnifying party
so assumes the defense thereof, it may not agree to any settlement
of any such claim or action as the result of which any remedy or
relief, other than monetary damages for which the indemnifying
party shall be responsible hereunder, shall be applied to or
against the indemnified parties, without the prior written consent
of the indemnified parties, such consent not to be unreasonably
withheld. If the indemnifying party does not assume the defense
thereof, it shall be bound by any settlement to which the
indemnified parties agree, irrespective of whether the indemnifying
party consents thereto. In any action hereunder as to which the
indemnifying party has assumed the defense thereof with counsel
satisfactory to the indemnified party, the indemnified party shall
continue to be entitled to participate in the defense thereof, with
counsel of its own choice, but, except as set forth above, the
indemnifying party shall not be obligated hereunder to reimburse
the indemnified party for the costs thereof.
If the indemnification provided for in this Section 3.9 shall
for any reason be unavailable to an indemnified party in respect of
any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of
such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the
relative fault of the indemnifying party on the one hand and the
indemnified party on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party on
the one hand or the indemnified party on the other, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission, but
not solely by reference to any indemnified party's stock ownership
in the Company. The amount paid or payable by an indemnified party
as a result of the loss, claim, damage or liability, or action in
respect thereof, referred to above in this paragraph shall be
deemed to include, for purposes of this paragraph, any reasonable
legal fees (including disbursements and related expenses) or other
reasonable out-of-pocket expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. No person guilty of fraudulent
misrepresentation (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.
B-18<PAGE>
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ARTICLE IV
TERM AND EFFECTIVENESS OF AGREEMENT
Section 4.1 Effectiveness of Agreement. This Agreement shall
be effective only upon consummation of the Sale Transaction
contemplated by the Acquisition Agreement. Neither party shall have
any obligation to the other pursuant to this Agreement until such
consummation has occurred, and this Agreement shall terminate
simultaneously with any termination of the Acquisition Agreement in
accordance with its terms.
Section 4.2 Term of Agreement. Except as otherwise provided
in Section 4.3, the respective covenants and agreements of Cooper
and the Company contained in Article I and Article II of this
Agreement will continue in full force and effect from the date of
effectiveness of this Agreement pursuant to Section 4.1 until the
earlier of (i) the tenth anniversary of such date, and (ii) the
first date on which Cooper beneficially owns less than 5% of the
outstanding Company Voting Securities.
Section 4.3 Certain Provisions Regarding Termination.
(a) The limitations on Cooper and its affiliates set forth in
Articles I and II will terminate immediately and be of no further
force and effect on the date that a "Trigger Event" shall have
occurred. For these purposes, "Trigger Event" shall mean the
occurrence of one or more of the following events, without Cooper's
prior written consent:
(i) in connection with the issuance of Company Voting
Securities (other than (x) issuances pursuant to the Company's
current employee benefit plans or other customary employee
benefit plans of the Company or (y) issuances in connection
with bona fide capital raising programs pursuant to which the
securities are sold for fair value, as approved by the Board
of Directors of the Company, and the proceeds of which are
invested in the businesses in which the Company or one or more
of its subsidiaries are then engaged or (z) issuances for fair
value, as determined by the Board of Directors of the Company,
in connection with acquisitions by the Company or one of its
wholly-owned subsidiaries primarily involving one or more
Similar Businesses (as hereinafter defined)) the failure to
provide Cooper with the right to purchase, at the same price
as the Company Voting Securities are being issued, that number
or amount of Company Voting Securities which would enable
Cooper to maintain its proportionate interest in the Company
following such issuance;
(ii) a "Change in Control" of the Company (as hereinafter
defined);
(iii) a material acquisition or investment by the Company
or one of its subsidiaries, other than an acquisition or
investment by the Company or one of its wholly-owned
subsidiaries primarily involving one or more Similar
Businesses;
B-19<PAGE>
<PAGE> 22
(iv) a decline of at least 35% in the "Consolidated Net
Worth" of the Company from the Consolidated Net Worth of the
Company immediately following the consummation of the Sale
Transaction after giving effect to the Sale Transaction
(including the issuance of the Shares to Cooper), but not
taking into account (A) any reduction in the Company's
Consolidated Net Worth attributable to or taken in connection
with or as a result of the Sale Transaction or the combination
of the business acquired from Cooper with the Company's
business and recorded in the Company's financial statements
for any period ending on (and including) the end of the first
full fiscal year of the Company after the consummation of the
Sale Transaction or (B) any adjustments following the date of
consummation of the Sale Transaction as a result of any
changes in generally accepted accounting principles ("GAAP")
(including the implementation of Statement of Financial
Accounting Standards ("SFAS") No. 106) or any other regulatory
changes or requirements applicable to the Company or its
financial statements or (C) any adjustment resulting from any
liability arising from or growing out of any matter or
circumstance existing as of the time of the consummation of
the Sale Transaction and relating to the business or assets
acquired by the Company from Cooper but not reflected on the
balance sheet of such business and assets or (D) any change in
the translation component of shareholders' equity or (E)
adjustments as a result of sales of the Company's accounts
receivables pursuant to a bona fide receivables securitization
program pursuant to which fair value is received for
receivables so sold (as determined by the Company's Board of
Directors, taking into account, among other things, any
discount or credit enhancement features required by any
securities rating agency) or (F) any adjustment resulting from
a SFAS No. 109 valuation allowance recorded or reserved by the
Company with respect to deferred tax assets that were included
in or excluded from the Company's final Accounting Practice
Bulletin No. 16 acquisition date balance sheet;
(v) any default or defaults by the Company or one of its
subsidiaries under any indebtedness of the Company or its
subsidiaries for money borrowed with a principal amount then
outstanding, individually or in the aggregate, in excess of $5
million, which default shall constitute a failure to pay any
portion of the principal of each indebtedness at final
maturity or shall have resulted in such indebtedness becoming
or being declared due and payable prior to the date on which
it would otherwise have become due and payable without such
indebtedness having been discharged, or such acceleration
having been rescinded or annulled within a period of 30 days
after maturity or acceleration;
(vi) an "Event of Bankruptcy" (as hereinafter defined);
or
(vii) the failure of the Board of Directors of the
Company to nominate at least two of Cooper's representatives
for election to the Company's Board of Directors.
B-20<PAGE>
<PAGE> 23
Notwithstanding clause (i) above, the Company may not issue
any securities having more than one vote per share (other than
pursuant to the Amended and Restated Rights Agreement) without
the prior written consent of Cooper.
(b) For purposes of this Section 4.3:
(i) A "Change in Control" shall mean a merger or
consolidation involving the Company or a sale of all or
substantially all of the assets of the Company, in each case
except for a transaction in which the Company's shareholders
receive at least 50% of the stock of the surviving, resulting
or acquiring corporation; the acquisition by an individual,
entity or group (excluding the Company or an employee benefit
plan of the Company or a corporation controlled by the
Company's shareholders) of shares of capital stock of the
Company entitled to cast a majority of the votes entitled to
be cast on matters submitted to the shareholders of the
Company; or a change in a majority of the members of any class
of the Company's Board of Directors in connection with an
"election contest" (as used in Rule 14a-11 under the Exchange
Act).
(ii) "Consolidated Net Worth" shall mean, as at any date
of determination, the consolidated shareholders' equity of the
Company and those of its subsidiaries that would be accounted
for as consolidated subsidiaries in the Company's financial
statements in accordance with GAAP (as in effect from time to
time), as determined on a consolidated basis in accordance
with GAAP (as in effect from time to time); provided, that the
Consolidated Net Worth of the Company immediately following
the consummation of the Sale Transaction shall include 60% of
the "LIFO reserve" as of that date, and thereafter for
purposes of calculating Consolidated Net Worth the earnings or
loss of the Company shall be computed utilizing the FIFO
(first-in, first-out) method of accounting for inventory.
(iii) An "Event of Bankruptcy" shall mean (A) the
commencement by the Company of a voluntary proceeding under
any applicable bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the
Company to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or the
admission by the Company in writing of its inability to pay
its debts generally as they become due; or (B) the entry by a
court having jurisdiction in the premises of (1) a decree or
order for relief in respect of the Company in an involuntary
case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or (2) a
decree or order adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or
B-21<PAGE>
<PAGE> 24
in respect of the Company under any applicable law, or
ordering the winding up or liquidation of the affairs of the
Company, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days.
(iv) "Similar Businesses" shall mean businesses in which
the Company or one or more of its subsidiaries are engaged and
any businesses involving products related to or complementary
to the products of the Company or one or more of its
subsidiaries or any similar businesses providing customers of
the Company or one or more of its subsidiaries with products
or services similar to those provided by the Company or one or
more of its subsidiaries.
ARTICLE V
ELECTION OF DIRECTORS
Section 5.1 (a) The Company agrees that it will use its best
efforts to cause two persons designated by Cooper and reasonably
acceptable to the Company to be elected to the Board of Directors
of the Company and to serve as directors of the Company until their
successors are duly elected and qualified. In the event that any
such designee shall cease to serve as a director for any reason,
the Company will use its best efforts to cause such vacancy
resulting thereby to be filled by a designee of Cooper reasonably
acceptable to the Company. In order to effect the purposes and
intent of this Section 5.1, the Company, among other things, shall
vote all shares for which the Company's management or Board of
Directors holds proxies or is otherwise entitled to vote in favor
of the election of the designees of Cooper except as may otherwise
be provided by shareholders submitting such proxies.
(b) The Company agrees that any designees of Cooper who are
elected to serve on the Company's Board of Directors shall be
furnished with all information generally provided to the Company's
Board of Directors and shall have access to information regarding
the Company on a basis equal to that of the other outside or its
inside directors. The Company agrees that Cooper's designees
serving on the Company's Board of Directors shall, in connection
with the performance of their duties as directors of the Company,
be (i) compensated at a level commensurate with the compensation of
the Company's other outside directors, (ii) reimbursed for all
out-of-pocket charges and expenses incurred, (iii) entitled to the
benefit of insurance policies of the Company which provide coverage
to its other outside directors and (iv) furnished with and entitled
to the same perquisites as the Company's other outside directors.
ARTICLE VI
GENERAL
Section 6.1 Specific Enforcement; Other Remedies.
(a) Cooper acknowledges and agrees that the Company would be
irreparably damaged in the event any of the provisions of this
Agreement were not performed by Cooper in accordance with their
specific terms or were otherwise breached. It is accordingly agreed
that the Company shall be entitled to an injunction or injunctions
B-22<PAGE>
<PAGE> 25
to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court
of the United States or any state thereof having jurisdiction, in
addition to any other remedy to which the Company may be entitled
at law or equity.
(b) The Company acknowledges and agrees that Cooper would be
irreparably damaged in the event any of the provisions of this
Agreement were not performed by the Company in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that Cooper shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof or seek
recovery of money damages in any court of the United States or any
state thereof having jurisdiction, in addition to any other remedy
to which Cooper may be entitled at law or equity.
Section 6.2 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remainder
of the terms, provisions, covenants and restrictions shall remain
in full force and effect and shall in no way be affected, impaired
or invalidated. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void
or unenforceable.
Section 6.3 Definitions. As used herein the term "affiliate"
shall have the meaning set forth in Rule 12b-2 under the Exchange
Act and the term "person" shall mean any individual, partnership,
joint venture, corporation, trust or other entity.
Section 6.4 Amendment and Modification. This Agreement may
be amended, modified or supplemented only by an agreement in
writing signed by both of the parties hereto.
Section 6.5 Descriptive Headings. Descriptive headings are
for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
Section 6.6 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
Section 6.7 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the
successors and permitted assigns of the parties hereto, but neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by either of the parties hereto without
the prior written consent of the other party. Notwithstanding the
foregoing, Cooper may assign its rights under this Agreement to any
of its direct or indirect wholly-owned subsidiaries as long as such
subsidiary remains a direct or indirect wholly-owned subsidiary of
Cooper, but no such assignment shall relieve Cooper of its
obligations hereunder.
B-23<PAGE>
<PAGE> 26
Section 6.8 Accounting Matters. The Company will furnish to
Cooper all information that is required by GAAP to enable Cooper to
account for its investment in the Company in whatever manner it
shall deem appropriate. To the extent reasonably requested by
Cooper, the Company will, and will cause its employees, independent
public accountants and other representatives to provide information
regarding the Company to, and otherwise cooperate with, Cooper so
as to enable Cooper to prepare financial statements in accordance
with generally accepted accounting principles and to comply with
its reporting requirements and other disclosure obligations under
applicable United States securities laws and regulations.
Section 6.9 Notices. All notices and other communications
provided for herein shall be validly given, made or served, if in
writing and delivered personally, sent by facsimile transmission
(receipt of which is confirmed) or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a
party as shall be specified by like notice; provided that notices
of a change of address shall be effective only upon receipt
thereof):
(i) if to Cooper or a Holder of Registrable Securities, to
Cooper Industries, Inc.
First City Tower, Suite 4000
1001 Fannin
Houston, Texas 77002
Attention: General Counsel
Telephone No.: (713) 739-5902
Facsimile No.: (713) 735-5882
(ii) if to the Company, to
Wyman-Gordon Company
224 Worcester Street
Box 8001
Grafton, Massachusetts 01536
Attention: Wallace F. Whitney, Jr.
Telephone No.: (508) 839-4441
Facsimile No.: (508) 839-7500
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich
Telephone No.: (212) 403-1000
Facsimile No.: (212) 403-2000
(iii) if to a Holder of Registrable Securities, to the name
and address as the same appear in the security transfer books
of the Company.
B-24<PAGE>
<PAGE> 27
Notice given by facsimile shall be deemed delivered on the business
day after it is sent to the recipient. Notice given by mail as set
out above shall be deemed delivered five calendar days after the
date the same is mailed.
Section 6.10 Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New York
without regard to any applicable principles of conflicts of law.
IN WITNESS WHEREOF, Cooper and the Company have caused this
Agreement to be duly executed by their respective officers, each of
whom is duly and validly authorized and empowered, all as of the
day and year first above written.
COOPER INDUSTRIES, INC.
By: /s/H. John Riley, Jr.
Name: H. John Riley, Jr.
Title: President and Chief
Operating Officer
WYMAN-GORDON COMPANY
By: /s/John M Nelson
Name: John M. Nelson
Title: Chairman and Chief
Executive Officer
B-25
<PAGE> 1
EXHIBIT 99.3
Wyman-Gordon Company
244 Worcester Street
Box 8001
North Grafton, MA 01536-8001
May 26, 1994
Cooper Industries
1001 Fannin
Suite 4000
Houston, Texas 77002
Ladies and Gentlemen:
Cooper Industries, Inc. ("Cooper") and Wyman-Gordon Company
(the "Company") have entered into an Investment Agreement, dated as
of January 10, 1994 (the "Agreement"). Cooper and the Company
desire to amend the Agreement in order to avoid the necessity of a
mid-week accounting close as of May 26, 1994 and thereby to
simplify the administration of the Agreement. Accordingly, in
consideration of the foregoing and the mutual covenants and
agreements herein contained, and intended to be legally bound
hereby, the parties hereto agree as follows:
1. Section 4.3(a)(iv) of the Agreement is hereby amended by
deleting the words "immediately following the consummation of the
Sale Transaction after giving effect to the Sale Transaction
(including the issuance of the Shares to Cooper") and substituting
therefor the words "as of May 28, 1994 adjusted to include the
effect of the Sale Transaction as of the consummation date of the
Sale Transaction (including the issuance of the Shares to Cooper)."
2. Section 4.3(a)(iv) of the Agreement is hereby further
amended by adding the following clause at the end thereof "but
taking into account any unusual material events or transactions
occurring on or after May 26, 1994 and on or before May 28, 1994."
3. As so amended, the Agreement is hereby ratified and
confirmed in all respects.
4. This Amendment shall be governed and construed in
accordance with the laws of the State of New York without regard to
any applicable principles of conflicts of law.
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<PAGE> 2
If the foregoing is acceptable to you, please sign the
enclosed copy of this letter and return it to us.
WYMAN-GORDON COMPANY
By /s/Luis E. Leon
Name: Luis E. Leon
Title: Vice President, Chief
Financial Officer and
Treasurer
Accepted and Agreed to:
COOPER INDUSTRIES, INC.
By /s/David A. White, Jr.
Name: David A. White, Jr.
Title: Vice President, Corp
Planning & Development
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<PAGE> 1
EXHIBIT 99.4
NEWS RELEASE
Wyman-Gordon Company
244 Worcester Street
Box 8001
North Grafton, Massachusetts 01536-8001
Contact: Luis E. Leon
Vice President
Chief Financial Officer
and Treasurer
Business 508-839-4441
MAY 24, 1994... WYMAN-GORDON COMPANY ANNOUNCED today that, at
a Special Meeting, its shareholders voted to approve the company's
acquisition of Cameron Forged Products Company, a subsidiary of
Cooper Industries, Inc. for 16.5 million new Wyman-Gordon shares of
common stock and $5 million cash payable in installments.
Management now expects to complete this acquisition before the end
of this week. As a result of the acquisition, Cooper will hold
approximately 48% of Wyman-Gordon's outstanding common stock.
Dewain K. Cross, Senior Vice President, Finance of Cooper, and H.
John Riley, Jr., President and Chief Operating Officer of Cooper,
have joined Wyman-Gordon's Board of Directors.
David P. Gruber, who assumed the duties of Chief Executive
Officer beginning with today's meeting, commented: "Consolidation
within the aerospace forging industry was imperative to bring
capacity more in balance with demand and, from resulting efficiency
improvements, to further reduce costs."
The Company also announced it has formulated plans for the
integration of the two companies' operations. These plans will
include the closure of duplicate facilities, reductions in
employment levels and adoption of the best manufacturing processes
at all locations. The Company will record a provision for the
costs of this integration plan of approximately $30 million and an
additional $15 million of non-recurring and mostly non-cash charges
relating to other events which occurred during the period. The
most significant of these other charges include $5 million
incidental to the closure of a casting facility and $5 million for
certain employee benefit related accruals and unamortized fees
relating to the termination of the former credit facility described
below.
Further, Wyman-Gordon announced today that it will change its
fiscal year from the traditional calendar year to a year which
begins June 1 and ends May 31. Accordingly, the Company will end a
five-month "short-1994 fiscal year" on May 31, 1994 and begin its
new fiscal year on June 1, 1994. Mr. Gruber stated: "This change
will enable us to conform our year to our customers' needs and will
facilitate a whole year of reporting our combined results." During
this short-1994 fiscal year, the Company will record the
acquisition and all charges discussed above.
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<PAGE> 2
Finally, the Company announced the completion of a new five-
year $65 million trade receivables securitization facility through
its wholly-owned, special-purpose subsidiary, Wyman-Gordon
Receivables Corporation. This facility is available for general
corporate purposes and replaces a $40 million revolving credit
agreement. This new facility, which received an AAA rating from
Standard & Poors, improves the Company's already strong liquidity.
The Company's current cash position approximates $25 million.
Wyman-Gordon is a leading manufacturer of high quality
technically advanced forgings, investment castings and composite
structures for the commercial transportation and defense equipment
industries.
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<PAGE> 1
EXHIBIT 99.5
SUPPLEMENTAL INDENTURE
This SUPPLEMENTAL INDENTURE, dated as of May 19, 1994, is
entered into by and among Wyman-Gordon Company, a Massachusetts
corporation (the "Issuer"), the Subsidiary Guarantors and State
Street Bank and Trust Company, a Massachusetts banking corporation,
as Trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed thereto
in the Indenture, dated as of March 16, 1993, by and among the
Issuer, the Subsidiary Guarantors and the Trustee (the
"Indenture").
W I T N E S S E T H :
WHEREAS, the Issuer has heretofore issued its 10 % Senior
Notes due 2003 (the "Securities") in the aggregate principal amount
of $90,000,000 pursuant to the Indenture;
WHEREAS, the Issuer has entered into a Stock Purchase
Agreement dated as of January 10, 1994 (the "Stock Purchase
Agreement") with Cooper Industries, Inc., an Ohio corporation
("Cooper"), providing for the acquisition by the Issuer from Cooper
(the "Acquisition") of all of the outstanding shares of common
stock, par value $.208 per share, of Cameron Forged Products
Company, a Delaware corporation ("Cameron"), for a purchase price
equal to (i) 16,500,000 shares of the Issuer's common stock, par
value $1.00 per share, and (ii) $5,000,000, payable, and subject to
adjustment, as provided in the Stock Purchase Agreement;
WHEREAS, the Issuer desires, on or prior to the completion of
the Acquisition, to replace certain of its existing working capital
financing arrangements by entering into a revolving, receivables-
backed credit facility through the establishment of a special-
purpose Subsidiary which would purchase the U.S. dollar-denominated
trade receivables of the Issuer and certain of its Subsidiaries on
a daily basis (the "Receivables Financing");
WHEREAS, the Issuer further desires, following the
Acquisition, to cause Cameron's wholly-owned United Kingdom
subsidiary to enter into certain working capital financing
arrangements (the "U.K. Financing");
WHEREAS, to complete the Acquisition, the Receivables
Financing and the U.K. Financing, certain existing provisions in
the Indenture must be amended;
WHEREAS, to amend such provisions a supplemental indenture to
the Indenture must be executed;
WHEREAS, to execute a supplemental indenture consents must be
obtained from Holders of not less than a majority in aggregate
principal amount of the Securities outstanding;
-15-<PAGE>
<PAGE> 2
WHEREAS, the Issuer has obtained sufficient consents from
Holders of the Securities to permit the execution of this
Supplemental Indenture to the Indenture, which in substance amends
certain provisions in the Indenture to permit the Acquisition, the
Receivables Financing and the U.K. Financing;
WHEREAS, this Supplemental Indenture shall, upon execution,
become an effective, valid, binding and legal instrument, in
accordance with its terms and for the purposes herein expressed;
WHEREAS, the Issuer has complied with the requirements of
Sections 9.02 and 9.04 of the Indenture with respect to the
execution of this Supplemental Indenture and Section 9.02 of the
Indenture permits the execution and delivery of this Supplemental
Indenture; and
WHEREAS, all acts and proceedings required by law and the
Restated Articles of Organization and By-laws of the Issuer to make
this Supplemental Indenture in the form hereof a valid, binding and
legal instrument have been done and performed, and the execution
and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the foregoing recitals and
for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, each party agrees as follows for
the benefit of the other parties and for the equal and ratable
benefit of the Holders of the Securities:
1. The Indenture is hereby amended as follows:
(a) Article One of the Indenture is hereby amended by adding
the following definitions to Section 1.01 immediately following the
definition of "Business Day":
"Cameron" means Cameron Forged Products Company, a
Delaware corporation.
"Cameron Acquisition" means the acquisition by the Issuer
of all of the outstanding shares of common stock, par value
$.208 per share, of Cameron from Cooper Industries, Inc., an
Ohio corporation ("Cooper"), pursuant to a Stock Purchase
Agreement and an Investment Agreement, each dated as of
January 10, 1994, by and between Cooper and the Issuer, as the
same may be amended or supplemented from time to time (the
"Cameron Acquisition Documents"), and the transactions
contemplated thereby, including without limitation the payment
of the consideration specified in the Cameron Acquisition
Documents and the adjustment of such consideration as provided
therein, certain leasing, supply and licensing arrangements by
and among Cooper and its affiliates and the Issuer and its
Subsidiaries (including Cameron) and an arrangement by which
Cooper will factor and the Issuer may repurchase certain of
Cameron's accounts receivable.
-2-<PAGE>
<PAGE> 3
(b) Article One of the Indenture is hereby further amended by
deleting in its entirety the definition of "Eligible Accounts
Receivable" in Section 1.01 and by substituting the following in
its place:
"Eligible Accounts Receivable" means, at any date, all
accounts receivable which are not more than 180 days past due
their due date under their normal payment terms.
(c) Article One of the Indenture is hereby further amended by
deleting in its entirety the language in the definition of
"Permitted Indebtedness" in Section 1.01 which follows the word
"Holders;" at the end of clause (viii) thereof and by substituting
the following in its place:
(ix) Indebtedness incurred in connection with the Cameron
Acquisition in an aggregate principal amount not to exceed
$4.6 million at any time outstanding and, subject to the
restrictions of clause (viii), any extension, renewal,
replacement or refunding thereof; and (x) Indebtedness of the
Issuer other than Indebtedness permitted under clauses (i)
through (ix), provided that the aggregate amount of such
Indebtedness may not exceed $10 million at any time
outstanding.
(d) Article One of the Indenture is hereby further amended by
deleting in its entirety the existing clause (ix) in the definition
of "Permitted Liens" in Section 1.01 and by substituting the
following in its place:
(ix) Liens on cash, accounts receivable, inventory, general
intangibles (including, without limitation, instruments,
documents, contract rights and other legal rights incident
thereto) and other current assets, and patents, trademarks and
other intangibles and, with respect to the U.K. Subsidiary,
Liens on all of the assets, capital stock and intercompany
notes of such entity, and the proceeds and products of all of
the foregoing, in connection with Indebtedness permitted to be
incurred pursuant to clause (i) of the definition of
"Permitted Indebtedness";
(e) Article One of the Indenture is hereby further amended by
adding the following definitions to Section 1.01 immediately
following the definition of "Properties":
Receivables Securitization Facility Documents" means
(i) any agreement or agreements governing or entered into in
connection with Indebtedness incurred or participation
interests issued by any Receivables Securitization Subsidiary
to facilitate the provision of working capital through the
sale or pledge to such Subsidiary, from time to time, of
accounts receivable of the Issuer or its Subsidiaries (or of
notes received in consideration of accounts receivable), and
all agreements, guarantees, books and records and returned or
repossessed goods related to such accounts receivable
(collectively, "Receivables"), including without limitation a
-3-<PAGE>
<PAGE> 4
receivables purchase and sale agreement, a revolving credit
agreement, promissory notes, letters of credit, lock-box
account agreements, a tax sharing agreement and an ancillary
services and lease agreement, and (ii) any agreement or
agreements governing or entered into in connection with
Indebtedness incurred or participation interests issued to
extend, renew, replace or refund all or any portion of the
Indebtedness incurred or participation interests issued under
clause (i), and in the case of each of clauses (i) and (ii),
as the same may be amended, restated, supplemented, assigned
or otherwise modified from time to time.
"Receivables Securitization Subsidiary" means any
Subsidiary of the Issuer the sole purposes of which are (i) to
provide working capital financing for the Issuer and its
Subsidiaries through the sale or pledge to such Subsidiary,
from time to time, of Receivables pursuant to the Receivables
Securitization Facility Documents, and (ii) such other
activities as may be necessary or incidental to such purpose
as contemplated by the Receivables Securitization Facility
Documents.
(f) Article One of the Indenture is hereby further amended by
adding the following language immediately following the end of the
definition of "Restricted Payments" in Section 1.01:
Notwithstanding the foregoing, the term "Restricted Payments"
shall not include:
(a) transactions contemplated by the Cameron Acquisition;
(b) the formation and capitalization of, and payments to
the Issuer or Subsidiaries from time to time by, a
Receivables Securitization Subsidiary pursuant to the
terms of the Receivables Securitization Facility
Documents; nor
(c) (1) Investments in cash, cash equivalents,
obligations of the United States of America or any agency
or instrumentality thereof, certificates of deposit,
commercial paper, repurchase agreements, acceptances,
time deposits, money market funds and comparable types of
short-term investments if made in the ordinary course of
business in accordance with the Issuer's past practices;
(2) payroll advances and advances for business and travel
expenses in the ordinary course of business;
(3) Investments by the Issuer or a Subsidiary in a
Wholly-owned Subsidiary, including a transaction by which
such entity becomes a Wholly-owned Subsidiary; and
(4) Investments in connection with interest rate swaps
and caps and currency swaps, contracts or options and
other similar hedging agreements, including without
limitation raw materials hedging or futures contracts, if
not made for speculative purposes but made solely for the
purpose of hedging against fluctuations in interest or
-4-<PAGE>
<PAGE> 5
foreign exchange rates or changes in the prices of raw
materials to which, in the ordinary course of business,
the Issuer and its Subsidiaries would otherwise be
exposed.
(g) Article One of the Indenture is hereby further amended by
adding the following definition to Section 1.01 immediately
following the definition of "Trustee":
"U.K. Subsidiary" means CFPD, Ltd., a wholly-owned subsidiary
of Cameron incorporated under the laws of England, or any
successor entity to CFPD, Ltd. following the Cameron
Acquisition.
(h) Article Four of the Indenture is hereby amended by
deleting from subclause (y) of clause (iv) of the last full
paragraph of Section 4.04 the language "clause (i)" and by
substituting the following in its place:
clauses (i) or (ix)
(i) Article Four of the Indenture is hereby further amended
by deleting in its entirety the language in clause (z) of the first
paragraph of Section 4.07 (up to but not including the words "(an
Asset Disposition )") and by substituting the following in its
place:
(z) a sale or other disposition of Receivables or of
participation interests therein pursuant to the terms of the
Receivables Securitization Facility Documents or in connection
with the incurrence of Indebtedness pursuant to clause (i) of
the definition of Permitted Indebtedness)
(j) Article Four of the Indenture is hereby further amended
by deleting the word "or" that immediately precedes clause (iv) of
Section 4.09 and by adding the following language immediately
before the period at the end of Section 4.09:
; or (v) restrictions or encumbrances on the payment of
dividends or distributions, the transfer of cash or assets,
the making of loans or advances or the payment of Indebtedness
contained in or directly or indirectly resulting from (x) the
Receivables Securitization Facility Documents or the
organizational documents of any Receivables Securitization
Subsidiary, or (y) any term or provision of any document
governing or evidencing Indebtedness incurred by the U.K.
Subsidiary pursuant to clause (i) of the definition of
Permitted Indebtedness or the grant of security therefor
(k) Article Four of the Indenture is hereby further amended
by inserting in Section 4.10, immediately following the words
"except for", the following language:
transactions contemplated by the Cameron Acquisition and other
transactions with Cooper and its affiliates the terms of which
are at least as favorable to the Issuer and its Subsidiaries
as the terms which could be obtained in a comparable
transaction on an arm's-length basis between unaffiliated
parties,
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<PAGE> 6
(l) Article Four of the Indenture is hereby further amended
by adding the following language immediately following the end of
Section 4.16:
Notwithstanding the foregoing, the provisions of this
Section 4.16 shall not apply to any Receivables Securitization
Subsidiary or to the transactions contemplated by the
Receivables Securitization Facility Documents.
2. The Indenture shall be deemed to be modified and amended
in accordance herewith and the respective rights, limitations of
rights, obligations, duties and immunities under the Indenture of
the Trustee, the Issuer, the Subsidiary Guarantors and the Holders
of outstanding Securities shall, as of the date hereof, be
determined, exercised and enforced under the Indenture, subject in
all respects to such modifications and amendments, and all the
terms and conditions of this Supplemental Indenture shall be deemed
to be part of the terms and conditions of the Indenture for any and
all purposes.
3. The Trustee accepts the amendment of the Indenture
effected by this Supplemental Indenture and agrees to execute the
trust created by the Indenture as hereby amended, but only upon the
terms and conditions set forth in the Indenture, including the
terms and provisions defining and limiting the liabilities and
responsibilities of the Trustee, which terms and provisions shall
in like manner define and limit its liabilities and
responsibilities in the performance of the trust created by the
Indenture as hereby amended, and, without limiting the generality
of the foregoing, the Trustee makes no representation as to (i) the
proper authorization hereof by the Issuer or the Subsidiary
Guarantors by corporate action or otherwise, (ii) the due execution
hereof by the Issuer or the Subsidiary Guarantors or (iii) the
validity, accuracy or sufficiency of this Supplemental Indenture.
The recitals contained herein are the statements of the Issuer and
the Subsidiary Guarantors, and the Trustee assumes no
responsibility for their correctness.
4. This Supplemental Indenture may be executed in any number
of counterparts, each of which when so executed shall be deemed to
be an original, and all of such counterparts shall together
constitute one and the same instrument.
5. Except as hereby expressly amended or supplemented, the
Indenture and the Securities issued thereunder are in all respects
ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect.
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<PAGE> 7
IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed, all as of the date and year first above
written.
WYMAN-GORDON COMPANY
By: /s/Luis E. Leon
Name: Luis E. Leon
Title: Vice President,
Chief Financial Officer
and Treasurer
Attest:
By: /s/Wallace F. Whitney, Jr., Esq.
Name: Wallace F. Whitney, Jr., Esq.
SUBSIDIARY GUARANTORS:
PRECISION FOUNDERS INC.
REISNER METALS, INC.
SCALED COMPOSITES, INC.
W-G ROME CORPORATION
WYMAN-GORDON COMPOSITES, INC.
WYMAN-GORDON COMPOSITE
TECHNOLOGIES, INC.
WYMAN-GORDON FISC LIMITED
WYMAN-GORDON INVESTMENT
CASTINGS, INC.
WYMAN-GORDON SECURITIES
CORPORATION
By: /s/Luis E. Leon
Name: Luis E. Leon
Title: Treasurer
(for each of the above-listed
Subsidiary Guarantors)
Attest:
By: /s/Wallace F. Whitney, Jr., Esq.
Name: Wallace F. Whitney, Jr., Esq.
(for each of the above-listed
Subsidiary Guarantors)
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<PAGE> 8
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/Arthur J. MacDonald
Name: Arthur J. MacDonald
Title: Assistant Vice President
Attest:
By: /s/Andrew M. Sinasky
Name: Andrew M. Sinasky
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<PAGE> 1
EXHIBIT 99.6
SECOND SUPPLEMENTAL INDENTURE
AND GUARANTEE
This SECOND SUPPLEMENTAL INDENTURE AND GUARANTEE, dated as of
May 27, 1994, is entered into by and among Wyman-Gordon Company, a
Massachusetts corporation (the "Issuer"), CFPD Ltd (to be known as
Wyman-Gordon Limited), a corporation registered under the laws of
England (the "U.K. Subsidiary"), and State Street Bank and Trust
Company, a Massachusetts banking corporation, as Trustee (the
"Trustee"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed thereto in the
Indenture, dated as of March 16, 1993, by and among the Issuer, the
Subsidiary Guarantors party thereto and the Trustee, as amended by
a Supplemental Indenture dated May 19, 1994 (as so amended, the
"Indenture").
W I T N E S S E T H :
WHEREAS, the Issuer has heretofore issued its 10 % Senior
Notes due 2003 (the "Securities") in the aggregate principal amount
of $90,000,000 pursuant to the Indenture;
WHEREAS, the Issuer has consummated the "Cameron Acquisition,"
as defined in the Indenture, and the U.K. Subsidiary has become an
indirect, wholly-owned Subsidiary of the Issuer;
WHEREAS, the U.K. Subsidiary desires to enter into certain
financing arrangements with a United Kingdom lender and to secure
such financing arrangements through the granting of Liens to such
lender on certain of the assets of the U.K. Subsidiary;
WHEREAS, Section 4.16 of the Indenture requires that, as a
condition of the granting of such Liens by the U.K. Subsidiary, the
Issuer, the U.K. Subsidiary and the Trustee must execute and
deliver a supplemental indenture to the Indenture evidencing the
U.K. Subsidiary's Guarantee of the Securities;
WHEREAS, Section 4.16 of the Indenture further provides that
neither the Issuer nor the U.K. Subsidiary is required to make any
notation on the Securities to reflect such Guarantee;
WHEREAS, this Second Supplemental Indenture and Guarantee
shall, upon execution and delivery, become an effective, valid,
binding and legal instrument evidencing the U.K. Subsidiary's
Guarantee as required by Section 4.16 of the Indenture;
WHEREAS, the Issuer has complied with the requirements of
Sections 9.01 and 9.04 of the Indenture with respect to the
execution of this Second Supplemental Indenture and Guarantee and
Section 9.01(f) of the Indenture permits the execution and delivery
of this Second Supplemental Indenture and Guarantee; and
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<PAGE> 2
WHEREAS, all acts and proceedings required by law and the
Restated Articles of Organization and By-laws of the Issuer to make
this Second Supplemental Indenture and Guarantee in the form hereof
a valid, binding and legal instrument have been done and performed,
and the execution and delivery hereof have been in all respects
duly authorized;
NOW, THEREFORE, in consideration of the foregoing recitals and
for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, each party agrees as follows for
the benefit of the other parties and for the equal and ratable
benefit of the Holders of the Securities:
1. The U.K. Subsidiary hereby acknowledges and agrees that,
upon the execution and delivery of this Second Supplemental
Indenture and Guarantee, the U.K. Subsidiary shall be deemed to be
a "Subsidiary Guarantor" within the meaning of clause (ii) of the
definition of "Subsidiary Guarantors" set forth in Article One,
Section 1.01 of the Indenture, and that the U.K. Subsidiary shall
in all respects be bound by and subject to the terms of Article
Eleven of the Indenture.
2. In furtherance and not in limitation of paragraph 1
above, the U.K. Subsidiary unconditionally guarantees (i) the due
and punctual payment of the principal of and interest on the
Securities, whether at maturity, by acceleration or otherwise, the
due and punctual payment of interest on the overdue principal and
interest, if any, on the Securities, to the extent lawful, and the
due and punctual performance of all other obligations of the Issuer
to the Holders or the Trustee all in accordance with the terms set
forth in Article Eleven of the Indenture and (ii) in the case of
any extension of time of payment or renewal of any Securities 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, subject, however, in the case of clauses (i) and (ii)
above, to the limitations set forth in Section 11.04 of the
Indenture.
3. The Indenture shall be deemed to be modified and amended
in accordance herewith and the respective rights, limitations of
rights, obligations, duties and immunities under the Indenture of
the Trustee, the Issuer, the Subsidiary Guarantors (including the
U.K. Subsidiary) and the Holders of outstanding Securities shall,
as of the date hereof, be determined, exercised and enforced under
the Indenture, subject in all respects to such modifications and
amendments, and all the terms and conditions of this Second
Supplemental Indenture and Guarantee shall be deemed to be part of
the terms and conditions of the Indenture for any and all purposes.
4. The Trustee accepts the amendment of the Indenture
effected by this Second Supplemental Indenture and Guarantee and
agrees to execute the trust created by the Indenture as hereby
amended, but only upon the terms and conditions set forth in the
Indenture, including the terms and provisions defining and limiting
-2-<PAGE>
<PAGE> 3
the liabilities and responsibilities of the Trustee, which terms
and provisions shall in like manner define and limit its
liabilities and responsibilities in the performance of the trust
created by the Indenture as hereby amended, and, without limiting
the generality of the foregoing, the Trustee makes no
representation as to (i) the proper authorization hereof by the
Issuer or the U.K. Subsidiary by corporate action or otherwise,
(ii) the due execution hereof by the Issuer or the U.K. Subsidiary
or (iii) the validity, accuracy or sufficiency of this Second
Supplemental Indenture and Guarantee. The recitals contained
herein are the statements of the Issuer and the U.K. Subsidiary,
and the Trustee assumes no responsibility for their correctness.
5. This Second Supplemental Indenture and Guarantee may be
executed in any number of counterparts, each of which when so
executed shall be deemed to be an original, and all of such
counterparts shall together constitute one and the same instrument.
6. Except as hereby expressly amended or supplemented, the
Indenture and the Securities issued thereunder are in all respects
ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect.
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<PAGE> 4
IN WITNESS WHEREOF, the parties have caused this Second
Supplemental Indenture and Guarantee to be duly executed, all as of
the date and year first above written.
WYMAN-GORDON COMPANY, as Issuer
By: /s/Luis E. Leon
Name: Luis E. Leon
Title: Vice President,
Chief Financial Officer
and Treasurer
Attest:
By: /s/Wallace F. Whitney, Jr.
Name: Wallace F. Whitney, Jr.
CFPD LTD,
as a Subsidiary Guarantor
By: /s/Luis E. Leon
Name: Luis E. Leon
Title: Authorised Director
Attest:
By: /s/Wallace F. Whitney, Jr.
Name: Wallace F. Whitney, Jr.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/Arthur J. MacDonald
Name: Arthur J. MacDonald
Title: Assistant Vice President
Attest:
By: /s/Andrew M. Sinasky
Name: Andrew M. Sinasky
-4-
<PAGE> 1
EXHIBIT 99.7
REVOLVING CREDIT AGREEMENT
Dated as of May 20, 1994
among
WYMAN-GORDON RECEIVABLES CORPORATION
THE FINANCIAL INSTITUTIONS PARTIES HERETO (the "Banks"),
and
SHAWMUT BANK, N.A.
as Issuing Bank,
as Facility Agent
and
as Collateral Agent.
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE I
DEFINITIONS
Section 1.01 Certain Definitions 1
Section 1.02 Accounting Terms 1
Section 1.03 Other Terms 2
Section 1.04 Computation of Time Periods 2
ARTICLE II
THE REVOLVING LOAN FACILITY
Section 2.01 Revolving Loan Facility 2
Section 2.02 Making of Revolving Loans 2
Section 2.03 Notice of Borrowings 3
Section 2.04 Disbursement of Funds 4
Section 2.05 Conversion and Continuation of Borrowings 5
Section 2.06 Termination, Reduction and Renewal of
Commitments 6
Section 2.07 Mandatory and Voluntary Prepayments and
Mandatory Reductions in Aggregate Net
Outstandings 8
Section 2.08 Revolving Loans in Connection with
Letters of Credit 9
Section 2.09 Additional Banks, Increase in Facility
Amount 10
Section 2.10 Replacement of Certain Banks 11
ARTICLE III
THE LETTER OF CREDIT FACILITY
Section 3.01 Obligation to Issue; Renewal of L/C
Facility 13
Section 3.02 Types and Amounts 13
Section 3.03 Conditions 14
Section 3.04 Issuance of Letters of Credit 14
Section 3.05 Reimbursement Obligations 18
Section 3.06 Payments under the Letters of Credit 19
Section 3.07 Indemnification; Exoneration 22
ARTICLE IV
INTEREST, FEES AND OTHER PAYMENT TERMS
Section 4.01 Interest 24
Section 4.02 Fees 24
Section 4.03 Payments and Computations 25
Section 4.04 Yield Protection 26
Section 4.05 Illegality; Unavailability 28
Section 4.06 Indemnity 29
Section 4.07 Pro Rata Treatment 29
Section 4.08 Taxes 30
</TABLE>
i<PAGE>
<PAGE> 3
<TABLE>
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ARTICLE V
CONDITIONS OF REVOLVING LOANS AND LETTERS OF CREDIT
Section 5.01 Conditions Precedent to Initial Borrowing
or Letter of Credit 32
Section 5.02 Conditions Precedent to Each Revolving
Loan and Letter of Credit 34
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties of WGRC 35
ARTICLE VII
AFFIRMATIVE COVENANTS
Section 7.01 Reports, Certificates; Other Information 39
Section 7.02 Inspection 41
Section 7.03 Books and Records of WGRC 42
Section 7.04 Corporate Existence 43
Section 7.05 Compliance with Laws 43
Section 7.06 Obligations and Taxes 43
Section 7.07 Facility Documents 43
Section 7.08 Location of Records 43
Section 7.09 Separate Corporate Existence 43
ARTICLE VIII
NEGATIVE COVENANTS
Section 8.01 Liens, Sales of Collateral 45
Section 8.02 Indebtedness 46
Section 8.03 Minimum Net Worth 46
Section 8.04 Guarantees 46
Section 8.05 Limitation on Investments 46
Section 8.06 Limitation on Transactions with
Affiliates 46
Section 8.07 Facility Documents 47
Section 8.08 Charter and By-Laws 47
Section 8.09 Lines of Business 47
Section 8.10 Bank Accounts 47
Section 8.11 Lock-Box Banks; Change in Payment
Instructions to Obligors 47
Section 8.12 Accounting Treatment 48
Section 8.13 ERISA Matters 48
Section 8.14 Merger, Consolidation, etc. 48
ARTICLE IX
SECURITY INTEREST; ADMINISTRATION AND COLLECTION OF RECEIVABLES
Section 9.01 Grant of Security Interest 48
Section 9.02 Continuing Liability of WGRC 50
Section 9.03 Collection of Receivables 50
</TABLE>
ii<PAGE>
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<TABLE>
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Page
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Section 9.04 Responsibilities of WGRC 52
Section 9.05 Further Action Evidencing Security
Interest 52
Section 9.06 Applications of Collections 53
Section 9.07 Administration of Collection Account
Prior to the Liquidation Period 53
Section 9.08 Administration of Collection Account
During the Liquidation Period 55
Section 9.09 Remittances and Investment of Funds 57
ARTICLE X
TERMINATION; REMEDIES; INDEMNIFICATION
Section 10.01 Termination; Remedies 57
Section 10.02 Binding Effect 58
Section 10.03 Indemnities by WGRC 58
ARTICLE XI
THE AGENTS
Section 11.01 Authorization and Action 61
Section 11.02 Nature of Agents' Duties 61
Section 11.03 UCC Filings 61
Section 11.04 Agent's Reliance, Etc 61
Section 11.05 Agent and Affiliates 62
Section 11.06 Credit Decision 63
Section 11.07 Indemnification 63
Section 11.08 Successor Agent 63
Section 11.09 Direction by the Banks 64
Section 11.10 Notice of Liquidation Events 64
Section 11.11 Duty of Care 65
Section 11.12 Delegation of Agency 65
ARTICLE XII
MISCELLANEOUS
Section 12.01 Amendments, Etc 66
Section 12.02 No Waiver; Remedies 67
Section 12.03 Successors and Assigns; Assignment;
Participations 67
Section 12.04 GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE;
WAIVER OF JURY TRIAL 68
Section 12.05 Notices 69
Section 12.06 Survival of Agreement 69
Section 12.07 Expenses; Indemnification 70
Section 12.08 Confidentiality 70
Section 12.09 No Recourse 71
Section 12.10 No Proceedings 72
Section 12.11 Execution in Counterparts; Severability 73
Section 12.12 Entire Agreement 74
Section 12.13 Exhibits and Schedules 75
</TABLE>
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<PAGE> 5
ANNEXES, EXHIBITS, AND SCHEDULES
Annex I Defined Terms
v<PAGE>
<PAGE> 6
EXECUTION COPY
REVOLVING CREDIT AGREEMENT
Dated as of May 20, 1994
This REVOLVING CREDIT AGREEMENT (the "Agreement"), dated
as of May 20, 1994, is entered into by and among Wyman-Gordon
Receivables Corporation, a Delaware corporation (hereinafter
"WGRC"), the financial institutions listed on the signature pages
hereof (the "Banks"), and Shawmut Bank, N.A. ("Shawmut"), in its
separate capacities as the issuing bank hereunder (the "Issuing
Bank"), as collateral agent for the Banks (in such capacity, the
"Collateral Agent") and as facility agent for the Banks (in such
capacity, the "Facility Agent").
W I T N E S S E T H:
WHEREAS, Wyman-Gordon Company, a Massachusetts
corporation ("Wyman"), and certain consolidated subsidiaries of
Wyman own all of the issued and outstanding capital stock of WGRC;
and
WHEREAS, the regular business activities of WGRC consists
and/or will consist of the purchase of accounts receivable and
certain related assets from Wyman and from certain other
consolidated subsidiaries of Wyman (collectively, the "Sellers")
and other activities incidental thereto; and
WHEREAS, WGRC, in order to finance its purchases of
receivables and other assets from the Sellers, has entered into
this Agreement whereby the Banks will, subject to the terms and
conditions set forth herein, agree to make Revolving Loans and to
issue and/or participate in letters of credit for the account of
WGRC;
NOW THEREFORE, in consideration of the foregoing premises
and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Definitions. For all purposes of
this Agreement, except as otherwise specifically provided herein,
capitalized terms used in this Agreement without definition
(including its preamble and recitals) shall have the meanings
ascribed to such terms in Annex I hereto, the terms of which are
incorporated by reference herein and made a part hereof.
SECTION 1.02. Accounting Terms. Under this Agreement,
all accounting terms not specifically defined herein shall be
interpreted, all accounting determinations made and all financial
statements prepared in accordance with GAAP.
-1-<PAGE>
<PAGE> 7
SECTION 1.03. Other Terms. All other undefined terms
contained in this Agreement shall, unless the context indicates
otherwise, have the meanings provided for by the UCC to the extent
the same are used or defined therein. The words "herein,"
"hereof," and "hereunder" and other words of similar import refer
to this Agreement as a whole, including the exhibits and schedules
hereto, as the same may from time to time be amended or
supplemented and not to any particular section, subsection, or
clause contained in this Agreement, and all references to Sections,
Exhibits and Schedules shall mean, unless the context clearly
indicates otherwise, the Sections hereof and the Exhibits and
Schedules attached hereto, the terms of which Exhibits and
Schedules are hereby incorporated into this Agreement. Whenever
appropriate, in the context, terms used herein in the singular also
include the plural, and vice versa.
SECTION 1.04. Computation of Time Periods. In this
Agreement, in the computation of a period of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but
excluding."
ARTICLE II
THE REVOLVING LOAN FACILITY
SECTION 2.01. Revolving Loan Facility. (a) Subject to
the terms and conditions and in reliance upon the representations
and warranties hereinafter set forth, each Bank severally agrees,
at any time and from time to time after the Effective Date until
the earlier of the Termination Date and the termination of the
Commitment of such Bank in accordance with the terms hereof, to
make a loan or loans (each such loan, a "Revolving Loan" and,
collectively, the "Revolving Loans"), in an amount such that the
aggregate amount of Revolving Loans made by such Bank at any time
outstanding shall not exceed (i) the Commitment set forth opposite
its name on Schedule 2.02, as the same may be reduced from time to
time pursuant to Section 2.06, minus (ii) such Bank's Pro Rata
Share of the outstanding face amount of any Letters of Credit. In
addition, the Banks shall not be required to make any Revolving
Loan at any time if, after giving effect to such Revolving Loans,
the Aggregate Net Outstandings would exceed the lesser of (i) the
Facility Amount or (ii) the Base Amount as determined by reference
to the most recent Daily Report delivered by the Servicer to the
Facility Agent in accordance with Article IX hereof.
SECTION 2.02. Making of Revolving Loans. (a) Each
Revolving Loan shall be made as part of a Borrowing consisting of
Revolving Loans made by the Banks ratably in accordance with their
respective Pro Rata Shares and each such Borrowing shall, at the
option of WGRC, be either a Base Rate Borrowing or a Eurodollar
Borrowing; provided, however, that the failure of any Bank to make
any Revolving Loan shall not in itself relieve any other Bank of
its obligation to make Revolving Loans hereunder (it being
understood, however, that no Bank shall be responsible or liable
for the failure of any other Bank to make any Revolving Loan
required to be made by such other Bank). The Revolving Loans
comprising each Borrowing shall be in an aggregate amount that is
-2-<PAGE>
<PAGE> 8
equal to (i) in the case of any Base Rate Borrowing, $1,000,000 or
an integral multiple of $500,000 in excess thereof and (ii) in the
case of any Eurodollar Borrowing, $3,000,000 or an integral
multiple of $1,000,000 in excess thereof; provided, however, that
notwithstanding the foregoing numerical requirements, WGRC may at
any time request a Base Rate Borrowing in an aggregate principal
amount equal to the excess of (i) the lesser of the Facility Amount
or the Base Amount over (ii) the sum of the Aggregate Loan Amount
and the Aggregate L/C Amount then in effect and the Banks shall,
subject to the satisfaction of the other terms and conditions
hereunder, make available the Revolving Loans comprising such Base
Rate Borrowing.
(b) WGRC's obligations to pay the principal of and
interest on all of the Revolving Loans made by each Bank shall be
evidenced by a promissory note payable to each such Bank
substantially in the form of Exhibit 2.02(b) hereto (each, a
"Revolving Note" and collectively, the "Revolving Notes") which
Revolving Note shall be dated the Effective Date and be in a stated
principal amount equal to such Bank's Commitment. The Revolving
Notes will mature on the Final Collection Date and be otherwise
entitled to the benefits of this Agreement. Notwithstanding the
stated principal amount of any Revolving Note, the aggregate
outstanding principal amount of the Revolving Loans made by any
Bank at any time shall be the aggregate principal amount owing on
such Bank's Revolving Note at such time. Each Bank shall and is
hereby authorized to record on the grid attached to its Revolving
Note (or, alternatively, in its internal books and records) the
date and amount of each Revolving Loan made by the Banks, the
interest rate and Interest Period applicable thereto and each
repayment thereof; and such books and records shall, as between
WGRC and such Bank, absent manifest error, constitute prima facie
evidence of the accuracy of the information contained therein.
Failure by any Bank to so record any Revolving Loan made by it or
any payment thereon shall not affect the obligations of WGRC under
this Agreement or under the Revolving Notes and shall not adversely
affect such Bank's rights under this Agreement with respect to the
repayment thereof.
SECTION 2.03. Notice of Borrowings. Whenever WGRC
wishes for the Banks to make Revolving Loans, WGRC shall give the
Facility Agent written or telecopy notice, promptly confirmed by
telephone (or telephone notice promptly confirmed in writing or by
telecopy) (a) in the case of a Base Rate Borrowing, not later than
4:00 p.m., Boston time, two Business Days prior to such proposed
Borrowing, and (b) in the case of a Eurodollar Borrowing, not later
than 1:00 p.m., Boston time, three Business Days before such
proposed Borrowing (a copy of which notice of a Eurodollar
Borrowing shall be concurrently sent by WGRC to any Bank which does
not maintain a Eurodollar Lending Office in the United States).
Each such notice (each, a "Notice of Borrowing") shall be
substantially in the form attached hereto as Exhibit 2.03, shall be
irrevocable and shall in each case refer to this Agreement and
specify (a) whether the Borrowing then being requested is to be a
Eurodollar Borrowing or a Base Rate Borrowing; (b) the date of such
Borrowing (which shall be a Business Day) and the amount thereof;
and (c) if such Borrowing is to be a Eurodollar Borrowing, the
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<PAGE> 9
Interest Period with respect thereto. If no election as to the
Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be a Base Rate Borrowing. If no Interest
Period with respect to any Eurodollar Borrowing is specified in any
such notice, then WGRC shall be deemed to have selected an Interest
Period of one month's duration. The Facility Agent shall promptly
advise the Banks of any notice given pursuant to this Section 2.03
and of each Bank's portion of the requested Borrowing.
SECTION 2.04. Disbursement of Funds. (a) After
receiving notice from the Facility Agent of any Notice of Borrowing
given pursuant to Section 2.03, each Bank shall make a Revolving
Loan in the amount of its pro rata portion of each Borrowing,
ratably according to its Pro Rata Share, on the proposed date
thereof by wire transfer of immediately available funds to the
Facility Agent in Boston, Massachusetts not later than 10:00 a.m.
Boston time, and the Facility Agent shall, by 12:00 noon, Boston
time, make available to WGRC by wire transfer of immediately
available funds the aggregate amount of the Borrowing funded by the
Banks on such date. Unless the Facility Agent shall have received
notice from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Facility Agent such Bank's
portion of such Borrowing, the Facility Agent may (but shall not be
required to) assume that such Bank has made such portion available
to the Facility Agent on the date of such Borrowing in accordance
with this Section 2.04 and the Facility Agent may (but shall not be
required to) make available to WGRC on such date a corresponding
amount in reliance upon such assumption. If and to the extent that
any Bank shall not have made its portion of a Borrowing available
to the Facility Agent and the Facility Agent has made available a
corresponding amount to WGRC, such Bank and WGRC each severally
agrees to repay to the Facility Agent forthwith on demand such
corresponding amount together with interest thereon, for each day
from the date such amount is made available to WGRC until the date
such amount is repaid to the Facility Agent at (i) in the case of
WGRC, the rate at which interest accrues on the Revolving Loans
comprising such Borrowing and (ii) in the case of such Bank, (1)
the Federal Funds Rate for such date and the next succeeding
Business Day, and (2) the Federal Funds Rate plus two percent (2%)
for each day thereafter. Any such repayment of principal by WGRC
shall be made from Available Cash pursuant to Section 9.07(c)
hereof. If such Bank shall repay to the Facility Agent such
corresponding amount, such amount shall constitute such Bank's
Revolving Loan as part of such Borrowing for purposes of this
Agreement. Nothing contained in this paragraph shall be construed
to relieve any Bank from its obligations hereunder to make
Revolving Loans to WGRC and to make available to the Facility Agent
its ratable portion of each Borrowing.
(b) In the event that any Bank fails to fund its Pro
Rata Share of any Revolving Loan requested by WGRC which such Bank
is obligated to fund under the terms of this Agreement (the funded
portion of such Revolving Loan being hereinafter referred to as a
"Non-Pro Rata Loan"), then until the earlier of (i) such Bank's
cure of such failure and (ii) the Collection Date, the proceeds of
all amounts thereafter paid or repaid to the Facility Agent by WGRC
and otherwise required to be applied to such Bank's share of any
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other Obligations pursuant to the terms of this Agreement shall,
unless otherwise required to be advanced to the Issuing Bank under
Section 3.06(b)(ii), be advanced to WGRC by the Facility Agent on
behalf of such Bank in the event that WGRC has repaid such amounts
(or shall be retained by the Facility Agent in the event that WGRC
has not repaid such amounts) to cure, in full or in part, such
failure by such Bank, but shall nevertheless be deemed to have been
paid to such Bank in satisfaction of such other Obligations.
Notwithstanding anything in this Agreement to the contrary:
(1) the foregoing provisions of this Section
2.04(b) shall apply only with respect to the proceeds of
payments of Obligations and shall not affect the
conversion or continuation of any Revolving Loans
hereunder;
(2) a Bank shall be deemed to have cured its
failure to fund its Pro Rata Share of any Revolving Loan
at such time as an amount equal to such Bank's Pro Rata
Share (determined as of the time of the Facility Agent's
receipt of the Notice of Borrowing with respect to such
Revolving Loan) of the requested principal portion of
such Revolving Loan is fully funded to WGRC, whether made
by such Bank itself or by operation of the terms of this
Section 2.04(b); and
(3) any amounts advanced to WGRC under this Section
2.04(b) to cure, in full or in part, any such Bank's
failure to fund its Pro Rata Share of any Revolving Loan,
shall be deemed a part of the same Borrowing as the
applicable Non-Pro Rata Loan.
SECTION 2.05. Conversion and Continuation of Borrowings.
(a) Subject to the terms and conditions set forth in this Section
2.05, WGRC shall have the option: (i) on any day, to convert all or
part of a Base Rate Borrowing to a Eurodollar Borrowing and (ii) on
the last day of any Interest Period of a Eurodollar Borrowing, to
convert all or any part of the Eurodollar Loans comprising such
Borrowing to Base Rate Loans and/or to continue all or any
remaining part of such Eurodollar Loans as a new Eurodollar
Borrowing the Interest Period for which shall commence on the last
day of such prior Interest Period; provided, however, that:
(i) each conversion or continuation shall be made
ratably among the Banks in accordance with their respective
Pro Rata Shares;
(ii) if less than all the outstanding amount of any
Borrowing shall be converted or continued, the aggregate
amount of such Borrowing converted or continued shall be in an
integral multiple of $500,000 for any Base Rate Borrowing and
$1,000,000 for any Eurodollar Borrowing;
(iii) no outstanding Eurodollar Borrowing may be continued
as a Eurodollar Borrowing, and no outstanding Base Rate
Borrowing may be converted into a Eurodollar Borrowing, at any
time that a Liquidation Event or Unmatured Liquidation Event
has occurred and is continuing; and
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(iv) there shall not be more than eight (8) separate
Eurodollar Borrowings outstanding at any one time.
(b) Whenever WGRC wishes to convert and/or continue a
Borrowing under this Section 2.05, WGRC shall give the Facility
Agent written or telecopy notice, promptly confirmed by telephone
(or telephone notice promptly confirmed in writing or by telecopy),
(a) in the case of a conversion to a Base Rate Borrowing, not later
than 1:00 p.m., Boston time, one Business Day prior to the proposed
Conversion/Continuation Date, and (b) in the case of a conversion
to or continuation of a Eurodollar Borrowing, not later than 1:00
p.m., Boston time, three Business Days before such proposed
Conversion/Continuation Date (a copy of which notice of conversion
to or continuation of a Eurodollar Borrowing shall be concurrently
sent by WGRC to any Bank which does not maintain a Eurodollar
Lending Office in the United States). Each such notice ("Notice of
Conversion/Continuation") shall be substantially in the form of
Exhibit 2.05(b) hereto, shall be irrevocable and shall refer to
this Agreement and specify (i) the identity and amount of the
Borrowing that WGRC requests be converted or continued, (ii)
whether such Borrowing is to be converted to or continued as a
Eurodollar Borrowing or a Base Rate Borrowing, (iii) the proposed
Conversion/Continuation Date (which shall be a Business Day) and
(iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto. If
no Interest Period is specified in any such notice with respect to
any conversion to or continuation as a Eurodollar Borrowing, WGRC
shall be deemed to have selected an Interest Period of one month's
duration. If WGRC shall not have delivered a timely Notice of
Conversion/Continuation in accordance with this Section 2.05 with
respect to any Borrowing, such Borrowing shall, on the last day of
the Interest Period applicable thereto (unless repaid pursuant to
the terms hereof), automatically be converted into or continued as
a Base Rate Borrowing. The Facility Agent shall promptly advise
the other Banks of any notice given pursuant to this Section 2.05
and of each Bank's portion of any converted or continued Borrowing.
SECTION 2.06. Termination, Reduction and Renewal of
Commitments. (a) The Commitments shall be automatically and
permanently terminated on the Termination Date (prompt notice of
which shall be given by WGRC to the Rating Agency).
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Facility Agent (promptly
confirmed by telephone), WGRC may at any time terminate in whole or
reduce in part the Commitments, which reduction shall cause a
corresponding irrevocable reduction in the Facility Amount;
provided, however, that (i) each such partial reduction of the
Commitments shall be in an integral multiple of $1,000,000, (ii) no
such partial reduction shall reduce the Facility Amount to an
amount less than $32,000,000, and (iii) no such termination or
reduction shall be made which would reduce the Facility Amount to
an amount less than the Aggregate Net Outstandings outstanding at
such time. Each reduction in the Commitments hereunder shall be
made ratably among the Banks in accordance with their respective
Pro Rata Shares. The Facility Agent shall promptly advise the
Banks and the Rating Agency of any notice given pursuant to this
Section 2.06(b).
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(c) Unless earlier terminated pursuant to Section
2.06(a), the agreement of the Banks to make Revolving Loans and to
issue and/or participate in Letters of Credit hereunder shall be
effective from the Effective Date through the Commitment
Termination Date. No more than ninety days and no less than sixty
days prior to the second anniversary of the Effective Date, and (if
and when applicable) no more than ninety days and no less than
sixty days prior to any successive anniversary of the Effective
Date, WGRC may notify the Facility Agent and the Banks in writing
of its request (each such request an "Extension Request") to extend
the then effective Commitment Termination Date by one additional
year, and each Bank shall notify WGRC in writing whether it agrees
to such extension not later than thirty days after the receipt of
such Extension Request. If (i) the Required Banks give timely
written notice of such agreement in accordance with the immediately
preceding sentence, and (ii) the aggregate Commitments of the Banks
agreeing to such extension is not less than 50% of the aggregate
Commitments in effect on the Effective Date, then the Commitment
Termination Date shall be so extended (and WGRC shall give
concurrent notice thereof to the Rating Agency); provided, however,
that (1) the failure of any Bank to respond to an Extension Request
shall be deemed to constitute such Bank's denial of such Extension
Request; and (2) no Bank which has denied its consent to an
Extension Request (each such Bank, a "Dissenting Bank") shall be
bound by the Required Banks' approval of such Extension Request and
the Commitment of each Dissenting Bank shall expire on the
Commitment Termination Date which was applicable hereunder at the
time of such Bank's receipt of the Extension Request.
(d) WGRC shall have the right, at any time prior to the
expiration of a Dissenting Bank's Commitment, to request that all
or a portion of such Commitment be purchased in accordance with the
provisions of this Section 2.06(d) and Section 2.10 hereof. In the
event that the entire Commitment of any Dissenting Bank is not so
purchased prior to such expiration, then as of the date of such
expiration, but only if and so long as the Liquidation Period has
not commenced in accordance with the terms of this Agreement, and
the transactions described below would not cause a Liquidation
Event or Unmatured Liquidation Event to occur and would not cause
the Aggregate Net Outstandings of any remaining Bank to exceed its
Commitment, (1) the Facility Amount and the aggregate amount of the
Commitments shall be reduced by the aggregate amount of the
expiring and unpurchased Commitments of all such Dissenting Banks,
(2) the Pro Rata Shares of the Banks (including any purchasing
Banks) shall be readjusted accordingly, (3) such Dissenting Bank
shall be released from any further funding obligation with respect
to the Revolving Loans and the Participated Letters of Credit
(whether issued theretofore or thereafter), and the other Banks
shall, up to the amounts of their respective Commitments, be deemed
to have purchased such Dissenting Bank's interest in the
Participated Letters of Credit in accordance with their
recalculated Pro Rata Shares, and (4) WGRC shall direct that, in
accordance with the terms of Section 9.07(c) hereof, but subject to
Section 9.08 hereof, all Available Cash and other funds of WGRC
shall be paid on such day and each Business Day thereafter (x)
first, to each such Dissenting Bank (pro rata, relative to the
amount of all such Dissenting Banks' expiring and unpurchased
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Commitments, in accordance with the amount of each such Dissenting
Bank's expiring and unpurchased Commitment) until all then
outstanding Revolving Loans, all accrued interest thereon and all
amounts due and owing to each such Dissenting Bank hereunder or
under any other Facility Document have been paid in full, and (y)
second, to the Collateral Agent to cash collateralize each such
Dissenting Bank's portion of any outstanding Syndicated Letters of
Credit (unless WGRC shall have arranged for the surrender or
replacement of such Letter of Credit or made such other
arrangements in respect thereof as shall be mutually satisfactory
to WGRC, such Dissenting Bank and the Facility Agent). To the
extent that WGRC may borrow Revolving Loans under this Agreement
following the expiration of such Dissenting Banks' Commitments,
WGRC agrees to so borrow and apply the funds obtained thereby to
the payment of the amounts described above. Upon the purchase
and/or expiration of any Dissenting Bank's Commitment in accordance
with the foregoing and payment in full of the amounts described
above, such Dissenting Bank shall cease to be a party hereto
(subject to any rights of indemnification which survive the
termination of this Agreement). In the event that the Liquidation
Period commences prior to payment in full of the amounts described
above to any Dissenting Bank, then (1) such Dissenting Bank shall
be deemed to have a Pro Rata Share equal to a fraction, the
numerator of which equals the sum of the amount of outstanding
Revolving Loans owing to such Dissenting Bank plus the amount of
Syndicated Letters of Credit with respect to which such Dissenting
Bank remains liable and which has not yet been cash collateralized
as set forth above, and the denominator of which equals the
aggregate outstanding Revolving Loans and Letters of Credit, (2)
the Pro Rata Shares of all of the other Banks shall be adjusted
accordingly, and (3) all Available Cash and other funds of WGRC
shall thereafter be paid in accordance with the terms of Section
9.08 hereof.
SECTION 2.07. Mandatory and Voluntary Prepayments and
Mandatory Reductions in Aggregate Net Outstandings. (a) On any
date on which the sum of the Aggregate Loan Amount and the
Aggregate L/C Amount exceeds the Base Amount, Available Cash shall
be retained by the Collateral Agent and distributed in accordance
with this Section 2.07(a) unless and until the Aggregate Net
Outstandings are equal to or less than the Base Amount. Any
Available Cash so retained shall, in accordance with Section
2.07(b) below, be either retained in the Collection Account or
remitted on such date to the Banks to prepay or cash collateralize
the Revolving Loans and/or to cash collateralize the outstanding
Letters of Credit (according to the provisions of Section 9.07(b)
hereof) in such amount as shall be necessary so that, after giving
effect to such retention and application or cash collateralization,
the Aggregate Net Outstandings will no longer exceed the Base
Amount. To the extent such Available Cash is not sufficient to
eliminate such excess, Available Cash on each succeeding Business
Day shall continue to be retained and applied by the Collateral
Agent in accordance with the foregoing provisions of this Section
2.07(a) unless and until the Aggregate Net Outstandings no longer
exceed the Base Amount or the Liquidation Period commences, at
which time such Available Cash shall be distributed and applied in
accordance with Section 9.07 or Section 9.08, respectively.
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(b) Each mandatory prepayment pursuant to Section
2.07(a) and applicable to Revolving Loans shall be applied first to
all Base Rate Loans then outstanding and second to all Eurodollar
Loans with Interest Periods ending on the date of such mandatory
reduction. To the extent that, after making all applications
pursuant to the immediately preceding sentence, the sum of the
Aggregate Loan Amount and the Aggregate L/C Amount continues to
exceed the Base Amount, then, in such event, all Available Cash
shall be retained in the Collection Account in such amount as shall
be necessary so that, after giving effect to such retention, the
Aggregate Net Outstandings will be less than or equal to the Base
Amount then in effect. Any such Available Cash still so retained
on the last day of the Interest Period for any Eurodollar Loans
shall, up to the amount of the Eurodollar Loans the Interest Period
of which ends on such day, be remitted by the Facility Agent to the
Banks for application against such Eurodollar Loans.
(c) In addition to the foregoing, WGRC may from time to
time, on two Business Days' notice to the Facility Agent, request a
voluntary prepayment of the Revolving Loans by directing the
Facility Agent to remit to the Banks all Available Cash and/or
other funds of WGRC for application against the Revolving Loans
designated for prepayment by WGRC in such notice. Each such notice
of voluntary prepayment shall be binding and irrevocable on WGRC.
(d) All mandatory and voluntary prepayments under this
Section 2.07 shall be without premium or penalty of any kind except
for any indemnification which may be owed in connection with the
prepayment of Eurodollar Loans pursuant to Section 4.06.
SECTION 2.08. Revolving Loans in Connection with Letters
of Credit. Whenever the Banks severally or the Issuing Bank
individually issues a Letter of Credit pursuant to Article III
hereof, each Bank shall, automatically and without further action
of any kind upon the effective date of issuance of such Letter of
Credit, have irrevocably agreed to make a Revolving Loan hereunder
in the event and at such time that such Letter of Credit is
subsequently drawn. In the event of such a draw, all such
Revolving Loans shall comprise Base Rate Borrowings in an amount
equal to the amount of such draw (without regard to the numerical
requirements set forth in Section 2.02(a)), shall be made ratably
by the Banks according to their Pro Rata Shares, shall accrue
interest as provided in Article IV and may be converted, continued,
or repaid according to the other provisions of this Article II.
Upon the making of any such Revolving Loans pursuant to this
Section 2.08, the Aggregate Loan Amount shall automatically
increase by the amount of such Revolving Loans and the Aggregate
L/C Amount shall decrease accordingly. In the event that any
Letter of Credit expires or is surrendered without being drawn (in
whole or in part) then, in such event, the foregoing commitment to
make Revolving Loans shall expire and each of the Aggregate L/C
Amount and the Aggregate Net Outstandings shall automatically
reduce by the amount of the Letter of Credit which is no longer
outstanding.
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SECTION 2.09. Additional Banks; Increase in Facility
Amount. From time to time, WGRC shall have the right, subject to
the terms set forth herein, to request an increase in the Facility
Amount as follows:
(i) WGRC shall first request that the Facility Agent, in
its sole discretion, increase its Commitment in an amount up
to the amount of the requested increase in the Facility
Amount.
(ii) To the extent that the Facility Agent has not
agreed to increase its Commitment by the full amount of the
requested increase in the Facility Amount within fifteen (15)
days of the written request of WGRC, WGRC may request that the
Banks, in their sole discretion, increase their Commitments in
an aggregate amount up to the amount of the requested increase
in the Facility Amount which is remaining after giving effect
to clause (i) above. Any such request shall be made to all
Banks. In the event that more than one Bank so agrees to
increase its Commitment and the aggregate thereof exceeds the
amount of the increase in the Facility Amount requested under
this clause (ii), each such Bank shall receive an additional
Commitment ratably equal to (a) the amount of such Bank's
requested increase in its Commitment times (b) the amount of
the increase in the Facility Amount requested under this
clause (ii) divided by (c) the aggregate amount of the
requested increases in Commitments by the Banks under this
clause (ii).
(iii) To the extent that the Banks have not agreed to
increase their Commitments by the remaining amount of the
requested increase in the Facility Amount within fifteen (15)
days of the written request of WGRC, WGRC shall have the right
to select an additional financial institution to become a
party hereto as a Bank with a Commitment equal to any
remaining requested increase in the Facility Amount, which
Bank is reasonably acceptable to the Facility Agent and is an
Eligible Assignee.
Notwithstanding the foregoing, (a) any increase in the Facility
Amount shall be subject to the prior written confirmation by the
Rating Agency that such increase will not cause the Rating Agency
rating of the Facility, as set forth in the letter described in
Section 5.01(xiv), to be reduced or withdrawn, (b) any increase in
the Facility Amount shall be in an aggregate amount of not less
than $1,000,000, and (c) in no event may the Facility Amount be
increased to an amount in excess of $75,000,000 without the prior
written consent of Banks whose Pro Rata Shares aggregate at least
seventy-five percent (75%) (which consent shall not be unreasonably
withheld). Upon receipt of confirmation from the Rating Agency
and, if necessary, consent from the Required Banks, the Facility
Agent shall promptly notify the Banks and the Collateral Agent of
the increase in the Facility Amount and WGRC, the Agents, the
Issuing Bank, the Banks and, if applicable, each additional Bank
shall enter into an amendment to this Agreement and the other
applicable Facility Documents which shall effectuate such increase
and, if applicable, incorporate each such additional Bank as a Bank
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for all purposes of the Facility Documents and pursuant to which
each such additional Bank shall purchase from each other Bank a
participation interest in the Letters of Credit then outstanding,
which participation interest shall be in a percentage equal to such
additional Bank's or Banks' Pro Rata Share or Shares (as calculated
below). Immediately upon the effectiveness of such amendment, (1)
the Facility Amount shall be increased by the amount of the
additional Commitments; (2) the respective Pro Rata Shares of the
Banks (including the additional Banks, if applicable) shall be
recalculated accordingly; and (3) each additional Bank and/or any
Bank increasing its Commitment shall (x) purchase, by wire transfer
of immediately available funds to the other Banks, its Pro Rata
Share of all outstanding Revolving Loans made by the other Banks
and (y) shall purchase from each other Bank a participation
interest in the Letters of Credit, in each case in an amount
necessary so that the Revolving Loans of all the Banks (including,
if applicable, any additional Bank) and each Bank's obligations in
respect of the Letters of Credit shall be outstanding according to
their respective Pro Rata Shares as the same have been recalculated
pursuant to the preceding provisions of this Section 2.09.
SECTION 2.10. Replacement of Certain Banks. In the
event that any Bank (i) has denied its consent to an Extension
Request pursuant to Section 2.06 hereof, which has been consented
to by the Required Banks, or (ii) requested compensation from WGRC
pursuant to Section 4.04 or Section 4.08 hereof to recover
additional costs or Taxes incurred by such Bank which are not being
incurred generally by the other Banks, (iii) delivered a notice
pursuant to Section 4.05 hereof claiming that such Bank is unable
to make Eurodollar Loans for reasons not generally applicable to
the other Banks, (iv) become unable to honor its Commitment
hereunder because the funding of such Commitment has become
unlawful, or (v) failed to fund its Pro Rata Share of any Revolving
Loan or any draw under a Letter of Credit, then, in any such case,
WGRC may make written demand on such Bank (each such Bank, a
"Departing Bank") (with a copy to the Facility Agent) for such
Departing Bank to assign all of its Revolving Loans and all of its
other rights and obligations under this Agreement as follows:
(i) WGRC shall first request that the Facility Agent, in
its sole discretion, purchase the Commitment, or any portion
thereof, of such Departing Bank.
(ii) To the extent that the Facility Agent has not
agreed to purchase all of the Commitment of such Departing
Bank within fifteen (15) days of a written request from WGRC,
WGRC may request that one or more of the other Banks, in their
sole discretion, purchase the remaining Commitment, or any
portion thereof, of such Departing Bank. In the event that
more than one Bank so agrees to purchase all or a portion of
the Commitment of the Departing Bank which is not purchased by
the Facility Agent under clause (i) above, and the aggregate
amount requested under this clause (ii) exceeds the remaining
Commitment of such Departing Bank, each such Bank shall
purchase a portion of such Departing Bank's Commitment equal
to (a) the amount of such Bank's requested purchase times (b)
the Commitment of such Departing Bank not purchased by the
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Facility Agent under clause (i) above, divided by (c) the
aggregate amount of the requested purchases thereof by the
Banks.
(iii) To the extent that the Banks have not agreed to
purchase all of such remaining Commitment, if any, of such
Departing Bank within fifteen (15) days of a written request
from WGRC, WGRC shall have the right, at any time, to select
an Eligible Assignee reasonably acceptable to the Facility
Agent to purchase any remaining Commitment, or any portion
thereof, of such Departing Bank (each such new financial
institution, a "Replacement Bank").
Each such assignment shall be executed pursuant to one or more duly
executed Assignments and Acceptances in the form of Exhibit 12.03
hereto, and shall be consummated within ten (10) Business Days
after the date the Banks and Replacement Banks, as applicable,
agree to purchase the Departing Bank's Commitment as described
above, at an aggregate purchase price equal to the principal amount
of such Departing Bank's outstanding Revolving Loans, all accrued
interest thereon and all other amounts due and owing to such
Departing Bank hereunder or under any other Facility Document.
Each such assignment shall become effective upon payment of such
aggregate purchase price and, with respect to the replacement of a
Dissenting Bank pursuant to Section 2.06(d), the expiration of such
Dissenting Bank's Commitment. Notwithstanding the foregoing, no
assignment under this Section 2.10 shall be consummated if, as a
result thereof, a Liquidation Event or Unmatured Liquidation Event
would occur. Immediately upon such effectiveness, but only if the
Liquidation Period shall not have commenced in accordance with the
terms of this Agreement, (1) the purchasing Banks and/or the
Replacement Banks, as the case may be, shall assume the Departing
Bank's rights and obligations hereunder to the extent purchased
(including, without limitation, obligations to make Revolving Loans
and participate in Letters of Credit), (2) each remaining Bank's
Pro Rata Shares shall be adjusted accordingly (including any
adjustment for reductions in the Facility Amount as a result of the
expiration of a Dissenting Bank's Commitment) and (3) such
Departing Bank shall be released from any further funding
obligations with respect to the Revolving Loans and the
Participated Letters of Credit (whether issued theretofore or
thereafter). Unless WGRC shall have arranged for the surrender or
replacement of each Syndicated Letter of Credit under which the
Departing Bank is an Issuer or made such other arrangements in
respect thereof as shall be mutually satisfactory to WGRC, such
Departing Bank, the proposed Replacement Bank and the Facility
Agent, WGRC shall provide cash collateral to the Collateral Agent
concurrently with the effectiveness of each assignment hereunder
(or, in the case of Dissenting Banks, following such effectiveness
in accordance with Section 2.06(d)) in an amount equal to each
Departing Bank's portion of Syndicated Letters of Credit issued by
such Departing Bank. Any cash collateral held for all Departing
Banks' portions of Syndicated Letters of Credit (whether under this
Section 2.10 or under Section 2.06(d)) shall be retained by the
Collateral Agent in a separate interest-bearing account maintained
on the corporate trust side of the Bank to be invested in Permitted
Investments in the manner provided in Section 9.09 (with interest
thereon to be returned to the Collection Account as and when the
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same is paid) and shall not otherwise be released unless and until,
and only to the extent that either (i) a related Letter of Credit
(or any Departing Bank's share thereof) has terminated, been
replaced or expired undrawn, upon which termination or expiration
the applicable portion of the cash collateral shall be returned to
the Collection Account for distribution and application in
accordance with Section 9.07 or Section 9.08, as applicable or (ii)
the Syndicated Letters of Credit have been drawn, in which event
the applicable portion of the cash collateral shall be wired to the
applicable beneficiary or beneficiaries in satisfaction of the
Departing Bank's funding obligations under such Syndicated Letters
of Credit. Upon the replacement of a Departing Bank as described
above, such Departing Bank shall cease to be a party hereto
(subject to any rights of indemnification which survive the
termination of this Agreement). The Facility Agent is hereby
authorized to execute one or more Assignment and Acceptances as
attorney-in-fact for any Departing Bank failing to execute and
deliver the same within five (5) Business Days after the date on
which the Departing Bank was tendered the purchase price and was
required to execute such Assignment and Acceptance in accordance
with the foregoing provisions of this Section 2.10.
ARTICLE III
THE LETTER OF CREDIT FACILITY
SECTION 3.01. Obligation to Issue; Renewal of L/C
Facility. Subject to the terms and conditions of this Agreement,
and in reliance upon the representations and warranties set forth
herein, each Bank hereby severally agrees, and the Issuing Bank
individually agrees, to issue for the account of WGRC through such
Issuer's branches as it and WGRC may jointly agree, one or more
Letters of Credit in accordance with this Article III, from time to
time during the period commencing on the Effective Date and ending
on the Termination Date.
SECTION 3.02. Types and Amounts. No Issuer shall have
any obligation to issue any Letter of Credit at any time if:
(i) such Issuer's Pro Rata Share of the aggregate
maximum amount then available for drawing under the
Syndicated Letters of Credit plus, in the case of (x) the
Issuing Bank, the maximum amount then available for
drawing under the Participated Letters of Credit, or
(y) in the case of any other Bank, its Pro Rata Share of
the maximum amount available for drawing under such
Participated Letters of Credit after giving effect to the
issuance of the requested Letter of Credit, shall exceed
any limit imposed by law or regulation upon such Issuer
or Bank, written notice of which limit has been given by
such Issuer or Bank to WGRC and the Facility Agent;
(ii) after giving effect to the issuance of the
requested Letter of Credit, either: (A) the Aggregate L/C
Amount would exceed the L/C Facility Sub-Amount, or
(B) the Aggregate Net Outstandings would exceed the Base
Amount; or (C) the sum of the Aggregate L/C Amount and
the Aggregate Loan Amount would exceed the Facility
Amount;
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(iii) such Letter of Credit has an expiration date
(A) more than eighteen months after the date of issuance
(subject to renewal for an additional eighteen months
unless earlier terminated by sixty (60) days prior
written notice from the Facility Agent in accordance with
the terms of this Agreement) or (B) later than three (3)
Business Days prior to the Commitment Termination Date;
or
(iv) the beneficiary under such Letter of Credit is a
foreign government or an entity located in a foreign
jurisdiction with whom, because of governmental hostilities or
terrorist activities, such Issuer is restricted from doing
business, prior written notice of which restriction has been
given by such Issuer to WGRC and the Facility Agent.
SECTION 3.03. Conditions. In addition to being subject
to the satisfaction of the conditions contained in Article V, the
obligation of the Issuers to issue any Letter of Credit is subject
to the satisfaction in full of the following conditions:
(i) WGRC shall have timely delivered to the
Facility Agent and to each applicable Issuer at such
times and in such manner as the Facility Agent and each
such Issuer may prescribe a Letter of Credit application
as described below in Section 3.04 and such other
documents and materials as may be required pursuant to
the terms thereof, and the terms of the proposed Letter
of Credit shall be reasonably satisfactory to each
applicable Issuer as to form and content; and
(ii) as of the date of issuance no order, judgment
or decree of any court, arbitrator or governmental
authority shall purport by its terms to enjoin or
restrain any applicable Issuer from issuing the Letter of
Credit (or to enjoin or restrain any Bank from
participating therein) and no law, rule or regulation
applicable to any applicable Issuer or Bank and no
request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction
over any applicable Issuer or Bank shall prohibit or
request that such Issuer or Bank refrain from the
issuance of (or participation in) letters of credit
generally or the issuance of (or participation in) that
Letter of Credit.
SECTION 3.04. Issuance of Letters of Credit.
(a) Request for Issuance. Except with respect to
Letters of Credit to be issued on the Effective Date, WGRC shall
give the Facility Agent at least ten (10) Business Days' prior
written notice of any requested issuance of a Syndicated Letter of
Credit under this Agreement and WGRC shall give each of the
Facility Agent and the Issuing Bank at least three (3) Business
Days' prior written notice of any requested issuance of a
Participated Letter of Credit under this Agreement (except that, in
lieu of each such written notice, WGRC may give telephonic notice
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<PAGE> 20
of such request if confirmed promptly in writing). Each such
notice shall be in the form of a Letter of Credit application
attached hereto as Exhibit 3.04(a) and shall specify the stated
amount of the Letter of Credit requested, the effective date (which
day shall be a Business Day) of issuance of such requested Letter
of Credit, the date on which such requested Letter of Credit is to
be delivered (if different from the effective date), the date on
which such requested Letter of Credit is to expire, the purpose for
which such Letter of Credit is to be issued, the Person for whose
benefit the requested Letter of Credit is to be issued, and, if
available, a copy of the proposed Letter of Credit substantially in
the form of Exhibit 3.04(c)(ii) or Exhibit 3.04(c)(iii) hereto
(appropriately completed, including, if applicable, the form of
draw certificate with respect thereto together with such other
changes requested by the beneficiary as may be acceptable to each
Issuer thereof). Such notice, to be effective, must be received by
the Facility Agent (and, if applicable, the Issuing Bank) not later
than 1:00 p.m. (Boston time) on the last Business Day on which
notice can be given under the first sentence of this
Section 3.04(a), and WGRC shall, in each such case, provide copies
of such notices to the other Banks within one (1) Business Day.
Prior to the close of business on the Business Day following the
Business Day on which the Facility Agent makes the determination
described below pursuant to Section 3.04(b), the Facility Agent
shall confirm to WGRC by written or telex notice, or telephonic
notice confirmed promptly thereafter in writing, whether the
applicable Issuers are authorized to issue the requested Letter of
Credit in accordance with Section 3.04(b), and, if they are so
authorized, shall promptly advise each Bank (and, if applicable,
the Issuing Bank) of such authorization and, with respect to
Syndicated Letters of Credit, of each Bank's portion thereof.
(b) Responsibilities of the Facility Agent; Issuance.
The Facility Agent shall determine (based solely upon the
information set forth in the applicable Daily Report provided by
the Servicer to the Facility Agent), as of the close of business on
the third Business Day immediately preceding the requested issuance
date, each of (1) the excess of the L/C Facility Sub-Amount over
the Aggregate L/C Amount, (2) the excess of the Base Amount over
the Aggregate Net Outstandings and (3) the excess of the Facility
Amount over the sum of the Aggregate L/C Amount and the Aggregate
Loan Amount. If, and only if, the stated amount of the requested
Letter of Credit is less than or equal to the amount of each such
excess and subject to the satisfaction of the conditions set forth
in Section 3.03 and Article V hereof, the Facility Agent shall
authorize the Banks or the Issuing Bank, as applicable, to issue
the requested Letter of Credit. Subject to the terms and
conditions of this Article III, the Banks or the Issuing Bank, as
applicable, shall, on the requested date, issue such Letter of
Credit on behalf of WGRC. In this connection, the Facility Agent
and each Issuer may conclusively assume that the applicable
conditions set forth in Section 3.03 and Article V hereof have been
satisfied (other than as set forth in this Section 3.04(b)) unless
the primary loan officer of the Facility Agent or such Issuer, as
the case may be, having day-to-day responsibility for matters
relating to this transaction or, if different, the officer of the
Facility Agent or such Issuer designated under Section 12.05 for
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<PAGE> 21
receiving notices sent to such party, has actual knowledge to the
contrary or unless the Facility Agent or such Issuer, as the case
may be, shall have received written notice to the contrary from the
Facility Agent or a Bank.
(c) Forms of Letters of Credit. (i) Each Letter of
Credit to be issued in a face amount of less than $5,000,000 shall
be in the form of a Participated Letter of Credit and each Letter
of Credit to be issued in a greater face amount shall be in the
form of a Syndicated Letter of Credit.
(ii) Each Participated Letter of Credit shall consist of
a single letter of credit issued by the Issuing Bank, and shall
have a face amount of less than $5,000,000. Each such Participated
Letter of Credit shall be prepared by the Issuing Bank on the basis
of the information provided in the request for issuance and shall
be otherwise substantially in the form of Exhibit 3.04(c)(ii).
Promptly upon such preparation, the Issuing Bank shall provide a
copy of such Participated Letter of Credit to the Facility Agent.
(iii) Each Syndicated Letter of Credit shall consist of
a single letter of credit issued on the same day by the Banks in
counterpart form ratably in accordance with their respective Pro
Rata Shares, and shall have an aggregate face amount equal to or
greater than $5,000,000. Promptly following the Facility Agent's
receipt of a request for issuance of a Syndicated Letter of Credit
pursuant to Section 3.04(a) above, the Facility Agent shall prepare
a form of the Syndicated Letter of Credit on the basis of the
information provided in the request for issuance and which is
otherwise substantially in the form of Exhibit 3.04(c)(iii) and
shall cause execution copies of such Syndicated Letter of Credit to
be delivered to each Bank. Each Bank shall promptly, and in no
event later than four (4) Business Days after receipt of the form
prepared by the Facility Agent, advise the Facility Agent of any
objections it has to the form of the proposed Syndicated Letter of
Credit. Unless a Bank so notifies the Facility Agent of an
objection, such Bank shall, not later than two (2) Business Days
prior to the date of issuance of such Syndicated Letter of Credit,
deliver to the Facility Agent a counterpart of such Syndicated
Letter of Credit, duly executed by such Bank. After the Facility
Agent's receipt of a counterpart of such Syndicated Letter of
Credit from each Bank, but only if the Facility Agent shall have
received such counterparts from all Banks, and upon fulfillment of
the applicable conditions set forth in this Agreement, the Facility
Agent shall make such Syndicated Letter of Credit available to WGRC
on the requested issuance date. WGRC agrees that, if any
Syndicated Letter of Credit is not issued on account of the failure
of a Bank to forward its counterpart or on account of an objection
by any Bank, then none of the Facility Agent, the Collateral Agent
or the Banks other than the Bank or Banks failing to forward such
counterpart or making such objection (to the extent such objection
was wrongful) shall have any liability on account of such failure
or non-issuance.
(d) Notice of Issuance. (i) The Issuing Bank shall
give the Facility agent written or telex notice, or telephonic
notice confirmed promptly thereafter in writing, of the issuance
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<PAGE> 22
and delivery of a Participated Letter of Credit, together with a
copy of each such Participated Letter of Credit as executed by the
Issuing Bank.
(ii) The Facility Agent shall give each Bank written or
telex notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance and delivery of a Participated Letter of
Credit or Syndicated Letter of Credit, together with a copy of each
such Letter of Credit, as executed by the Issuing Bank or the
Banks, as applicable.
(e) No Extension or Amendment. No Issuer may extend any
Letter of Credit or amend any Letter of Credit to increase the face
amount thereof unless the requirements of this Section 3.04 are met
as though a new Letter of Credit was being requested and issued.
If a Letter of Credit contains provisions for renewal absent
written notice from the Facility Agent or the Issuing Bank, as
applicable, (i) with respect to Participated Letters of Credit, the
Issuing Bank shall give the Facility Agent, at least thirty
Business Days prior thereto, written notice of the last Business
Day on which the Issuing Bank is entitled to give such notice of
non-renewal, and (ii) with respect to any Letter of Credit, the
Facility Agent shall determine, as of the close of business on the
third Business Day prior to the last Business Day on which the
Facility Agent or the Issuing Bank is entitled to give such notice
of non-renewal, whether extension of such Letter of Credit would be
authorized in accordance with the first sentence of this Section
3.04(e). The Facility Agent shall promptly notify the applicable
Issuers of the result of such determination. Neither the Facility
Agent nor the Issuing Bank shall be required to give any such
notice of non-renewal under this Section 3.04(e), and the Facility
Agent and the Issuing Bank shall be entitled to assume that the
applicable conditions set forth in Section 3.03 and Article V
hereof have been satisfied (except as set forth in this Section
3.04(e)), unless the primary loan officer of the Facility Agent or
the Issuing Bank, as the case may be, having day-to-day
responsibility for matters relating to this transaction or, if
different, the officer of the Facility Agent or Issuing Bank
designated under Section 12.05 for receiving notices sent to such
party, has actual knowledge to the contrary or unless it shall have
received notice to the contrary from a Bank on or before the third
Business Day prior to the last Business Day on which the Facility
Agent or the Issuing Bank is entitled to give such notice of non-
renewal. In the event a Letter of Credit contains provisions for
renewal as described above, and the Termination Date has occurred,
the Facility Agent or the Issuing Bank, as applicable, shall give
any required notice of non-renewal at the earliest possible date on
which the Facility Agent or the Issuing Bank is entitled to give
such notice. The Issuing Bank shall have no liability to the Banks
or the Agents with respect to the renewal or non-renewal of any
Participated Letter of Credit in the event that the Issuing Bank
has acted in accordance with the terms of this Agreement.
(f) Participation by Banks in Participated Letters of
Credit. Upon the issuance by the Issuing Bank of a Participated
Letter of Credit, each Bank shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank,
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<PAGE> 23
without recourse or warranty, an undivided interest and
participation to the extent of such Bank's Pro Rata Share in such
Participated Letter of Credit (including, without limitation, all
obligations of WGRC and rights of the Issuing Bank with respect
thereto and all security therefor, other than amounts owing to the
Issuing Bank under Section 4.02(d), Section 4.02(e) or Section
4.04); provided, however, that a Participated Letter of Credit
shall not be entitled to the benefits of this Section 3.04(f) or
Section 3.06(b) if the Issuing Bank shall have received written
notice from the Facility Agent or any Bank on or before the
Business Day immediately prior to the date of the Issuing Bank's
issuance of such Participated Letter of Credit that one or more of
the conditions contained in Article V is not then satisfied, and,
in the event the Issuing Bank receives such a notice, it shall have
no further obligation to issue any Participated Letter of Credit
until such notice is withdrawn by the Facility Agent or such Bank
or it receives written notice from the Facility Agent that such
condition has been effectively satisfied or waived in accordance
with the provisions of this Agreement. The Issuing Bank shall have
no liability to the Banks or the Agents with respect to the
issuance or nonissuance of any Participated Letter of Credit in the
event that the Issuing Bank has acted in accordance with the terms
of this Agreement.
SECTION 3.05. Reimbursement Obligations.
(a) Reimbursement. Notwithstanding any provisions
elsewhere to the contrary, (i) WGRC shall reimburse each applicable
Issuer for drawings under any Letter of Credit unless and until
such reimbursement obligations are extinguished as provided below,
(ii) such reimbursement obligations for drawings under a Letter of
Credit shall bear interest from the date of the relevant drawing
until the date of the Revolving Loans described in Section 2.08 at
the same rate at which interest would then accrue for any Base Rate
Loans hereunder and (iii) WGRC's obligations to reimburse the
applicable Issuers for the principal amount of all drawings under a
Letter of Credit shall be extinguished upon the making of any
Revolving Loans described in Section 2.08 or of payment of such
amount in full in cash.
(b) Duties of the Issuers. Any action taken or omitted
to be taken by the Facility Agent or any Issuer under or in connec-
tion with any Letter of Credit, if taken or omitted in the absence
of willful misconduct or gross negligence, shall not put the
Facility Agent or such Issuer under any resulting liability to any
Bank, any other Issuer, any beneficiary or proposed beneficiary of
a Letter of Credit, or (assuming that the Facility Agent or the
Issuing Bank, as applicable, has complied with the procedures
specified in Section 3.04) relieve any Issuer of its obligations
hereunder in respect of such Letter of Credit. In determining
whether to authorize payment under any Letter of Credit, the
Facility Agent or the Issuing Bank, as applicable, shall have no
obligation relative to the Banks or to WGRC other than to confirm
that any documents required to have been delivered under such
Letter of Credit appear to comply on their face with the require-
ments of such Letter of Credit and, with respect to the Facility
Agent, to provide notice as described in Section 3.06. Neither the
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<PAGE> 24
Facility Agent nor the Issuing Bank shall be liable for any error,
omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. WGRC agrees that any action
taken or omitted by the Facility Agent or the Issuing Bank under or
in connection with each Letter of Credit and the related drafts and
documents, if done in good faith, shall be binding upon WGRC and
shall not result in any liability on the part of the Facility Agent
or the Issuing Bank to WGRC.
(c) Reliance by Issuer. The Facility Agent and the
Issuing Bank shall be entitled to rely, and shall be fully
protected in relying upon any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document reasonably believed by the
Facility Agent and/or the Issuing Bank to be genuine and correct
and to have been signed, sent or made by the proper person or
persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Facility
Agent and/or the Issuing Bank.
SECTION 3.06. Payments under the Letters of Credit.
(a) Sharing of Syndicated Letter of Credit Payments. In
the event that the Facility Agent receives a request for draw under
any Syndicated Letter of Credit, then, unless WGRC shall have, at
its election, previously made available to the Facility Agent the
amount of such payment, the Facility Agent shall promptly notify
each Bank of the amount of such requested draw and shall promptly
forward to each Bank a copy of all documents accompanying such
requested draw. Each Bank shall, no later than 11:00 a.m. (Boston
time) on the third Business Day following the Facility Agent's
receipt of such request for draw, either (i) notify the Facility
Agent that it will dishonor such request and the reason for such
dishonor or (ii) unconditionally pay to the Facility Agent the
amount of such Bank's Pro Rata Share of such payment in Dollars and
in same day funds. The Facility Agent shall promptly pay such
amount, and any other amounts received by the Facility Agent
pursuant to this Section 3.06(a), to the beneficiary thereof. In
the event that the Banks or any Bank has refused to forward funds,
the Facility Agent shall, but only to the extent that funds were
not so forwarded, dishonor such request (in whole or in part, as
applicable). Each such payment by the Banks to or for the benefit
of the beneficiary shall constitute a Revolving Loan under this
Agreement in accordance with Section 2.08 and shall cause a
corresponding reduction in the Aggregate L/C Amount. Unless the
Facility Agent shall have received notice from a Bank on or prior
to 11:00 a.m. (Boston time) on the date of payment that such Bank
will not make available to the Facility Agent such Bank's portion
thereof, the Facility Agent may (but shall not be required to)
assume that each Bank has made its Pro Rata Share of the amount of
such payment available to the Facility Agent and the Facility Agent
may (but shall not be required to) make available to the
beneficiary of the Syndicated Letter of Credit a corresponding
amount in reliance upon such assumption. If and to the extent that
any Bank shall not have made its portion of such payment available
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to the Facility Agent and the Facility Agent has made available a
corresponding amount to the applicable beneficiary, such Bank and
WGRC each severally agrees to repay to the Facility Agent forthwith
on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the
applicable beneficiary until the date such amount is repaid to the
Facility Agent (i) in the case of WGRC, at the Base Rate and (ii)
in the case of such Bank, at (1) the Federal Funds Rate for such
date and the next succeeding Business Day and (2) the Federal Funds
Rate plus two percent (2%) for each day thereafter. Any such
repayment of principal by WGRC shall be made from Available Cash
pursuant to Section 9.07(c) hereof. If such Bank shall repay to
the Facility Agent such corresponding amount, such amount shall
constitute a Revolving Loan in accordance with the terms of this
Section 3.06 and Section 2.08.
(b) Payments under Participated Letters of Credit. (i)
In the event that the Issuing Bank receives a request for draw
under any Participated Letter of Credit which the Issuing Bank
decides, in its sole discretion, to honor, then, unless WGRC shall
have made available to the Issuing Bank the amount of such payment,
the Issuing Bank shall promptly notify each Bank of the amount of
such requested draw and shall promptly forward to each Bank a copy
of all documents accompanying such requested draw. Each Bank
shall, no later than 11:00 a.m. (Boston time) on the third Business
Day following the Issuing Bank's receipt of such request for draw,
unconditionally pay to the Issuing Bank the amount of such Bank's
Pro Rata Share of such payment in Dollars and in same day funds.
The Issuing Bank shall promptly pay such amount, together with any
other amounts received by the Issuing Bank pursuant to this
Section 3.06(b), to the beneficiary of such Participated Letter of
Credit in accordance with the terms thereof. Each such payment by
the Banks to the Issuing Bank shall constitute a Revolving Loan
under this Agreement in accordance with Section 2.08 and shall
cause a corresponding reduction in the Aggregate L/C Amount. If
and to the extent that any Bank shall not have made its portion of
such payment available to the Issuing Bank and the Issuing Bank has
made available a corresponding amount to the applicable beneficiary
(it being understood that the Issuing Bank's obligations to such
beneficiary under such Letter of Credit will not, unless the
beneficiary has otherwise agreed, be conditioned on the performance
by the Banks of their obligations under this Section 3.06(b)), such
Bank and WGRC each severally agrees to repay to the Issuing Bank
forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made
available to the applicable beneficiary until the date such amount
is repaid to the Facility Agent (1) in the case of WGRC, at the
Base Rate and (2) in the case of such Bank, at (x) the Federal
Funds Rate for such date and the next succeeding Business Day and
(y) the Federal Funds Rate plus two percent (2%) for each day
thereafter. Any such repayment of principal by WGRC shall be made
from Available Cash pursuant to Section 9.07(c) hereof. If such
Bank shall repay to the Issuing Bank such corresponding amount,
such amount shall constitute a Revolving Loan in accordance with
the terms of this Section 3.06 and Section 2.08.
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<PAGE> 26
(ii) In the event that any Bank fails to fund its Pro
Rata Share of any payment required to be made by such Bank to the
Issuing Bank in accordance with the provisions of this Section
3.06(b), until the earlier of such Bank's cure of all such failures
and the Collection Date, the proceeds of all amounts thereafter
paid or repaid to the Facility Agent by WGRC and otherwise required
to be applied to such Bank's share of any Obligations pursuant to
the terms of this Agreement shall be advanced to the Issuing Bank
by the Facility Agent on behalf of such Bank to cure, in full or in
part, such failure by such Bank, but shall nevertheless be deemed
to have been paid to such Bank in satisfaction of such Obligations.
Notwithstanding anything in this Agreement to the contrary:
(1) the foregoing provisions of this Section
3.06(b)(ii) shall apply only with respect to the proceeds
of payments of Obligations and shall not affect the
conversion or continuation of any Revolving Loans
hereunder; and
(2) a Bank shall be deemed to have cured its failure to
fund its Pro Rata Share of any such required payment in
respect of a Participated Letter of Credit at such time as an
amount equal to such Bank's Pro Rata Share (determined as of
the time of such Bank's failure to fund such required payment)
of such required payment plus any interest accrued thereon in
accordance with the provisions of this Agreement, is fully
funded to such Issuing Bank, whether made by such Bank itself,
by operation of the terms of this Section 3.06(b)(ii) or by
WGRC directly to the Issuing Bank.
(c) Sharing of Reimbursement Obligation Payments. If any
Issuer receives a payment on account of a draw under a Letter of
Credit, including any interest thereon, as to which the Facility
Agent or the Issuing Bank, as applicable, has received any payments
from the Banks pursuant to this Section 3.06, such Issuer shall
promptly pay to the Facility Agent and the Facility Agent shall
promptly pay to each Bank, in Dollars and in the kind of funds so
received, an amount equal to such Bank's Pro Rata Share thereof.
Each such payment shall be made by the Facility Agent on the
Business Day on which the Facility Agent receives the funds paid to
it pursuant to the preceding sentence, if received prior to 2:00
p.m. (Boston time) on such Business Day and otherwise on the next
succeeding Business Day, and each such payment, when received,
shall be applied by the Banks against the Revolving Loans.
(d) Obligations Irrevocable. The obligations of a Bank
to make payments to the Facility Agent or the Issuing Bank, as
applicable, with respect to a Letter of Credit, and the obligation
of WGRC to reimburse each Issuer for the amount of such payments
made by it in respect of any draws on the Letters of Credit, shall
be irrevocable, not subject to any qualification or exception
whatsoever and shall be made in accordance with, but not subject
to, the terms and conditions of this Agreement under all circum-
stances, including, without limitation, any of the following
circumstances:
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<PAGE> 27
(i) any lack of validity or enforceability of this
Agreement, any of the other Facility Documents, any
Letter of Credit or any related documents;
(ii) the existence of any claim, setoff, defense or
other right which WGRC or any Seller may have at any time
against a beneficiary named in a Letter of Credit or any
transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), or against
either Agent, any Bank, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated
transactions (including any underlying transactions
between WGRC or any other party and the beneficiary named
in any Letter of Credit);
(iii) any draft, certificate or any other document
presented under the Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inac-
curate in any respect;
(iv) any renewal, extension or modification of any Letter
of Credit so long as the terms of such Letter of Credit after
giving effect to such extension, renewal or modification would
be permitted hereunder;
(v) any lack of validity, effectiveness or sufficiency
of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part;
(vi) any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any
Letter of Credit or of the proceeds thereof;
(vii) any failure of the beneficiary of a Letter of Credit
to substantially comply with the conditions required in order
to draw upon any Letter of Credit;
(viii) the surrender or impairment of any security for
the performance or observance of any of the terms of any
of the Facility Documents; or
(ix) the occurrence of any Liquidation Event or
Unmatured Liquidation Event.
SECTION 3.07. Indemnification; Exoneration.
(a) Indemnification. In addition to amounts payable as
elsewhere provided in this Article III, WGRC hereby agrees, subject
to Section 3.07(d), to protect, indemnify, pay and save each Agent,
each Bank and each Issuer harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) which such Agent,
such Bank or such Issuer may incur or be subject to as a
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<PAGE> 28
consequence, direct or indirect, of the issuance of any Letter of
Credit. Any amounts owing by WGRC under this Section 3.07 shall be
payable subject to the terms of Sections 9.07(c) and 9.08 hereof.
(b) Assumption of Risk by WGRC. As between WGRC, the
Issuers, the Banks and the Agents, WGRC assumes all risks of the
acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of the Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions
of the Letter of Credit applications and Section 3.07(d) hereof,
the Agents, the Banks and the Issuers shall not be responsible:
(i) for 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 the Letters of Credit,
even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for
the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a 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) for 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;
(iv) for errors in interpretation of technical terms; (v) for any
loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit or
of the proceeds thereof; (vi) for the misapplication by the benefi-
ciary of a Letter of Credit of the proceeds of any drawing under
such Letter of Credit; and (vii) for any consequences arising from
a Force Majeure Event beyond the control of the Agents, the Banks
and the Issuers, including, without limitation, any act or
omission, whether rightful or wrongful, of any present or future de
jure or de facto governmental authority. None of the above shall
affect, impair, or prevent the vesting of any of the Issuers'
rights or powers under this Section 3.07.
(c) Exoneration. In furtherance and extension and not
in limitation of the specific provisions hereinabove set forth, any
action taken or omitted by any Bank under or in connection with the
Letters of Credit or any related certificates, if taken or omitted
in good faith, shall not put the Issuers, the Banks or the Agents
under any resulting liability to WGRC or its Affiliates or relieve
WGRC of any of its obligations hereunder to any such Person.
(d) Exceptions to Indemnity. Notwithstanding anything to
the contrary contained in this Section 3.07, WGRC shall have no
obligation to indemnify any Person or Issuer under this Section
3.07, and hereby waives no claims against any Person, Bank or
Issuer, in respect of any liability arising primarily out of (i)
the gross negligence or willful misconduct of such Person, (ii) the
wrongful dishonor by any Issuer of a proper demand for payment made
under a Letter of Credit issued by such Issuer, unless such
dishonor was made at the request of WGRC, or (iii) the failure of
any Issuer to exercise reasonable care in ascertaining whether the
documents required to be delivered under any Letter of Credit
appear on their face to be in compliance with the terms and
conditions of such Letter of Credit.
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ARTICLE IV
INTEREST, FEES AND OTHER PAYMENT TERMS
SECTION 4.01. Interest. (a) Subject to the provisions
of Section 4.01(d), interest shall accrue on the outstanding amount
of all Revolving Loans comprising part of a Base Rate Borrowing at
a rate per annum equal to the Alternate Base Rate. Such rate shall
be computed on the basis of the actual number of days elapsed
(including the first but excluding the day of payment) over a year
of 365 or 366 days, as the case may be.
(b) Subject to the provisions of Section 4.01(d),
interest shall accrue on all the outstanding amount of Eurodollar
Loans at a rate per annum equal to the Eurodollar Rate for the
Interest Period relating to such Eurodollar Loans plus five-eighths
of one percent (0.625%). Such rate shall be computed on the basis
of the actual number of days elapsed (including the first but
excluding the day of payment) over a year of 360 days.
(c) Accrued and unpaid interest with respect to any
Revolving Loan shall be payable in arrears on the last day of the
Interest Period relating thereto except as otherwise provided in
this Agreement.
(d) From and after the Business Day following the
Business Day upon which written notice of the occurrence of a
Liquidation Event from the Facility Agent is received by WGRC and
so long as such Liquidation Event continues, or at any time after
the [third] Settlement Date following the Termination Date,
interest will accrue on all Revolving Loans until paid at a per
annum rate equal to two percent (2.0%) above the otherwise
applicable rate described in Section 4.01(a) or (b) above (such
additional interest being payable subject to the terms of Sections
9.07(c) and 9.08 hereof).
SECTION 4.02. Fees. (a) WGRC shall pay to the Facility
Agent, for the benefit of the Banks, the fees described
hereinbelow:
(i) A non-usage fee (the "Non-Usage Fee") for the period
from and including the Effective Date until the Termination
Date, equal to four-tenths of one percent (0.40%) per annum
times the excess, if any, of (A) the Facility Amount over (B)
the sum of the Aggregate Loan Amount and the Aggregate L/C
Amount, computed on the basis of the actual number of days
elapsed (including the first but excluding the day of payment)
over a year of 365 or 366 days, as the case may be.
(ii) A letter of credit fee (the "L/C Fee") with respect
to each Letter of Credit for the period commencing upon
issuance thereof until the same shall have been surrendered or
expired, of five-eighths of one percent (0.625%) per annum on
the outstanding face amount of each such Letter of Credit,
computed on the basis of actual days elapsed (including the
first but excluding the day of payment), over a year of 360
days.
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<PAGE> 30
All of the foregoing specified fees shall be payable monthly in
arrears on each Settlement Date with respect to the prior
Collection Period and shall be forwarded by the Facility Agent
ratably to the Banks according to their Pro Rata Shares; provided,
that so long as any Departing Bank remains liable with respect to
any Syndicated Letter of Credit (notwithstanding the cash
collateralization thereof), such Departing Bank shall, except as it
may otherwise agree, receive a portion of the L/C Fee corresponding
to its portion of such Syndicated Letter of Credit, and the L/C Fee
owing to each other Bank shall be adjusted accordingly.
(b) WGRC shall cause the Financial Advisor on the
Effective Date to pay to each Bank, for such Bank's own account, an
up-front fee of .15% times the dollar amount of such Bank's
Commitment. All such up-front fees shall be paid on the Effective
Date.
(c) WGRC shall pay to Shawmut, for its own account in its
capacities as the Facility Agent and the Collateral Agent, such
other fees not described above as are specified in that certain
letter from Shawmut to WGRC dated May 20, 1994. Such fees shall
include the annual agents' fees described therein (the "Agent
Fee"), shall be due and payable at the times specified in such
letter, and shall not exceed the greater of (i) $100,000 per year
and (ii) .15% per annum times the Facility Amount.
(d) WGRC shall pay to each Issuer administrative fees in
connection with the issuance, amendment, draw or transfer of any
Letter of Credit, which fees shall, for each Issuer, not exceed $50
for each amendment or issuance of a Letter of Credit and $150 for
each draw or transfer. Each such fee shall be due and payable
concurrently with such issuance, amendment, draw or transfer, as
the case may be, of such Letter of Credit.
(e) WGRC shall pay to the Issuing Bank, for its own
account, a letter of credit issuance fee (the "L/C Fronting Fee")
of one-quarter of one percent (0.25%) times the face amount of each
Participated Letter of Credit. Such fee shall be due and payable
with respect to a Participated Letter of Credit upon the issuance,
and upon each renewal, of such Letter of Credit.
SECTION 4.03. Payments and Computations. (a) All
payments and prepayments on the Revolving Notes and all other
amounts to be paid or deposited by WGRC hereunder shall be paid to
the Facility Agent (or, where applicable, to the Issuing Bank) no
later than 2:00 p.m. (Boston time) on the day when due in lawful
money of the United States of America in same day funds, and any
payments received after such time shall be deemed to have been made
on the next Business Day. Whenever any payments to be made
hereunder shall be stated to be due on a day other than a Business
Day, the due date thereof shall be extended to the next succeeding
Business Day (and such extension of time shall in such case be
included in the computation of interest or fees as applicable).
The Facility Agent shall disburse amounts so received to the Banks
in same day funds (i) on the date received if such funds are
received at or prior to 2:00 p.m. (Boston time) and (ii) on the
next Business Day if such funds are received after 2:00 p.m.
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<PAGE> 31
(Boston time). If the Facility Agent fails to so disburse funds on
such Business Day, the Facility Agent shall pay to each Bank
interest on the funds owing to such Bank until the date such amount
is paid at (1) the Federal Funds Rate for such Business Day and the
next succeeding Business Day, and (2) the Federal Funds Rate plus
two percent (2%) for each day thereafter.
(b) WGRC will, to the extent permitted by law (and
without duplication to any interest payable pursuant to the
provisions of Section 4.01(d)) pay to the Facility Agent interest
on all amounts not paid or deposited when due hereunder, from and
after the Business Day immediately following the Business Day WGRC
receives notice thereof from the Facility Agent until such amounts
are paid in full, at 2% per annum above the Alternate Base Rate.
Such interest shall, subject to Sections 9.07(c) and 9.08, be
payable on demand and shall be for the account of, and distributed
by the Facility Agent to, the Banks and the Agents ratably in
accordance with their respective interests in such overdue amounts.
(c) All payments owing by WGRC under this Agreement
shall be made without deduction for any setoffs, counterclaims or
other amounts owed or allegedly owed to WGRC by any Bank, either
Agent or the Issuing Bank.
SECTION 4.04. Yield Protection. (a) Notwithstanding
any other provision herein, if, after the date hereof, either (i)
the adoption of any law, rule or regulation (including any
imposition or increase of reserve requirements) or any change after
the date hereof in the interpretation or administration of any such
law, rule or regulation by any governmental authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or (ii) the compliance by any Bank with any
guideline or request from any central bank or other governmental
authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having
the force of law), shall subject any Bank to any reserve (including
any imposed by the Board), special deposit, assessment or similar
requirement (including a reserve, special deposit, assessment or
similar requirement that takes the form of a tax) against assets
of, deposits with or for the account of, or credit extended by,
such Bank's Eurodollar Lending Office or impose any other condition
on any Bank affecting its Eurodollar Loans or Letters of Credit or
its obligation to make Eurodollar Loans or to issue or participate
in Letters of Credit hereunder, and as a result of either of the
foregoing there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining Eurodollar Loans
or issuing or maintaining any funding obligations in respect of
Letters of Credit, or there shall be a reduction in the amount
received or receivable by that Bank or its Eurodollar Lending
Office, then WGRC shall from time to time in accordance with the
provisions of Section 4.04(c), upon written notice from and demand
by such Bank (with a copy of such notice and demand to the Facility
Agent), pay to the Facility Agent for the account of such Bank
additional amounts sufficient to indemnify that Bank against such
increased cost or reduction in amount received or receivable;
provided, however, that this Section 4.04 shall not apply to any
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<PAGE> 32
additional cost or reduction in amounts received or receivable that
is attributable to taxes except as specified above in this Section
4.04.
(b) If any Bank (including the Facility Agent and the
Issuing Bank) shall reasonably determine that the adoption after
the date hereof of any law, rule or regulation regarding capital
adequacy or capital maintenance, or any change after the date
hereof in any of the foregoing 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 Bank (or any lending
office of such Bank) or any Bank's holding company with any request
or directive regarding capital adequacy or capital maintenance
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Bank's or such Bank's holding
company's capital as a consequence of this Agreement, the Revolving
Loans made by such Bank pursuant hereto or the Letters of Credit
issued (or participated in) by such Bank to a level below that
which such Bank or such Bank's holding company could have achieved
but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital
adequacy), then from time to time in accordance with the provisions
of Section 4.04(c), WGRC shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such Bank's
holding company for such reduction.
(c) Each Bank (or, as applicable, any Agent or the
Issuing Bank) shall promptly notify WGRC and the Facility Agent of
any event of which it has knowledge occurring after the date hereof
which will entitle such Bank to compensation pursuant to this
Section 4.04. A certificate of each Bank setting forth such amount
or amounts as shall be necessary to compensate such Bank as
specified in subsection (a) or (b) above, as the case may be
(including calculations thereof in reasonable detail) and the
adoption, change or compliance giving rise to such compensation
shall be delivered to WGRC and shall be conclusive absent
demonstrable error. WGRC shall pay each Bank the amount shown as
due on any such certificate delivered by it within 15 days after
its receipt of the same. Any Bank receiving any such payment shall
promptly make a refund thereof to WGRC if the law, regulation,
guideline or change in circumstances giving rise to such payment is
subsequently deemed or held to be invalid or inapplicable by a
final nonappealable order or decision and as a result thereof such
Bank shall not have incurred any increased costs or suffered any
reduction in the amounts received or receivable or the rate of
return on capital under this Agreement.
(d) Any Bank (or, as applicable, any Agent or the
Issuing Bank) claiming any additional amounts payable pursuant to
this Section 4.04 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to take any action to avoid or
minimize any amounts that otherwise may be payable by WGRC pursuant
to this Section 4.04, provided that such action would not, in the
good faith determination of the applicable affected party, be
otherwise disadvantageous to it.
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<PAGE> 33
(e) Notwithstanding the foregoing, WGRC shall not be
required to make any payments nor indemnify any Bank, the Issuing
Bank or any Agent under this Section 4.04 with respect to any
increased costs or reduced returns incurred by such Bank, the
Issuing Bank or such Agent more than ninety (90) days before the
date a request for payment or indemnification is delivered to WGRC.
For the purposes of this Section 4.04(e), increased costs and
reduced returns incurred on account of new laws, rules, regulations
or interpretations which are given retroactive effect shall be
deemed incurred on the date following the adoption of such law,
rule, regulation or interpretation upon which the Bank is first
notified of its increased costs or reduced returns by any
governmental authority; provided that in no event shall WGRC be
obligated to pay any increased costs or reduced returns relating to
periods more than eighteen months (18) months prior to the date of
such notification.
(f) All payments owing by WGRC under this Section 4.04
shall be made subject to the terms of Sections 9.07(c) and 9.08
hereof.
SECTION 4.05. Illegality; Unavailability. (a) In the
event that on any date any Bank shall have reasonably determined
(which determination shall be final and conclusive and binding upon
all parties) that the making or continuation of its Eurodollar
Loans has become unlawful by compliance by that Bank in good faith
with any law, governmental rule, regulation or order, then, and in
any such event, that Bank (an "Affected Bank") shall promptly give
notice (by telephone confirmed in writing) to WGRC and the Facility
Agent (a copy of which notice the Facility Agent shall promptly
transmit to each Bank) of that determination. The obligation of
the Affected Bank to make or maintain its Eurodollar Loans during
any such period shall be terminated at the earlier of the
termination of the Interest Period then in effect for each
Eurodollar Loan or when required by law and WGRC shall, no later
than the termination of the Interest Period in effect at the time
any such determination pursuant to this Section 4.05 is made or
earlier, when required by law, convert the Eurodollar Loans of the
Affected Bank into Base Rate Loans.
(b) If, prior to the beginning of any Interest Period,
either (1) the Majority Banks shall have given notice to WGRC and
the Facility Agent as set forth in subsection (a) above, or (2) the
Facility Agent shall have reasonably determined (which
determination shall be final and conclusive and binding upon all
parties) that: (i) Dollar deposits in the relevant amount and for
such Interest Period are not available in the interbank eurodollar
market or (ii) by reason of circumstances affecting the interbank
eurodollar market for the Facility Agent's Eurodollar Lending
Office, that adequate and fair means do not exist for ascertaining
the applicable Eurodollar Rate applicable to a Eurodollar
Borrowing, then, and in any such event, the Facility Agent shall
promptly give notice of such determination to WGRC and to each Bank
indicating the facts and circumstances giving rise to such
determination. Thereafter and continuing until the Facility Agent
shall notify WGRC that the circumstances giving rise to such
determination no longer exist, each Eurodollar Borrowing, will, on
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<PAGE> 34
the last day of the applicable Interest Period, automatically
convert into a Base Rate Borrowing, the obligation of the Banks to
make Eurodollar Loans shall be suspended and any Eurodollar
Borrowings requested to be made at such time shall be made as Base
Rate Borrowings.
(c) For purposes of this Section 4.05, a notice to WGRC
by any Bank shall be effective as to each of such Bank's
outstanding Eurodollar Loans, if lawful, on the last day of the
Interest Period currently applicable to such Eurodollar Loans; in
all other cases, such notice shall be effective on the date of
receipt by WGRC.
SECTION 4.06. Indemnity. WGRC shall compensate each
Bank, upon written request by that Bank (which request shall set
forth in reasonable detail the basis for requesting such amounts)
for all reasonable losses, expenses and liabilities (including any
interest paid by the Bank to lenders of funds borrowed by it to
make its Eurodollar Loans and any loss sustained by that Bank in
connection with the re-employment of such funds but excluding
taxes, which are not covered by this Section 4.06), which that Bank
may sustain with respect to Eurodollar Loans: (a) if for any
reason (other than a default or error by that Bank) a Eurodollar
Loan does not occur on a date specified therefor in the related
Notice of Borrowing or (b) if any payment or conversion, including,
without limitation, under Section 2.05, Section 2.07 or Section
2.09 hereof, of any such Bank's Eurodollar Loans occurs on a date
which is not the last day of the Interest Period applicable to such
Eurodollar Loan or on any date specified in a notice of payment
given by WGRC. All payments owing by WGRC under this Section 4.06
shall be made subject to the terms of Sections 9.07(c) and 9.08
hereof.
SECTION 4.07. Pro Rata Treatment. Each repayment of
principal and interest on the Revolving Loans, each payment of the
Non-Usage Fee, the L/C Fee, each reduction of the Commitments and
each conversion of any Borrowing to a Borrowing of another Type or
with a different Interest Period shall be allocated pro rata among
the Banks in accordance with their respective Pro Rata Shares
(except with respect to L/C Fees in connection with Departing
Banks, as provided in Section 4.02(a) hereof, and as set forth in
Sections 2.04(b) and 3.06(b)(ii) hereof). Each Bank agrees that in
computing such Bank's portion of any Borrowing to be made
hereunder, the Facility Agent may, in its discretion, round each
Bank's percentage of such Borrowing, computed in accordance with
Section 2.02, to the next higher or lower whole dollar amount. If
any Bank shall, through the exercise of a right of banker's lien,
set-off, counterclaim or otherwise, obtain payment with respect to
its Revolving Loans which results in its receiving more than its
Pro Rata Share of any payments described above or more than its
priority share of any payments to be made to it under Section 9.07
or 9.08 as applicable, then (A) such Bank shall be deemed to have
simultaneously purchased from each of the other Banks a share in
such other Banks' Revolving Loans so that the amount of the
Revolving Loans of all Banks shall be pro rata as otherwise set
forth above, (B) such Bank shall immediately pay to the other Banks
their Pro Rata Share of the payments otherwise received as
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<PAGE> 35
consideration for such purchase and (C) such other adjustments
shall be made from time to time as shall be equitable to insure
that all Banks share such payments ratably or according to the
priority set forth in such Section 9.07 or 9.08. If all or any
portion of any such excess payment is thereafter recovered from the
Bank which received the same, the purchase provided in this Section
4.07 shall be deemed to have been rescinded to the extent of such
recovery, without interest. WGRC expressly consents to the
foregoing arrangements and agrees that each Bank so purchasing a
portion of another Bank's loan may exercise all rights of payment
(including, without limitation, all rights of set-off, banker's
lien or counterclaim) with respect to such portion as fully as if
such Bank were the direct holder of such portion.
SECTION 4.08. Taxes. WGRC agrees that:
(i) Any and all payments by WGRC under this Agreement
shall be made free and clear of and without deduction for any and
all current or future taxes, stamp or other taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on the net income of,
franchise taxes imposed on, and taxes (other than withholding
taxes) imposed on the gross receipts or gross income of the
Facility Agent, the Collateral Agent, the Issuing Bank or any Bank
by the United States or by any jurisdiction under whose laws the
Facility Agent, the Collateral Agent, the Issuing Bank or any such
Bank is organized or in which the office through which it makes its
Revolving Loans or issues Letters of Credit is located or any
political subdivision of any such jurisdiction (all such
nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If WGRC shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to any Bank, the
Issuing Bank, the Collateral Agent or the Facility Agent, then the
sum payable shall be increased by the amount necessary to yield to
the Facility Agent, the Collateral Agent, the Issuing Bank or such
Bank (after payment of all Taxes) an amount equal to the sum it
would have received had no such deductions been made.
(ii) Whenever any Taxes are payable by WGRC, or whenever
any Agent, Issuing Bank or Bank has notified WGRC that such Person
has paid or owes any Taxes payable by WGRC under this Section 4.08,
as promptly as possible thereafter, WGRC shall send to the Facility
Agent for its own account or for the account of any Bank, the
Issuing Bank or the Collateral Agent, as the case may be, a
certified copy of an original official receipt showing payment
thereof or such other evidence of such payment as may be available
to WGRC and acceptable to the taxing authorities having
jurisdiction over such Agent, the Issuing Bank or such Bank, as
applicable. If WGRC fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Facility
Agent the required receipts or other required documentary evidence,
(a) the applicable Agent, Issuer or Bank may pay such Taxes on
behalf of WGRC, and (b) WGRC shall indemnify the Agents, the
Issuers and the Banks, as applicable, for such Taxes, for any
incremental taxes, interest or penalties that may become payable by
such party as a result of any such failure, and for reasonable
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<PAGE> 36
counsel fees and out-of-pocket expenses arising from any such
failure.
(iii) On or before the date it becomes a party to this
Agreement and on any extension of its Commitment, each Bank (and,
to the extent applicable, the Issuing Bank and any Agent) that is
organized under the laws of a jurisdiction outside the United
States shall deliver to WGRC such certificates, documents or other
evidence, as required by the Internal Revenue Code or Treasury
Regulations issued pursuant thereto, including (i) two original
copies of Internal Revenue Service Form 1001 or Form 4224 or
successor applicable form, properly completed and duly executed by
such Bank, the Issuing Bank or such Agent certifying in each case
that such party is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes, and (ii) an original copy of Internal Revenue
Service Form W-8 or W-9 (or applicable successor form) properly
completed and duly executed by such party.
(iv) Any obligation of WGRC to pay any additional amounts
to any Bank, the Issuing Bank or any Agent in respect of United
States Federal withholding tax pursuant to this Section 4.08 shall
be net of any credits in respect of other tax liabilities of such
Person which credits relate to or result from such withholding tax
(as determined by such Person in its reasonable discretion, it
being understood that nothing in this Agreement shall impose any
duty on any Bank to disclose its internal tax records as a
condition to reimbursement under this Section).
(v) Any Bank (or as applicable, the Issuing Bank or any
Agent) claiming any additional amounts payable pursuant to this
Section 4.08 shall use reasonable efforts (consistent with legal
and regulatory restrictions) to take any action to avoid or
minimize any amounts that otherwise may be payable by WGRC pursuant
to this Section 4.08, including filing any certificate or document
or changing the jurisdiction of its applicable office from which it
funds any Revolving Loans or issues Letters of Credit, provided
that such action would not, in the good faith determination of the
applicable affected party, be otherwise disadvantageous to it.
(vi) Notwithstanding the foregoing, WGRC shall not be
required to make any payments nor indemnify any Bank, the Issuing
Bank or any Agent under this Section 4.08 with respect to any Taxes
paid by such Bank, the Issuing Bank or such Agent more than ninety
(90) days before the date a request for payment or indemnification
is delivered to WGRC (it being understood that the date of payment
of such Taxes, and not the time period to which such Taxes may
relate, shall begin the running of the ninety (90) day period
described above).
(vii) All payments owing by WGRC under this Section 4.08
shall be made subject to the terms of Sections 9.07(c) and 9.08
hereof.
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ARTICLE V
CONDITIONS OF REVOLVING LOANS AND LETTERS OF CREDIT
SECTION 5.01. Conditions Precedent to Initial Borrowing
or Letter of Credit. The obligation of the Banks to make their
initial Revolving Loans hereunder and the obligation of the Issuers
to issue any Letters of Credit hereunder are each subject to satis-
faction of the conditions precedent that the Facility Agent shall
have received, on or before the Effective Date, all of the
following, each fully executed by all signatories thereto (where
applicable) and in form and substance satisfactory to the Facility
Agent;
(i) this Agreement;
(ii) the Revolving Notes;
(iii) the Receivables Sale Agreement;
(iv) certificates of the Secretaries or Assistant
Secretaries of WGRC and each Initial Seller, certifying in
each case (A) the names and true signatures of the officers
authorized to sign the Facility Documents to be delivered by
such party pursuant hereto or thereto (on which certificate
the Agents and the Banks may conclusively rely until such time
as the Facility Agent shall receive a revised certificate
meeting the requirements of this clause (iv)(A)), (B) that
attached thereto is a true and complete copy of the
certificate or articles of incorporation and by-laws of such
corporation as in effect on the date of such certification and
(C) that attached thereto are true and complete copies of
resolutions by such corporation's Board of Directors approving
the execution, delivery and performance of the Receivables
Sale Agreement and all other Facility Documents to which such
corporation is a party;
(v) a certificate executed by an officer of WGRC
certifying that as of the Effective Date, all of the represen-
tations and warranties contained in Article VI hereof are true
and accurate in all respects with the same force and effect as
though such representations and warranties had been made as of
such time;
(vi) a certificate executed by an officer of each Initial
Seller certifying that as of the Effective Date, all of the
representations and warranties contained in Article III of the
Receivables Sale Agreement are true and accurate in all
respects with the same force and effect as though such
representations and warranties had been made as of such time;
(vii) a copy of WGRC's Certificate of Incorporation,
certified by the Secretary of State of Delaware;
(viii) a copy of the Certificate of Incorporation or other
corporate charter documents for each Initial Seller, certified
by the appropriate Secretary of State or Commonwealth;
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<PAGE> 38
(ix) certificates relating to the good standing of WGRC,
Wyman and the other Initial Sellers from the Secretaries of
State of the States in which each such Person has its chief
executive office or inventory;
(x) copies of UCC lien search reports, dated a date
reasonably close to the Effective Date, disclosing no
effective financing statements or other instruments on file
with respect to the Collateral except for (i) those in favor
of the Collateral Agent and (ii) financing statements which
will be terminated as of the Effective Date;
(xi) copies of UCC financing statements, in form and
substance satisfactory to the Facility Agent, as filed with
the appropriate offices deemed necessary by the Facility Agent
to perfect (A) the transfers of interests in Purchased Assets
under the Receivables Sale Agreement and (B) the grant of
security in the Collateral under this Agreement;
(xii) evidence that any financing statements described in
clause (x) above filed in favor of any Person other than the
Collateral Agent have been (or will be, concurrently with the
initial Funding Date or issuance of L/Cs hereunder)
terminated;
(xiii) favorable opinions of Goodwin, Procter & Hoar, and
Sidley & Austin, counsel for Wyman and WGRC, in form and
substance satisfactory to the Agents, the Banks and to the
Rating Agency, including, without limitation, opinions as to
enforceability and the perfection under the UCC of the Liens
in the Receivables created in favor of WGRC and Liens in the
Collateral created in favor of the Banks as described in
clause (xi) above, together with a favorable memorandum from
Sidley & Austin, counsel for Wyman and WGRC, in form and
substance satisfactory to the Agents, the Banks and to the
Rating Agency, relating to the priority of the Liens described
above;
(xiv) a favorable opinion of Goodwin, Procter & Hoar,
counsel for Wyman and WGRC, in form and substance satisfactory
to the Agents, the Banks and to the Rating Agency, including,
without limitation, opinions as to true sale and substantive
consolidation issues relating to the treatment of the
Receivables purchased by WGRC as property of WGRC in the event
of a bankruptcy of any Seller;
(xv) a favorable opinion of Wallace F. Whitney, Jr., Vice
President, General Counsel and Clerk of Wyman, in form and
substance satisfactory to the Agents, the Banks and to the
Rating Agency, including, without limitation, opinions as to
corporate organization, authority, execution and the absence
of conflict;
(xvi) a rating letter from the Rating Agency indicating a
rating of not less than AAA with respect to the payment of
principal and non-default interest under the Facility;
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<PAGE> 39
(xvii) a letter from Ernst & Young, satisfactory in form
and substance to the Facility Agent, with respect to the
information contained in the Information Memorandum relating
to the Receivables;
(xviii) Lock-Box Agreements executed by the Sellers, WGRC
and each Lock-Box Bank;
(xix) such sublicenses and assignments as the Facility
Agent shall require with regard to all computer and data
recovery programs licensed to any Seller and/or WGRC and used
in the collection of the Receivables;
(xx) evidence of the capitalization of WGRC in accordance
with the terms of the Receivables Sale Agreement and this
Agreement;
(xxi) evidence of the payment in full of all fees owing
to the Banks as of the Effective Date; and
(xxii) such other documents and instruments as the
Facility Agent may reasonably request relating to the Facility
Documents and the transactions contemplated hereby.
SECTION 5.02. Conditions Precedent to Each Revolving
Loan and Letter of Credit. The obligation of the Banks to make any
Revolving Loans on any day (including those comprising the initial
Borrowing) and the obligation of the Issuers to issue, extend or
renew any Letters of Credit on any day shall be subject to the
Facility Agent's receipt of the Daily Report for such day and to
the conditions precedent that on the Funding Date of such Borrowing
or the issuance date or applicable date with respect to the
extension or renewal of such Letter of Credit, before and after
giving effect thereto and to the application of any proceeds there-
from, the following statements shall be true:
(i) the representations and warranties contained in
Article VI hereof and all representations and warranties of
the Sellers in the Receivables Sale Agreement (except for
representations and warranties which speak as of a specific
date only), are true and accurate as of such date in all
material respects with the same force and effect as though
such representations and warranties had been made as of such
time;
(ii) no event has occurred and is continuing, or would
result from such Borrowing, issuance, extension or renewal,
which constitutes a Liquidation Event or an Unmatured
Liquidation Event;
(iii) the Aggregate Net Outstandings, after giving
effect to any such Revolving Loan or the issuance, extension
or renewal of any such Letter of Credit, shall not be greater
than the Base Amount;
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(iv) the Aggregate L/C Amount, after giving effect to
the issuance, extension or renewal of any such Letter of
Credit, shall not be greater than the L/C Facility Sub-Amount;
and
(v) the sum of the Aggregate Loan Amount and the
Aggregate L/C Amount, after giving effect to any such
Revolving Loan or the issuance, extension or renewal of
any such Letter of Credit, shall not be greater than the
Facility Amount.
Each of (i) the giving of the applicable Notice of Borrowing and
the acceptance by WGRC of the proceeds of any such Borrowing and
(ii) the request by WGRC for issuance, extension or renewal of a
Letter of Credit and delivery of such Letter of Credit to WGRC or
to the beneficiary designated by WGRC, shall each constitute a
representation and warranty by WGRC that, as of the Funding Date or
issuance date, as applicable, before and after giving effect to any
such Borrowing or issuance, extension or renewal and to the
application of any proceeds therefrom, the foregoing statements are
true.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of WGRC.
WGRC represents and warrants that:
(a) Organization; Qualification. WGRC is a corporation
duly organized, validly existing and in good standing under the
laws of the state of Delaware. WGRC has all governmental licenses,
authorizations, consents and approvals required to carry on its
business, to do business as a foreign corporation and is in good
standing in each jurisdiction in which its business is now
conducted, except where the absence of such licenses,
authorizations, consents, approvals or good standing would not have
a Material Adverse Effect.
(b) Corporate Authority. WGRC has corporate power and
authority to execute and deliver this Agreement, to borrow money
and to grant a security interest hereunder, to execute and deliver
the Facility Documents to which it is a party and to perform its
obligations hereunder and thereunder and all such action has been
duly and validly authorized by all necessary corporate proceedings
on its part.
(c) Execution; Binding Effect. This Agreement and each
of the other Facility Documents to which WGRC is a party have been
duly and validly executed and delivered by WGRC and constitute the
legal, valid and binding obligations of WGRC enforceable against
WGRC in accordance with their respective terms.
(d) Authorizations. No authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body, agency, official or other Person is
required for the due execution, delivery and performance by WGRC of
this Agreement, any other Facility Document or any other agreement,
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document or instrument delivered hereunder or thereunder except for
the filing of financing statements pursuant to the UCC required to
perfect the security and/or ownership interests granted hereunder,
under the Receivables Sale Agreement (all of which filings have
been duly made and are, and on or prior to each Purchase, will be,
in full force and effect), and for other consents which have been
duly obtained. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(e) Absence of Conflicts. Neither the execution and
delivery of this Agreement or any other Facility Document to which
WGRC is a party, nor consummation of the transactions herein or
therein contemplated nor performance of or compliance with the
terms and conditions hereof or thereof will (a) violate or conflict
with any law, rule or regulation applicable to WGRC or any of its
properties, (b) violate, conflict with or result in a breach of or
a default under (i) the Certificate of Incorporation or By-laws of
WGRC, (ii) any agreement or instrument to which WGRC is a party or
by which it or any of its properties (now owned or hereafter
acquired) may be subject or bound or (iii) any order, writ,
judgment, award, injunction or decree binding on or affecting WGRC
or its property (now owned or hereafter acquired) or (c) except for
Liens created pursuant to the Facility Documents, result in the
creation or imposition of any Lien in favor of any other party upon
any property (now owned or hereafter acquired) of WGRC.
(f) Perfected Security Interest. Upon the making of the
initial Revolving Loan and/or the issuance of the initial Letter of
Credit hereunder, and at all times from the Effective Date through
the Collection Date, the Banks will have a legal, valid, perfected
and enforceable Lien upon and security interest in the Collateral
which Lien and security interest is prior in right to all other
Liens thereon (except Permitted Liens) and such Collateral shall
not be subject to any other Liens (except for Permitted Liens).
(g) Consideration for Purchases by WGRC. WGRC shall
have given reasonably equivalent value to the Sellers in
consideration for the transfer to WGRC of the Receivables and
Related Security under the Receivables Sale Agreement and no such
transfer shall have been made for or on account of an antecedent
debt owed by any Seller to WGRC.
(h) Accuracy of Information. All written information,
exhibits, documents, records, Daily Reports, Settlement Statements,
certificates, reports, financial statements and similar writings
(including, without limitation, the Information Memorandum)
(collectively, the "Written Information") furnished by WGRC to the
Facility Agent or the Banks at any time pursuant to any requirement
of, or in response to any request of any such party under, this
Agreement or any other Facility Document or any transaction
contemplated hereby or thereby, have been, and all such Written
Information hereafter furnished by WGRC to such parties will be,
true and accurate in all material respects on the date as of which
any such Written Information was or will be delivered, and shall
not omit to state any material facts or any facts necessary to make
the statements contained therein not materially misleading in light
of the circumstances under which they were made.
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(i) Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any governmental
authority now pending or, to the knowledge of WGRC, threatened
against or affecting WGRC or any property or rights of WGRC which
purport to challenge the legality, validity or enforceability of
this Agreement or any other Facility Document or which may
materially impair the ability of WGRC to carry on business substan-
tially as now being conducted or which may materially adversely
affect the condition (financial or otherwise), operations or
properties of WGRC.
(j) Governmental Regulations. WGRC is not a "holding
company", nor a "subsidiary company" or "affiliate" thereof, within
the meaning of the Public Utility Holding Company Act of 1935, as
amended, and WGRC is not an "investment company" registered or
required to be registered under the Investment Company Act of 1940,
as amended, or otherwise subject to any other similar federal or
state statute or regulation limiting its ability to incur
indebtedness.
(k) Margin Regulations. WGRC is not 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" (as each of the quoted terms is defined or used
in Regulation G, T, U or X). No part of the proceeds of any of the
Revolving Loans has been used for so purchasing or carrying margin
stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation G, T, U or X.
(l) Separate Corporate Existence. WGRC is operated as an
entity with assets and liabilities distinct from those of the
Sellers and any other Affiliates of WGRC, and WGRC hereby
acknowledges that the Agents and the Banks are entering into the
transactions contemplated by this Agreement in reliance upon WGRC's
identity as a separate legal entity from each Seller and each such
Affiliate. Since its incorporation, WGRC has been (and will be)
operated in such a manner as to comply with the covenants set forth
in Section 7.09.
(m) Investments. WGRC has no Investments other than
Permitted Investments and does not own or hold, directly or
indirectly, any capital stock or equity security of, or any equity
interest in, any Person.
(n) Facility Documents. The Receivables Sale Agreement
is the only agreement pursuant to which WGRC purchases Receivables
or any other accounts receivable, and the Facility Documents
delivered to the Facility Agent represent all material agreements
between any Seller, on the one hand, and WGRC on the other. WGRC
has furnished to the Facility Agent true, correct and complete
copies of each Facility Document to which WGRC is a party, each of
which is in full force and effect. Neither WGRC nor any Affiliate
party thereto is in default of any of its obligations thereunder in
any material respect. Upon the Purchase of each Receivable
pursuant to the Receivables Sale Agreement, WGRC shall be the
lawful owner of, and have good title to, such Receivable and all
Purchased Assets relating thereto, free and clear of any Liens
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(except for Liens created hereunder and Permitted Liens). All such
Purchased Assets are purchased without recourse to the Sellers
except as described in the Receivables Sale Agreement. The
Purchases of the Purchased Assets by WGRC constitute valid and true
sales and transfers for consideration (and not merely a pledge of
such Purchased Assets for security purposes), enforceable against
creditors of the Sellers, and no Purchased Assets shall constitute
property of any Seller.
(o) Business. Since its incorporation, WGRC has
conducted no business other than the purchase of Receivables and
related assets from the Sellers under the Receivables Sale
Agreement, the incurrence of Indebtedness under this Agreement to
finance such Purchases, and such other activities as are incidental
to the foregoing.
(p) Lock-Box Accounts. The names and addresses of all
the Lock-Box Banks, together with the account numbers of the Lock-
Box Accounts, are set forth on Exhibit 6.01(p) hereto (or as
hereafter notified to the Facility Agent in accordance with Section
8.11), and each Lock-Box Bank has executed a Lock-Box Agreement.
All Obligors have been instructed to remit payment on the
Receivables to a Lock-Box Account or, via wire transfer, directly
to the Collection Account.
(q) Ownership of WGRC. One hundred percent (100%) of
the outstanding capital stock of WGRC is directly owned (both
beneficially and of record) by the Sellers. Such stock is validly
issued, fully paid and nonassessable and there are no options,
warrants or other rights to acquire capital stock from WGRC.
(r) Taxes. WGRC has filed or caused to be filed all
Federal, state and local tax returns which are required to be filed
by it, and has paid or caused to be paid all taxes shown to be due
and payable on such returns or on any assessments received by it,
other than any taxes or assessments, the validity of which are
being contested in good faith by appropriate proceedings and with
respect to which WGRC has set aside adequate reserves on its books
in accordance with GAAP and which proceedings would not have a
Material Adverse Effect.
(s) Locations. The principal place of business and
chief executive office of WGRC are located at its address set forth
in Exhibit 7.08 hereto and the locations of the offices where the
Records and computer software are kept are listed on such exhibit
(or at such other locations, notified to the Facility Agent in
accordance with Section 7.08, with respect to which all action
required by such Section 7.08 has been taken and completed).
(t) Other Names. During the past five years WGRC has had
no trade names, fictitious names, assumed names, "doing business
as" names or other names under which it has done or is doing
business.
(u) Solvency. On the Effective Date, on each Funding
Date and on the date of each issuance of a Letter of Credit
hereunder, WGRC: (i) is not "insolvent" (as such term is defined
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in Secion 101(32)(A) of the Bankruptcy Code, (ii) is able to pay its
debts as they mature; and (iii) does not have unreasonably small
capital for the business in which it is engaged or for any business
or transaction in which it is about to engage.
(v) Software. Except as set forth in the Receivables
Sale Agreement, WGRC and the Collateral Agent, as assignee of WGRC,
each has (or will have, concurrently with the effectiveness hereof)
an enforceable right (whether by license, sublicense or assignment)
to use all of the computer software used to account for the
Receivables to the extent necessary to administer the Receivables.
ARTICLE VII
AFFIRMATIVE COVENANTS
WGRC covenants and agrees that, until the expiration or
termination of the Commitments and thereafter until the Collection
Date, unless the requisite Banks required under Section 12.01 shall
otherwise consent in writing, it will:
SECTION 7.01. Reports; Certificates; Other Information.
Furnish or cause to be furnished to the Facility Agent, in
sufficient copies to be forwarded to each Bank (or when stated, to
the Facility Agent only) (and, with respect to the reports
described in Section 7.01(c) and 7.01(g)(i), with a copy thereof to
the Rating Agency):
(a) Annual Reports. As soon as available and in any
event within one-hundred five (105) days after the end of each
fiscal year of WGRC, a copy of the annual statements of income
and cash flows of WGRC for such fiscal year and the related
balance sheet as at the end of such fiscal year, setting forth
in each case in comparative form the corresponding figures for
the preceding fiscal year and prepared in accordance with GAAP
consistently applied (except for such changes in application
which are approved by WGRC's independent public accountants
and disclosed therein), accompanied by an unqualified opinion
from Ernst & Young or other independent certified public
accountants of recognized national standing selected by WGRC
or otherwise reasonably acceptable to the Facility Agent
(which accountants may also provide services to Wyman and
Wyman's other Subsidiaries), together with a certificate from
WGRC's independent public accountants confirming that, in
conducting such audit, nothing came to their attention which
caused them to believe that WGRC was not in compliance with
this Agreement insofar as it relates to accounting matters,
with the understanding that such audit was not directed
primarily toward obtaining knowledge of such noncompliance;
(b) Quarterly Reports. As soon as available and in any
event within sixty (60) days after the end of the first three
fiscal quarters of each fiscal year of WGRC, a copy of (A) the
unaudited statement of income and cash flows of WGRC for such
fiscal quarter and for the period from the beginning of the
respective fiscal year to the end of such fiscal quarter; and
(B) an unaudited balance sheet of WGRC as at the end of such
fiscal quarter; setting forth in each case in comparative form
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the corresponding figures for the preceding fiscal year and
all of the foregoing to be prepared in accordance with GAAP
consistently applied (except for such changes in application
which are approved by WGRC's financial officer preparing such
statements and disclosed therein);
(c) Annual Accountants' Report. Within one-hundred five
(105) days after the end of each fiscal year of WGRC, a report
with respect to the Facility Documents by Ernst & Young or any
other firm of nationally recognized independent accountants
reasonably acceptable to the Facility Agent (who may also
render other services to WGRC, Wyman on their Affiliates);
provided, however, that if the Liquidation Period shall have
occurred by reason of an event described in clause (ii),
(iii), (iv) or (v) of the definition thereof, then the
Majority Banks may direct WGRC to replace such accountants
with another firm of nationally recognized independent
accountants selected by the Majority Banks and reasonably
acceptable to WGRC. Each such report shall set forth the
procedures performed, which procedures shall be substantially
in compliance with the agreed upon procedures described in the
letter delivered pursuant to Section 5.01(xvii);
(d) Certificates. Contemporaneously with the furnishing
of a copy of each annual and quarterly report provided for in
subsections 7.01(a) and (b), respectively, a certificate dated
the date of delivery and signed by a Responsible Officer of
WGRC, which certificate shall state that said financial
statements fairly present the financial position and results
of operations of WGRC in accordance with GAAP consistently
applied (except for such changes in application which are
approved by WGRC's independent public accountants or, in the
case of the quarterly reports, by such officer and further
subject to normal year-end adjustments) and that such
Responsible Officer has reviewed the relevant terms of this
Revolving Credit Agreement and has made, or caused to be made
under such Responsible Officer's supervision, a review of
WGRC's activities during the period covered by the statements
then being furnished, and that the review has not disclosed
the existence of a Liquidation Event or Unmatured Liquidation
Event, or if there is such an event, describing it and the
steps, if any, taken or being taken to cure it;
(e) Notice of Liquidation Event and Litigation. As soon
as possible and in any event within two Business Days upon
learning of the occurrence of any of the following, written
notice thereof (with a copy concurrently sent to the Rating
Agency), describing the same and the steps being taken by WGRC
with respect thereto: (a) a Liquidation Event or Unmatured
Liquidation Event, or (b) the institution against WGRC of, or
any adverse determination in, any litigation, arbitration
proceeding or governmental proceeding;
(f) ERISA Events. Promptly after the filing or
receiving thereof, copies of all reports and notices with
respect to any Reportable Event defined in Article IV of ERISA
(other than any such Reportable Event for which the Pension
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Benefit Guaranty Corporation has waived the 30-day notice
requirement) which WGRC or any ERISA Affiliate files under
ERISA with the Internal Revenue Service or the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or which
WGRC or any ERISA Affiliate receives from the Pension Benefit
Guaranty Corporation;
(g) Reports under Receivables Sale Agreement. Promptly
upon receipt thereof, copies of (i) all annual and quarterly
financial statements and monthly Settlement Statements
delivered to WGRC by the Sellers or by the Servicer pursuant
to the Receivables Sale Agreement (each such Settlement
Statement to be delivered no later than the Business Day of
WGRC's receipt but in no event later than the applicable
Reporting Date) and (ii) (to the Facility Agent only) all
Daily Reports (to be delivered no later than the Business Day
of WGRC's receipt) and all other reports and other written
information not specified above which are required to be
delivered by the Sellers or the Servicer to WGRC pursuant to
the terms of the Receivables Sale Agreement; and
(h) Bi-Annual Legal Opinions. On or within thirty (30)
days prior to the second anniversary of the Effective Date,
and on each successive second anniversary of such date, a
legal opinion, in form and substance reasonably satisfactory
to the Facility Agent, that the ownership interests of WGRC in
the Receivables and the security interests of the Collateral
Agent in the Collateral, to the extent they may be perfected
by financing statements, remain perfected.
(i) Other Information. Promptly, from time to time,
such other information, documents, records or reports
respecting the Purchased Assets, including, without
limitation, the Receivables, or the condition or operations,
financial or otherwise, of WGRC, any Agent or any Bank or
their respective agents or representatives may from time to
time reasonably request.
SECTION 7.02. Inspection. At any time and from time to
time during WGRC's normal business hours, with reasonable notice,
permit the Facility Agent, its permitted assigns, or their
respective agents or representatives, (i) to examine and make
copies of and abstracts from all books, records and documents
(including, without limitation, computer tapes and discs) in the
possession or under the control of WGRC relating to the Receivables
or the other Purchased Assets, and (ii) to visit the offices and
properties of WGRC for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to
the Receivables or the other Purchased Assets, or WGRC's perform-
ance hereunder with any of the officers or employees of WGRC having
knowledge of such matters. WGRC agrees that representatives from
the other Banks shall be permitted to accompany the Facility Agent
on any such inspection or visit and to participate in any such
discussion. WGRC agrees to instruct its independent accountants to
cooperate with any reasonable request of the Facility Agent, its
permitted assigns, or their respective agents or representatives,
in connection with the performance of such accountants' routine
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<PAGE> 47
verification procedures with respect to the Receivables or the
other Collateral. The Facility Agent, its assigns, agents or
representatives, shall also be permitted to verify the validity,
amount or any other matter relating to any Receivable; provided,
however, that none of the Facility Agent, the Banks nor their
respective assigns shall, unless a Liquidation Event has occurred
and is continuing, notify any or all of the Obligors of the
security interests granted hereunder or direct such Obligors to
make payments under any Receivables directly to the Banks or their
designees. Without limiting the foregoing, WGRC shall, from time
to time during WGRC's normal business hours, upon request of the
Facility Agent (or its permitted assigns, or their respective
agents, or representatives), permit certified public accountants or
other auditors selected by the Person making such request to
conduct, a review of WGRC's books and records relating to the
Purchased Assets and the Facility Documents; provided that unless a
Liquidation Event has occurred and is continuing such review shall
not be conducted more than twice during any calendar year,
provided, however, that an additional review of each new Seller
added to the Facility pursuant to Section 2.06 of the Receivables
Sale Agreement may be conducted during such calendar year and shall
not be counted towards such limit. The costs and expenses of the
first such review of WGRC's books and records in any calendar year
and the initial review of any new Seller during such calendar year
shall not exceed $20,000 for each such review (subject to an annual
increase at the Facility Agent's election for any subsequent review
not to exceed 5% in any year and provided that the costs and
expenses for the initial review of Cameron shall not exceed
$12,500) and shall be borne by the Servicer as part of its duties
which are compensated by the Servicer Fee, and the costs and
expenses of any further reviews in any calendar year shall be borne
by the Banks ratably in accordance with their Pro Rata Shares;
provided that after the occurrence and during the continuation of a
Liquidation Event, all such reviews shall be borne by the Servicer
as part of its duties which are compensated by the Servicer Fee.
Upon the request of the Facility Agent, WGRC shall exercise
inspection, audit and other rights provided for in the Receivables
Sales Agreement, with respect to review and access to the Records
of any Seller and the furnishing of information by such Seller
relating to such Receivables.
SECTION 7.03. Books and Records of WGRC. Maintain and
implement administrative and operating procedures reasonably
necessary in the performance of its obligations hereunder (includ-
ing, without limitation, an ability to recreate records evidencing
the Receivables in the event of the destruction of the originals
thereof), and keep and maintain at all times, or cause to be kept
and maintained at all times, all documents, books, records,
accounts and other information relating to the Receivables and the
Purchased Assets reasonably necessary or advisable for the
collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each
Receivable and all collections of and reductions or adjustments to
each Receivable).
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SECTION 7.04. Corporate Existence. Observe all
corporate procedures required by its Certificate of Incorporation
and By-Laws and do or cause to be done all things necessary to
preserve and maintain its corporate existence, good standing
(except where the failure to be in good standing would not have a
Material Adverse Effect), material rights, licenses, permits and
franchises.
SECTION 7.05. Compliance with Laws. Comply in all
material respects with all applicable laws, rules, regulations,
writs, judgments, injunctions, decrees, awards and orders with
respect to it, its business and properties.
SECTION 7.06. Obligations and Taxes. Pay all its
indebtedness and obligations promptly and in accordance with their
terms and pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it or in respect of its
property, before the same shall become in default, as well as all
lawful claims for labor, materials and supplies or otherwise which,
if unpaid, might become a Lien or charge upon such properties or
any part thereof (except such indebtedness, obligations, taxes,
assessments, governmental charges and levies and claims being
contested in good faith by appropriate proceedings and for which
WGRC has set aside adequate reserves therefor).
SECTION 7.07. Facility Documents. Comply in all
material respects with the terms of and employ the procedures
outlined in and enforce the obligations of the Sellers and the
Servicer under the Receivables Sale Agreement, and all of the other
Facility Documents to which it is a party.
SECTION 7.08. Location of Records. Keep its principal
place of business and chief executive office, and the offices where
it keeps its books, records and documents concerning the
Receivables (including all original documents relating thereto) at
the addresses specified in Exhibit 7.08 hereto, or, upon thirty
days' prior written notice to the Facility Agent, at such other
locations in the United States where all action required to
maintain the perfection of WGRC's ownership interest in the
Purchased Assets and the Banks' security interests in the
Collateral shall have been taken and completed. WGRC shall, in the
case of any change in its principal place of business and chief
executive office, WGRC shall also provide, prior to such change, an
opinion of counsel as to continued perfection of such security
interests.
SECTION 7.09. Separate Corporate Existence. WGRC shall
take all reasonable steps (including, without limitation, all steps
that the Facility Agent may from time to time reasonably request)
to maintain WGRC's identity as a separate legal entity from each
Seller and to make it manifest to third parties that WGRC is an
entity with assets and liabilities distinct from those of each
Seller and each other Affiliate thereof. Without limiting the
generality of the foregoing and in addition to and consistent with
the covenants set forth in Sections 7.04 and 7.07, WGRC shall:
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(i) conduct all of its business, and make all
communications to third parties (including all invoices (if
any) letters, checks and other instruments) solely in its own
name (and not as a division of any other Person), and require
that all employees of WGRC identify themselves as such and not
as employees of any other Affiliate of WGRC (including,
without limitation, by means of providing appropriate
employees with business or identification cards identifying
such employees as WGRC's employees);
(ii) compensate all employees, consultants and agents
directly, from WGRC's bank accounts, for services provided to
WGRC by such employees, consultants and agents and, to the
extent any employee, consultant or agent of WGRC is also an
employee, consultant or agent of any Affiliate of WGRC,
allocate the compensation of such employee, consultant or
agent between WGRC and such Affiliate on a basis which
reflects the services rendered to WGRC and such Affiliate;
(iii) pay its own operating expenses and liabilities from
its own funds, allocate all overhead expenses (including,
without limitation, telephone and other utility charges) for
items shared between WGRC and any Affiliate on the basis of
actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related
to actual use and allocate taxes on the basis set forth in the
Tax Sharing Agreement;
(iv) at all times have at least one "Independent
Director" as defined in and as required under WGRC's
Certificate of Incorporation, have at least one officer
responsible for managing its day-to-day business and manage
such business by or under the direction of its board of
directors;
(v) maintain WGRC's books and records separate from
those of any Affiliate;
(vi) prepare its financial statements separately from
those of its other Affiliates and insure that any consolidated
financial statements of Wyman that include WGRC have detailed
notes to the effect that WGRC is a separate corporate entity
and that WGRC's creditors have a claim on its assets prior to
those assets becoming available to any creditors of any
Seller;
(vii) use its best efforts not to commingle funds or other
assets of WGRC with those of any other Affiliate, and not to
hold its assets in any manner that would create an appearance
that such assets belong to any other Affiliate, and will not
maintain bank accounts or other depository accounts to which
any Affiliate is an account party, into which any Affiliate
makes deposits or from which any Affiliate has the power to
make withdrawals;
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(viii) not permit any Affiliate to pay any of WGRC's
operating expenses (except pursuant to allocation arrangements
that comply with the requirements of subsection (iii) of this
Section 7.09 or pursuant to the terms of the Receivables Sale
Agreement);
(ix) not guarantee any obligation of any Affiliate nor
(to the extent that WGRC has the legal power to prevent such)
have any of its obligations guaranteed by any such Affiliate,
(either directly or by seeking credit based on the assets of
such Affiliate) or otherwise hold itself out as responsible
for the debts of any Affiliate;
(x) maintain at all times a separate telephone number and
separate stationery from that of any Affiliate which will be
answered in its own name, and have all its officers and
employees conduct all of its business solely in its own name;
(xi) not permit WGRC to be named as a direct or
contingent beneficiary or loss payee on any insurance policy
covering the property of any Affiliate and not name other
Affiliates as a direct or contingent beneficiary or loss payee
on its own insurance policies such that (A) in the event of a
loss in connection with such property, payments on account
thereof would be made to WGRC or would be jointly made to WGRC
and such Affiliate, or (B) payments on account of losses to
WGRC's property would be made to any Affiliates or would be
jointly made to WGRC and any Affiliates;
(xii) hold regular meetings of its board of directors in
accordance with the provisions of WGRC's Certificate of
Incorporation;
(xiii) maintain a separate office from the offices of any
of its Affiliates and identify such office by a sign in its
own name; and
(xiv) take such other actions as are necessary on its part
to ensure that the facts and assumptions set forth in the
opinion described in Section 5.01(xiv) remain true and correct
at all times.
ARTICLE VIII
NEGATIVE COVENANTS
WGRC covenants and agrees that, until the expiration or
termination of the Commitments and thereafter until the Collection
Date, unless the requisite Banks required under Section 12.01 shall
otherwise consent in writing, it will not, directly or indirectly:
SECTION 8.01. Liens; Sales of Collateral. Incur,
create, assume or permit to exist any Lien upon or with respect to
any property or assets now owned or hereafter acquired by WGRC
other than Permitted Liens and the Liens created under the Facility
Documents, or (except as expressly contemplated pursuant to the
Facility Documents) sell, convey, assign (by operation of law or
otherwise), transfer or otherwise dispose of any of the Collateral
or WGRC's right to receive income in respect thereof.
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SECTION 8.02. Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness except for (i) Indebtedness to the
Agents, the Banks and the Issuing Banks expressly contemplated
hereunder, (ii) Ordinary Course Expenses (to the extent, if any,
that such items constitute Indebtedness) and (iii) Indebtedness to
the Sellers pursuant to the Receivables Sale Agreement and the
Intercompany Notes; provided that (x) WGRC shall not increase the
principal amount outstanding under the Short-Term Notes if,
immediately after giving effect thereto, the aggregate outstanding
balances of the Short-Term Notes would exceed the limits set forth
in the Receivables Sale Agreement and (y) WGRC shall not increase
the principal amount outstanding under either the Short-Term Notes
or the Long-Term Notes if, immediately after giving effect thereto,
the aggregate outstanding balances of the Short-Term Notes and the
Long-Term Notes would exceed (i) Net Eligible Receivables minus
(ii) the Aggregate Net Outstandings minus (iii) the product of (a)
Net Eligible Receivables times (b) sixty percent (60%) of the Loss
Reserve Ratio, unless, in either such case, (A) the Majority Banks
have previously consented thereto in writing and (B) the Rating
Agency shall have confirmed its rating with respect to the Facility
notwithstanding such increase.
SECTION 8.03. Minimum Net Worth. WGRC shall at all
times maintain a minimum net worth (defined as the sum of (i) the
amount of its capital stock plus (ii) the amount of surplus and
retained earnings (or, in the case of a surplus or retained
earnings deficit, minus the amount of such deficit), in each case
determined in accordance with GAAP) of not less than the greater of
(1) $3,000,000 prior to the date Cameron becomes a Seller under the
Receivables Sale Agreement or $5,000,000 on any date thereafter or
(2) ten percent (10%) of the aggregate Outstanding Balance of all
Receivables.
SECTION 8.04. Guarantees. Guarantee, endorse or
otherwise be or become contingently liable (including by agreement
to maintain balance sheet tests) in connection with the obligations
of any other Person, except endorsements of negotiable instruments
for collection in the ordinary course of business and reimbursement
or indemnification obligations in favor of the Facility Agent or
the Banks as provided for under this Agreement.
SECTION 8.05. Limitation on Investments. Make any
Investment in any Person except for Permitted Investments.
SECTION 8.06. Limitation on Transactions with Affil-
iates. Enter into, or be a party to any transaction with any
Affiliate of WGRC, except for:
(i) the transactions contemplated by the Receivables
Sale Agreement; and
(ii) the transactions contemplated by the Company
Documents; and
(iii) to the extent not otherwise prohibited under this
Agreement, other transactions in the nature of employment con-
tracts and directors' fees, upon fair and reasonable terms
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materially no less favorable to WGRC than would be obtained in
a comparable arm's-length transaction with a Person not an
Affiliate.
SECTION 8.07. Facility Documents. Except as otherwise
permitted under Section 12.01, (a) amend or otherwise modify any
Facility Document to which it is a party, or grant any waiver or
consent thereunder or (b) designate a Termination Date if, at the
time of such designation, the Aggregate Net Outstandings exceed the
Base Amount, or (c) consent to any amendment or modification of the
Credit and Collection Policy; except that WGRC may, with prior
written notice to the Facility Agent, but without any prior written
consent, amend any Company Document, provided that any such
amendment shall be on fair and reasonable terms materially no less
favorable to WGRC than would be obtained in a comparable arm's-
length transaction with a Person not an Affiliate and such
amendment shall not be prohibited by, or otherwise adversely affect
WGRC's ability to comply with, Section 7.09.
SECTION 8.08. Charter and By-Laws. Amend or otherwise
modify its Certificate of Incorporation or Bylaws in any manner
which requires the consent of the "Independent Director" (as
defined in WGRC's Certificate of Incorporation) without the prior
written consent of the Facility Agent and reconfirmation by the
Rating Agency of its rating with respect to the Facility and
delivery of an opinion of counsel that such amendment shall not
alter the conclusions set forth in the legal opinion described in
Section 5.01(xiv). In addition, WGRC shall not make any change to
its corporate name unless (i) the Facility Agent and the Rating
Agency shall have received twenty (20) Business Days' prior written
notice of such name change and (ii) at least ten (10) Business Days
prior to the effective date of any such name change, WGRC shall
have executed and delivered to the Facility Agent (x) such
Financing Statements (Form UCC-1 and UCC-3) which the Facility
Agent may request to reflect such name change, together with such
other documents and instruments that the Facility Agent may request
in connection therewith and (y) an opinion of counsel as to
continued perfection of the security interests in the Collateral
following such change.
SECTION 8.09. Lines of Business. Conduct any business
other than that described in Section 6.01(o), enter into any
transaction with any Person which is not contemplated by or
incidental to the performance of its obligations under the Facility
Documents, or consolidate with or merge into any other Person, or
otherwise acquire or create any Subsidiaries.
SECTION 8.10. Bank Accounts. Maintain any bank accounts
other than the Collection Account, the Lock-Box Accounts and
checking accounts for payments of Ordinary Course Expenses.
SECTION 8.11. Lock-Box Banks; Change in Payment
Instructions to Obligors. (a) Make any changes in instructions to
Obligors directing payments other than to a Lock-Box Bank or, via
wire transfer, to the Collection Account, or (b) voluntarily add or
terminate any bank as a Lock-Box Bank from those listed in Exhibit
6.01(p) unless, with respect to the addition of any Lock-Box Bank,
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the Facility Agent shall have first received and approved, which
approval shall not be unreasonably withheld, (x) copies of Lock-Box
Agreements executed by each new Lock-Box Bank and WGRC and (y)
copies of all agreements and documents signed by WGRC (and, if
applicable, by a Seller) and the respective Lock-Box Bank with
respect to any new Lock-Box Account.
SECTION 8.12. Accounting Treatment. Prepare any
financial statements or other statements (including any tax filings
which are not consolidated with those of Wyman) which shall account
for the transactions contemplated by the Receivables Sale Agreement
in any manner other than as the sale of the Purchased Assets by the
Sellers to WGRC.
SECTION 8.13. ERISA Matters. WGRC will not (i) engage
or (to the extent it has the legal power to prevent such) permit
any ERISA Affiliate to engage in any prohibited transaction for
which an exemption is not available or has not previously been
obtained from the United States Department of Labor; (ii) permit to
exist any accumulated funding deficiency, as defined in
Section 302(a) of ERISA and Section 412(a) of the IRC with respect
to any Benefit Plan other than a Multiemployer Plan; (iii) fail to
make any payments to any Multiemployer Plan that WGRC or any ERISA
Affiliate may be required to make under the agreement relating to
such Multiemployer Plan or any law pertaining thereto; (iv) termi-
nate or (to the extent it has the legal power to prevent such)
permit any ERISA Affiliate to terminate any Benefit Plan which
could result in any liability of WGRC or any ERISA Affiliate under
Title IV of ERISA; or (v) permit to exist any occurrence of any
reportable event described in Title IV of ERISA which represents a
material risk of a liability of WGRC or (to the extent it has the
legal power to prevent such) any ERISA Affiliate under ERISA or the
Internal Revenue Code of 1986, as amended, if such prohibited
transactions, accumulated funding deficiencies, payments,
terminations and reportable events occurring within any fiscal year
of WGRC, in the aggregate, would be reasonably likely to result in
a Lien (other than a Permitted Lien) attaching to the Purchased
Assets and/or the other Collateral under Title IV of ERISA.
SECTION 8.14. Merger, Consolidation, Etc. Consolidate
with or merge into or with any other corporation, or purchase or
otherwise acquire all or substantially all of the assets of any
Person or sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Person, except as expressly
permitted under the terms of this Agreement.
ARTICLE IX
SECURITY INTEREST; ADMINISTRATION AND COLLECTION OF RECEIVABLES
SECTION 9.01. Grant of Security Interest. To secure the
prompt and complete payment when due of all Revolving Loans,
interest, fees, indemnities, Letter of Credit reimbursement
obligations, expenses and all other amounts owed hereunder or in
connection herewith (collectively, the "Obligations"), WGRC hereby
assigns and pledges to the Collateral Agent, for the benefit of the
Banks, a security interest in and Lien on all of WGRC's right,
title and interest in and to the following property, whether now
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owned or existing or hereafter arising or acquired and wheresoever
located (collectively, the "Collateral"):
(a) all Receivables, together with all Related Security,
Collections, Records and other Purchased Assets related
thereto;
(b) all right, title and interest of WGRC in, to and
under the Receivables Sale Agreement, including, without
limitation, all monies due and to become due to WGRC from the
Sellers or the Servicer under or in connection therewith,
whether as Receivables or fees, expenses, costs, indemnities,
insurance recoveries, damages for breach or otherwise, and all
rights, remedies, powers, privileges and claims of WGRC
against the Sellers and the Servicer under or with respect to
the Receivables Sale Agreement (whether arising pursuant to
the terms of the Receivables Sale Agreement or otherwise
available at law or in equity), including, without limitation,
(i) the right at any time to appoint a successor to the
Servicer as set forth therein, provided, however, that the
Collateral Agent's right to appoint a successor to the
Servicer shall arise only upon the occurrence of a Servicer
Termination Event and (ii) all licenses granted to WGRC by the
Sellers in connection with the administration and collection
of the Receivables;
(c) all right, title and interest of WGRC in, to and
under each of the other Facility Documents (excluding this
Agreement) (whether as an original party thereto, as assignee
or otherwise), including, without limitation, all monies due
and to become due to WGRC under or in connection with such
other Facility Documents, and all rights, remedies, powers,
privileges, benefits and claims of WGRC under or with respect
to such other Facility Documents (whether arising pursuant to
the terms of such Facility Documents or otherwise available at
law or in equity);
(d) the Collection Account, and all other bank and
similar accounts established for the benefit of the Collateral
Agent and/or the Banks, and all funds held therein or in such
other accounts, and all income from the investment of funds in
the Collection Account and such other accounts; and all
certificates and instruments, if any, from time to time
representing or evidencing the Collection Account or such
other accounts;
(e) all lock boxes, Lock-Box Accounts, and all other
bank and similar accounts relating to the collection of
Receivables and all funds held therein or in such other
accounts, and all income from the investment of funds in the
Lock-Box Accounts and such other accounts and all certificates
and instruments if any, from time to time in such lock boxes
or representing or evidencing the Lock-Box Accounts or such
other accounts;
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(f) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any and all of
the foregoing;
(g) all substitutions for and proceeds of any of the
foregoing and, to the extent not otherwise included, all
payments under insurance (whether or not the Collateral Agent
is the loss payee thereof) or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise
with respect to any of the foregoing.
Notwithstanding the foregoing, it is expressly understood and
agreed that any assignment and transfer to the Sellers of WGRC's
interest in returned or repossessed goods, which transfer is made
pursuant to the terms of Section 2.02(f) of the Receivables Sale
Agreement and subject to the payment requirements contemplated
thereunder, shall be made free and clear of any security interest
of the Collateral Agent in such goods.
SECTION 9.02. Continuing Liability of WGRC. The
security interests described above are granted as security only and
shall not subject the Facility Agent, the Collateral Agent, the
Issuing Bank or the Banks or their respective assigns to, or
transfer or in any way affect or modify, any obligation or lia-
bility of WGRC with respect to, any of the Collateral or any
transaction in connection therewith. None of the Facility Agent,
the Collateral Agent, the Issuing Bank nor the Banks nor their
respective assigns shall be required or obligated in any manner to
make any inquiry as to the nature or sufficiency of any payment
received by it or the sufficiency of any performance by any party
under any such obligation, or to make any payment or present or
file any claim, or to take any action to collect or enforce any
performance or the payment of any amount thereunder to which it may
be entitled at any time.
SECTION 9.03. Collection of Receivables. As of the
Effective Date, WGRC hereby transfers to the Collateral Agent for
the benefit of the Banks and the Agents the exclusive ownership and
control of the Lock-Box Accounts and all related lock-boxes owned
by WGRC, and WGRC hereby agrees to take any further action
necessary or that the Collateral Agent may reasonably request to
effect such transfer. Each Lock-Box Bank shall be instructed to
remit, on a daily basis, via overnight or same day transfer, all
amounts deposited in its Lock-Box Accounts to a segregated trust
account maintained with and under the exclusive control of the
Collateral Agent (on the corporate trust side thereof) for the
benefit of the Banks (the "Collection Account") in accordance with
the terms of a Lock-Box Agreement substantially in the form of
Exhibit 9.03 hereto. WGRC shall have no legal ownership of or
control over the Collection Account and no rights of withdrawals
therefrom except for the right to receive Available Cash to the
extent provided under this Agreement and the other rights to
receive withdrawals expressly provided for in Section 9.07 or
Section 9.08. WGRC shall, by delivery of the Daily Report, cause
the Servicer to advise WGRC and the Agents of the amount of
Collections to be received into the Lock-Box Accounts and the
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Collection Account on each Business Day with respect to the
Receivables and the Facility Agent shall, based solely on such
Daily Report, advise WGRC and the Agents as to the amounts of such
Collections which constitute Available Cash. If WGRC or its agents
or representatives shall at any time receive any cash, checks or
other instruments constituting Collections, such recipient shall
promptly segregate such payment and hold such payment in trust for
and in a manner acceptable to the Agents, and shall, promptly upon
receipt of any such payment (and in any event within one Business
Day following such receipt), remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of
transfer, to a Lock-Box Account or the Collection Account.
(b) At any time upon the occurrence and during the
continuance of a Liquidation Event: (i) with contemporaneous
notice to WGRC, the Facility Agent may notify any or all of the
Obligors of the security interest granted hereunder and may direct
any or all of the Obligors of Receivables included in the
Collateral to pay all amounts payable under any such Receivables
directly to the Collateral Agent or its designee; (ii) at the
Facility Agent's request and at WGRC's expense, WGRC shall give
notice of the Banks' interest in the Collateral to each Obligor
whose Receivables are included in the Purchased Assets and direct
that payments be made directly to the Collateral Agent or its
designee; (iii) WGRC shall promptly assemble all Records included
in the Collateral, and make the same available to the Collateral
Agent at a place selected by the Collateral Agent or its designee;
and (iv) the Collateral Agent may enforce the Receivables Sale
Agreement against the Sellers and the Servicer and shall have the
right to give or withhold any or all consents, requests, notices,
directions, approvals, demands, extensions or waivers under or with
respect thereto, to the same extent as WGRC would otherwise be
entitled to do. In addition to the foregoing, upon the occurrence
and during the continuance of a Servicer Termination Event, WGRC
shall, at the request of the Facility Agent, exercise its rights
under the Receivables Sale Agreement to notify any or all of the
Obligors of WGRC's interests in the Purchased Assets. WGRC hereby
authorizes the Banks, and gives to the Banks its irrevocable power
of attorney, which shall be coupled with an interest, and the Banks
hereby designate the Collateral Agent to exercise such
authorization and power of attorney, to take any and all steps in
the name of WGRC, which steps are necessary or desirable, in the
reasonable determination of the Collateral Agent, to collect all
amounts due under the Collateral, including, without limitation,
endorsing WGRC's name on checks and other instruments representing
Collections and, upon the occurrence and during the continuance of
a Liquidation Event, enforcing such Receivables and the related
Invoices.
(c) WGRC shall, or shall cause the Servicer to, following
notification that collections of any receivable or other intangible
owed to any Seller or an Affiliate thereof, which is not a
Purchased Asset, have been deposited into the Lock-Box Accounts,
segregate all such collections or, if such collections have been
deposited into the Collection Account, request the Collateral Agent
to segregate such collections. Promptly after such misapplied
collections have been reasonably identified to the Collateral
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Agent, the Collateral Agent shall turn over to the applicable
Seller or such Affiliate, as applicable, all such collections less
all reasonable and appropriate out-of-pocket costs and expenses, if
any, incurred by the Collateral Agent in identifying and collecting
such receivables.
(d) WGRC shall cause to be delivered to the Agents, on
each Business Day, the Daily Report for such day prepared by the
Servicer pursuant to Section 5.03(b) of the Receivables Sale
Agreement, and shall cause to be delivered to the Agents and the
Banks, no later than each Reporting Date with respect to the
Collection Period most recently ended, the Settlement Statement
prepared by the Servicer pursuant to such Section 5.03(b).
(e) In the event that the Servicer resigns or is removed under
the terms of the Receivables Sale Agreement and this Agreement, and
a successor Servicer is not promptly named by WGRC (or, following a
Servicer Termination Event, the Collateral Agent), WGRC hereby
agrees to appoint the Collateral Agent, and the Collateral Agent
hereby agrees to accept such appointment (or, following a Servicer
Termination Event, agrees to appoint itself) as Servicer, and to
assume all of the duties and obligations thereof.
SECTION 9.04. Responsibilities of WGRC. Anything herein
to the contrary notwithstanding:
(a) WGRC shall (i) diligently perform (either directly or
indirectly by causing the Sellers to perform) all of its obliga-
tions under the Invoices related to the Receivables and the
exercise by the Facility Agent or the Collateral Agent of their
respective rights hereunder shall not relieve WGRC from such
obligations and (ii) pay when due (either directly or, to the
extent provided for in the Receivables Sale Agreement, indirectly
by causing the Sellers to pay when due) any taxes relating to the
origination and sale of the Receivables and the other Purchased
Assets and/or the grant of any security interest hereunder.
(b) Neither any Agent nor any Bank shall have any
obligation or liability with respect to any Receivable or related
contract nor be obligated to perform any of the obligations of WGRC
or any Seller thereunder and WGRC agrees to indemnify and hold
harmless each of the Agents and the Banks against and from any and
all liabilities arising from or related to any such obligation or
liability (the payment of such indemnity to be subject to the terms
of Sections 9.07(c) and 9.08 hereof).
SECTION 9.05. Further Action Evidencing Security
Interest. (a) WGRC agrees that at any time and from time to time,
at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that may be
necessary to perfect, protect or more fully evidence the security
interests granted hereunder, or to enable the Facility Agent, the
Collateral Agent or the Banks to exercise or enforce any of their
respective rights hereunder. Without limiting the generality of
the foregoing, WGRC will (i) cause its computer files and other
physical records relating to the Receivables (by means of a general
legend that will automatically appear at or near the beginning of
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any list or print-out of the Receivables) to indicate that, unless
otherwise specifically identified on such list or print-out as a
Receivable not so sold, all Receivables included in such list or
print-out and Related Security are part of the Collateral in
accordance with this Agreement and (ii) execute and file such
financing or continuation statements or amendments thereto or
assignments thereof, and such other instruments and notices, as may
be necessary or appropriate or as the Facility Agent or any of its
agents, representatives or permitted assignees may reasonably
request.
(b) In the event that WGRC, within one (1) Business Day
after notice from the Facility Agent, fails to deliver one or more
financing or continuation statements, and amendments thereto and
assignments thereof, that the Facility Agent or any of its agents,
representatives or permitted assignees may reasonably determine to
be necessary to evidence or perfect the Collateral Agent's security
interest in the Collateral or WGRC's ownership of all or any of the
Purchased Assets now existing or hereafter arising, then WGRC
hereby authorizes either of the Agents to file any such statements
without the signature of WGRC where permitted by law. A carbon,
photographic or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof,
shall be sufficient as a financing statement. If WGRC fails to
perform any of its agreements or obligations under this Agreement,
following expiration of any applicable cure period, either Agent
may (but shall not be required to) perform, or cause performance
of, such agreement or obligation, and the reasonable expenses of
the Agents and the Banks incurred in connection therewith shall be
payable by WGRC upon the Facility Agent's written demand therefor
(which demand shall itemize such expenses in reasonable detail).
(c) All amounts payable by WGRC under this Section 9.05
shall be payable subject to the terms of Sections 9.07(c) and 9.08
hereof.
SECTION 9.06. Application of Collections. Any payment
by an Obligor in respect of any indebtedness or other obligations
owed by such Obligor to WGRC shall, except as otherwise specified
by such Obligor or otherwise required by law, be applied as a
Collection of any Receivable included in the Purchased Assets (in
the order of the age by invoice date of such Receivables, starting
with the oldest such Receivable, as determined under the Credit and
Collection Policy) to the extent of any amounts then due and
payable thereunder before being applied to (i) any Receivable
arising subsequent to the Termination Date which is not included in
the Purchased Assets or (ii) any other indebtedness of such Obligor
to any Seller or to WGRC.
SECTION 9.07. Administration of Collection Account Prior
to the Liquidation Period. On each Business Day prior to the
commencement of the Liquidation Period, the Collateral Agent shall
administer all Collections received into the Collection Account in
accordance with the following provisions of this Section 9.07:
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(a) On each such Business Day, the Collateral Agent shall
retain in the Collection Account an amount equal to the Carrying
Costs Reserve. Whenever any Reserved Carrying Costs have become
due and payable (or, in the case of Ordinary Course Expenses which
constitute Reserved Carrying Costs), when WGRC has made a request
certifying that such Ordinary Course Expenses need to be paid on or
within the next five (5) Business Days), the Collateral Agent shall
withdraw funds from the Collection Account to pay such Reserved
Carrying Costs (or, in the case of Ordinary Course Expenses which
constitute Reserved Carrying Costs, to deposit the amount of such
requested funds in WGRC's checking account maintained for such
purposes).
(b) If, on any such Business Day, the Aggregate Net
Outstandings exceed the Base Amount, then, in such event, all
Available Cash shall be remitted to the Banks for prepayment of the
Revolving Loans and/or retention in the Collection Account in the
following order of priority: first, to prepay the Revolving Loans
to the extent required under Section 2.07(a), second, to retain in
the Collection Account the amount of any Available Cash which must
be retained in the Collection Account pursuant to Section 2.07(b)
and third, to cash collateralize the Letters of Credit in
accordance with Section 2.07(a).
(c) After giving effect to the retention and or
remittance of funds under clauses (a) and (b) of this Section 9.07,
all Available Cash (including any cash income received by reason of
investments of any retained cash) shall, except as otherwise
required in clause (d) below of this Section 9.07, be remitted to
WGRC or, if any payment described below in this clause (c) is owing
to either Agent, the Issuing Bank or any Bank, to such Person
directly. All such Available Cash shall be applied to pay (i)
first, any amounts owing to the Issuing Bank under Sections 3.06(a)
or (b) in connection with any Bank's failure to fund its Pro Rata
Share of a draw under a Participated Letter of Credit and then any
amounts owing to the Facility Agent under Section 2.04(a) or
2.04(b) in connection with any Bank's failure to fund its Pro Rata
Share of a Revolving Loan , (ii) second, any amounts owing to
Dissenting Banks or required to cash collateralize the applicable
Pro Rata Share of Syndicated Letters of Credit issued by Dissenting
Banks pursuant to Section 2.06(d) hereof, (iii) third, any
Unreserved Carrying Costs owing to the Banks or the Agents, (iv)
fourth, any other Unreserved Carrying Costs, (v) fifth, to the
extent requested by WGRC, any voluntary prepayments of the
Revolving Loans pursuant to Section 2.07(c) above, (vi) sixth, the
purchase price for newly generated Purchased Assets under the
Receivables Sale Agreement, and (vii) seventh, the following
amounts in the following order of priority: (1) to Wyman to pay
principal and interest then due and owing on the L/C Notes, (2) to
the Sellers pro rata to pay any principal and interest outstanding
on the Short-Term Notes, (3) to the Sellers pro rata to pay any
interest and principal outstanding on the Long-Term Notes, and (4)
only if WGRC has so elected and subject to proper authorization of
WGRC's board of directors, to pay dividends on or redeem in whole
or in part the common stock of WGRC.
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(d) If, on any such Business Day, either (i) an
Insolvency Event with respect to any Seller or (ii) to Wyman's
knowledge, a Liquidation Event described in clause (m) of the
definition thereof with respect to such Seller's Receivables, has
occurred and is continuing, then, unless WGRC has been authorized
to continue purchases of Receivables from such Seller under the
Receivables Sale Agreement in accordance with Section 8.07 hereof
during either such event, the Collateral Agent shall, after giving
effect to the retention and/or remittance of funds under clauses
(a) and (b) of this Section 9.07, separately identify the Bank
Percentage and the WGRC Percentage of the Collections attributable
to such Seller's Receivables. The Bank Percentage of such
Collections shall be set aside in trust for the Banks until the
earliest of (i) commencement of the Liquidation Period (at which
time such funds shall be remitted and applied as provided in
Section 9.08), (ii) dismissal of the proceedings giving rise to
such Insolvency Event or resumption of purchases pursuant to
appropriate court order as contemplated under the Receivables Sale
Agreement (in which event such funds shall be remitted and applied
as provided above in this Section 9.07) and (iii) waiver or cure of
the Liquidation Event described in clause (m) thereof (in which
event such funds shall be remitted and applied as provided above in
this Section 9.07); the Bank Percentage of such Collections shall
also be used to make any mandatory prepayments of the Revolving
Loans which may subsequently be required under clause (b) of this
Section 9.07. The WGRC Percentage of such Collections shall be
remitted and applied as follows:
(x) fifty percent (50%) of the WGRC Percentage of such
Collections shall be retained in the Collection Account as
cash collateral for the payment of any not-yet accrued
Carrying Costs (including, without limitation, indemnification
amounts) or for the payment of any indemnities described in
Section 9.08(c) until the amount of such cash collateral so
retained equals (x) fifteen percent (15%) times (y) the
Dilution Reserve Ratio then in effect times (z) the Net
Eligible Receivables as of the date such Insolvency Event or
Liquidation Event first occurred; and
(y) the remaining fifty percent (50%) of the WGRC
Percentage of such Collections shall be remitted to WGRC on
account of the WGRC Percentage and may be used by WGRC to make
any payments which it is authorized to make under clause (c)
of this Section 9.07.
SECTION 9.08. Administration of Collection Account
During the Liquidation Period. (a) On each Business Day during the
Liquidation Period, the Collateral Agent shall remit all
Collections on deposit in the Collection Account to the appropriate
parties in the following order of priority:
(i) to pay the following accrued and unpaid Reserved
Carrying Costs in the following order of priority: first, to
the payment of all accrued and unpaid interest on the
Revolving Loans (other than interest owed pursuant to Sections
4.01(d) and 4.03(b)); second, to the payment of any Servicer
Fees owed to any Servicer, if other than WGRC or any Affiliate
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thereof; third, to the payment of all Agent Fees then due and
payable to the Facility Agent; fourth, to the payment of all
L/C Fees then due and payable; fifth, to the payment of all
L/C Fronting Fees and other fees then due and payable to the
Issuing Bank under Sections 4.02(d) and (e); sixth, to the
payment of all Non-Usage Fees owed with respect to periods
prior to the Termination Date; and seventh, to be remitted to
WGRC for the payment of Ordinary Course Expenses which
constitute Reserved Carrying Costs;
(ii) to prepay the Revolving Loans until the Aggregate
Loan Amount equals zero; provided, that any such reductions
shall, subject to Section 2.04(b) and 3.06(b), be applied
first, against all Base Rate Loans then outstanding, second,
to all Eurodollar Loans then outstanding with Interest Periods
ending on such date, and third, to any other Eurodollar Loans
then outstanding;
(iii) to cash collateralize the outstanding Letters of
Credit until the amount of cash collateral held by the
Collateral Agent equals the Aggregate L/C Amount;
(iv) to pay any Unreserved Carrying Costs owing to the
Banks and the Agents;
(v) to pay any other Unreserved Carrying Costs;
(vi) to pay any Servicer Fees owed to WGRC or any
Affiliate thereof; and
(viii) to pay interest and principal amounts owed under
the Intercompany Notes.
All Unreserved Carrying Costs shall only be paid from Collections
and other cash of WGRC, and there shall be no recourse to or claim
against WGRC at any time for the payment thereof to the extent that
such Collections and cash are insufficient to satisfy such
Unreserved Carrying Costs. After the Revolving Loans have been
paid in full and the Aggregate L/C Amount has been cash
collateralized in full, any remaining Collections and proceeds of
the Collateral (including any income from the investment of the
cash collateral in the Collection Account), less any continued
Carrying Costs, shall be remitted to WGRC. In the event that any
Letter of Credit expires undrawn or is otherwise terminated, then
any cash collateral previously held on account of such Letter of
Credit shall be remitted to WGRC.
(b) During the Liquidation Period, the Collateral Agent
may, at its discretion, require that all Collections and other
proceeds which would otherwise be received into the Collection
Account be held in a special segregated trust account maintained on
the corporate trust side thereof pending the determination of
whether or not such Collections and other proceeds are included in
the Purchased Assets. In such event, the Servicer shall, as soon
as possible after receipt of any Collections and other proceeds by
the Collateral Agent, (i) determine whether such Collections and
proceeds are included in the Purchased Assets or otherwise (such
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determination to be satisfactory to the Collateral Agent) and (ii)
notify WGRC, the Sellers and the Agents of such determination. The
Collateral Agent shall as soon as possible thereafter transfer any
Collections or proceeds included in the Purchased Assets to the
Collection Account for application pursuant to the other terms of
this Section 9.08 and pay any Collections that are not included in
the Purchased Assets to the applicable Person. Notwithstanding the
foregoing, during any Liquidation Period, all Collections received
from an Obligor in respect of any Receivables or other indebtedness
owed to any Seller and/or WGRC shall continue to be applied in
accordance with the provisions of Section 9.06 hereof and Section
5.06 of the Receivables Sale Agreement.
SECTION 9.09. Remittances and Investment of Funds. All
remittances from the Collection Account to the Banks, to WGRC or to
the Agents as required under Section 9.07 or under Section 9.08
shall be by wire transfer of immediately available funds. All
funds which are retained in the Collection Account pursuant to
Section 9.07 or Section 9.08 (including funds maintained as part of
the Carrying Costs Reserve) shall be invested in Permitted
Investments selected by the Collateral Agent at the direction of
WGRC (such direction to be set forth in the applicable Daily
Report), or, absent such direction or at any time during the
Liquidation Period or following notice to WGRC from the Collateral
Agent following the occurrence and during the continuance of a
Liquidation Event, in overnight Permitted Investments selected by
the Collateral Agent, provided, however, that (i) each such
investment shall be in the name of the Collateral Agent or
otherwise in a form which permits the Collateral Agent to maintain
a perfected security interest in such investment and (ii) the
maturities of Permitted Investments maintained as part of the
Carrying Costs Reserve shall be limited to ensure that all such
Permitted Investments mature in time for WGRC to make timely
payments of all Carrying Costs as the same become due. The
Collateral Agent may liquidate any Permitted Investments prior to
maturity in order to transfer funds or make any distributions which
transfers or distributions are required under the Facility
Documents, provided that no such Permitted Investments may be
liquidated at a price less than the purchase price therefor without
the prior consent of all of the Banks. It is understood that the
Collateral Agent shall have no liability to WGRC, to any other
party hereto or to any other Person for (i) the rate of return on
any such Permitted Investments or (ii) any failure to pay, remit,
distribute or transfer funds to such party or to make any required
payment, remittance, distribution or transfer on account of the
Collateral Agent's inability to liquidate any Permitted Investments
as a result of the foregoing sentence.
ARTICLE X
TERMINATION; REMEDIES; INDEMNIFICATION
SECTION 10.01. Termination; Remedies. The obligation of
the Banks to make Revolving Loans and to issue and/or participate
in Letters of Credit shall terminate on the Commitment Termination
Date unless the Termination Date shall have earlier occurred
pursuant to the definition thereof. Upon any such termination, (i)
the Commitments of the Banks shall be terminated; (ii) the
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Liquidation Period shall immediately commence; (iii) the Agents and
the Banks shall be entitled to pursue any other right or remedy
under this Agreement; and (iv) the Agents and the Banks shall be
entitled to exercise all the rights and remedies provided to a
secured creditor upon default under the UCC of otherwise, all of
which rights and remedies shall be cumulative to those provided in
this Agreement and the other Facility Documents (provided, that the
Agents and the Banks may not sell all or substantially all of the
Receivables unless such sale is commercially reasonable and all of
the Banks consent thereto). In addition to the foregoing, if WGRC
becomes the subject of an Insolvency Event, then, in addition to
the foregoing, the principal and interest on the Revolving Notes
and the other Obligations shall become immediately due and payable,
without presentment, demand, protest or other notice of any kind
whatsoever. Absent the occurrence of an Insolvency Event with
respect to WGRC, the principal and interest on the Revolving Notes
shall become immediately due and payable upon the Final Collection
Date.
SECTION 10.02. Binding Effect. Notwithstanding any
Termination Date, the obligations of WGRC under this Agreement
shall be absolute and unconditional and shall remain in full force
and effect until the Obligations have been fully paid and
satisfied. Upon the Collection Date, the security interests
granted hereby shall terminate and the Collateral Agent will, at
WGRC's expense, execute and deliver to WGRC such UCC termination
statements and other documents as WGRC may reasonably request to
evidence such termination.
SECTION 10.03. Indemnities by WGRC. Without limiting
any other rights which the Facility Agent, the Collateral Agent,
the Banks, the Issuers and the Issuing Bank may have hereunder or
under applicable law, but without duplication, WGRC hereby agrees
to indemnify each of the Facility Agent, the Collateral Agent, the
Banks, the Issuers and the Issuing Bank, their successors and
permitted assignees, and their and such assignees' respective
officers, directors, agents and employees (all of the foregoing
collectively referred to herein as "Indemnitees") from and against
any and all damages, losses, claims, liabilities, costs and
expenses, including reasonable attorneys' fees, and disbursements
(all of the foregoing collectively referred to herein as the
"Indemnified Amounts") awarded against or incurred by any
Indemnitee relating to or resulting from this Agreement or the
acquisitions or ownership by WGRC of any Purchased Assets
(excluding, however, any such amounts to the extent the same
comprise recourse for Receivables which are not collected, not paid
or uncollectible on account of the insolvency, bankruptcy,
inability or failure to pay or lack of creditworthiness of the
applicable Obligor). Without limiting the foregoing (but subject
to the exclusion in the immediately preceding sentence), WGRC shall
indemnify the Indemnitees for Indemnified Amounts relating to or
resulting from:
(i) any representation or warranty made by WGRC or any
Seller (or any of its officers) (individually or as Servicer
or as subservicer) under or in connection with this Agreement
or in connection with the preparation or delivery of any Daily
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Report, any Settlement Statement, or any other information or
report delivered pursuant hereto, which shall have been false,
incomplete or incorrect in any respect when made;
(ii) the failure by WGRC or any Seller (individually or
as Servicer or as subservicer) to comply with any term,
provision or covenant contained in this Agreement, any other
Facility Document or any agreement executed in connection with
this Agreement or any other Facility Document (in each case,
where WGRC or such Seller is a party thereto), or with any
applicable law, rule or regulation with respect to any
Receivable, the related Invoice or the Related Security, or
the nonconformity of any Receivable, the related Invoice or
the Related Security with any such applicable law, rule or
regulation;
(iii) the failure of any Seller to vest and maintain
vested in WGRC or to transfer to WGRC, or the failure of WGRC
to maintain vested in it, legal and equitable title to and
ownership of the Receivables and other Purchased Assets which
are, or are purported to be, sold by such Seller under the
Receivables Sales Agreement, free and clear of any Lien (other
than Liens created in favor of WGRC thereunder and Liens
created in favor of the Collateral Agent hereunder and under
the other Facility Documents), including all amounts expended
by the Collateral Agent pursuant to Section 9.05(b);
(iv) the failure by WGRC or any Seller to file, or any
delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any
Receivables and other Purchased Assets which are, or are
purported to be, sold by a Seller under the Receivables Sales
Agreement, or which are the subject of a security interest
granted under this Agreement, whether at the time of any
Purchase or at any subsequent time;
(v) the failure by WGRC or any Seller to be duly
qualified to do business, to be in good standing or to have
filed appropriate fictitious or assumed name registration
documents in any jurisdiction;
(vi) any dispute, claim, offset or defense to the
payment of any Receivable (other than discharge in bankruptcy
or under similar insolvency law) which is, or is purported to
be, sold by any Seller under the Receivables Sales Agreement
which dispute, claim, offset or defense is based on the
Receivable or related invoice not being a legal, valid and
binding obligation of the related Obligor, enforceable in
accordance with its terms, or which relates to Dilution
Factors or to such Receivables being Noncomplying Receivables
on the date of Purchase or on any similar ground not related
to the creditworthiness of the applicable Obligor or any other
claim asserted against any Indemnitee resulting from the sale
of the merchandise or services related to such Receivable or
the furnishing or failure to furnish such merchandise or
services;
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(vii) any products liability claim or personal injury or
property damage suit or other similar or related claim or
action of whatever sort arising out of or in connection with
the goods and/or merchandise or services that are the subject
of any Receivable generated by a Seller or related Invoice or
contract;
(viii) the failure of WGRC or any Seller to pay when due
(A) any taxes or charges imposed on such Seller or (B) any
sales taxes or other charges imposed in connection with such
Seller's transfer of Purchased Assets under the Receivables
Sales Agreement (other than taxes on or measured by the net
income of WGRC or any of its permitted assignees);
(ix) the failure of WGRC or any Seller (individually or
as Servicer or subservicer) or any of its agents or
representatives to perform its duties and obligations in
accordance with the provisions of this Agreement, or to remit
to WGRC, Collections of Purchased Assets received by such
Seller or any such agent or representative; and
(x) the commingling of Collections of Purchased Assets
with any other funds of WGRC or any of the Sellers.
It is expressly agreed and understood by the parties (i) that such
indemnification is not intended to constitute a guarantee of the
collectibility or payment of the Receivables sold hereunder and the
other Purchased Assets and (ii) that nothing in this Section 10.03
shall require WGRC to indemnify any Indemnitee (A) for damages,
losses, claims or liabilities or related costs or expenses
resulting from such Indemnitee's gross negligence or willful
misconduct or (B) for lost profits, consequential, special or
punitive damages. Notwithstanding anything in this Agreement to
the contrary, the gross negligence or willful misconduct of any one
Indemnitee shall not be a defense to, or in any other way adversely
affect, mitigate or diminish any other Indemnitee's right or claim
to indemnification under this Section 10.03. Any amounts subject
to the indemnification provisions of this Section 10.03 shall,
subject to Sections 9.07(c) and 9.08 hereof, be paid by WGRC from
the Collection Account for distribution to the applicable
Indemnitees within five (5) Business Days following such
Indemnitees' written demand therefor, setting forth in reasonable
detail the basis for such demand, in each case out of Available
Cash (including any proceeds received by WGRC pursuant to the
indemnifications made in its favor under the Receivables Sales
Agreement). Notwithstanding anything to the contrary in this
Agreement, for purposes of this Section 10.03, any representations,
warranties and covenants contained in Sections 6.01(a), 6.01(r),
7.04 or 7.09 of this Agreement shall not be deemed to be limited to
failures to perform or comply or to events, circumstances,
conditions or changes that did give rise to a Material Adverse
Effect. The indemnity obligations set forth in this Section 10.03
shall be continuing and shall survive any termination of this
Agreement.
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ARTICLE XI
THE AGENTS
SECTION 11.01. Authorization and Action. Each Bank
hereby accepts the appointment of and irrevocably authorizes each
of the Agents to take such action as agent on its behalf and to
exercise such powers as are expressly delegated to such Agent by
the terms hereof, together with such powers as are reasonably
incidental thereto. Neither Agent shall be required to take any
action which exposes such Agent to personal liability or which is
contrary to this Agreement or applicable law. Except where this
Agreement expressly provides otherwise, each Agent agrees to give
to the other Agent and to each Bank prompt notice of each notice
given to it by WGRC or any Seller pursuant to the terms of this
Agreement. The appointment and authority of the Agents hereunder
shall terminate upon the indefeasible payment in full of the
Obligations and the termination of all Letters of Credit.
SECTION 11.02. Nature of Agents' Duties. The Agents
shall have no duties or responsibilities except those expressly set
forth in this Agreement or in the other Facility Documents. The
duties of the Agents shall be mechanical and administrative in
nature. Neither Agent shall have by reason of this Agreement a
fiduciary relationship in respect of the other Agent or any Bank.
Nothing in this Agreement or any of the Facility Documents, express
or implied, is intended to or shall be construed to impose upon
either Agent any obligations in respect of this Agreement or any of
the Facility Documents except as expressly set forth herein or
therein. Neither Agent shall have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank or
the other Agent with any credit or other information with respect
to WGRC or the Sellers, whether coming into its possession before
the date hereof or at any time or times thereafter (except as
expressly set forth in this Agreement). If either Agent seeks the
consent or approval of the Banks to the taking or refraining from
taking any action hereunder, such Agent shall send notice thereof
to each Bank. The Agents shall promptly notify each Bank any time
that the Banks have instructed the Agents to act or refrain from
acting pursuant hereto.
SECTION 11.03. UCC Filings. Each of WGRC and the Banks
expressly recognizes and agrees that the Collateral Agent may be
listed as the assignee or secured party of record on the various
UCC filings required to be made hereunder in order to perfect the
grant of a security interest herein for the benefit of the Banks,
that such listing shall be for administrative convenience only in
creating a single secured party to take certain actions hereunder
on behalf of the Banks and that such listing will not affect in any
way the status of the Banks as the beneficial holders of such
security interest. In addition, such listing shall impose no
duties on the Collateral Agent other than those expressly and
specifically undertaken in accordance with this Article XI.
SECTION 11.04. Agent's Reliance, Etc. Neither of the
Agents nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it
or them as Agent under or in connection with this Agreement
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(including, without limitation, such Agent's servicing,
administering or collecting Receivables) except for its or their
own gross negligence or willful misconduct. Without limiting the
foregoing, each Agent: (i) may consult with legal counsel
(including counsel for WGRC), independent public accountants and
other experts selected by it and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no
warranty or representation to the other Agent or to any Bank and
shall not be responsible to the other Agent or any Bank for any
statements, warranties or representations made in or in connection
with this Agreement; (iii) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of WGRC or to
inspect the property (including the books and records) of WGRC
(except as otherwise expressly set forth in this Agreement); (iv)
shall not be responsible to the other Agent or to any Bank for the
due execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement, or any other instrument or
document furnished pursuant hereto, or any certificate, report,
statement or other document referred to or provided for in, or
received by the Agents under or in connection with, the Facility
Documents, or for any failure of WGRC or any of its Affiliates to
perform its obligations under the Facility Documents; and (v) shall
incur no liability under or in respect of this Agreement by acting
upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telex)
believed by it to be genuine and to be or to have been signed or
sent by the proper party or parties. Each Agent may at any time
request instructions from the Banks with respect to any actions or
approvals which by the terms of this Agreement or of any of the
other Facility Documents such Agent is permitted or required to
take or to grant, and such Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and
shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of
the Facility Documents until it shall have received such
instructions from the Majority Banks (or, where required, from the
Required Banks or all of the Banks). Without limiting the
foregoing, no Bank shall have any right of action whatsoever
against either Agent as a result of such Agent acting or refraining
from acting under this Agreement or any of the other Facility
Documents in accordance with the instructions of the Majority Banks
(or, where required, the Required Banks or all of the Banks). The
Agents shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or
conversation reasonably believed by it or them to be genuine and
correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to WGRC), independent
accountants and other experts selected by the Agents.
SECTION 11.05. Agent and Affiliates. To the extent that
the Agents or any of their Affiliates are or shall become Banks
hereunder, such Agent or such Affiliate, in such capacity, shall
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have each and every right and power under this Agreement as would
any other Bank hereunder (including, without limitation, the right
to vote upon any matter upon which any of the Banks are entitled to
vote) and, without exception, may exercise the same as though it
were not an Agent. Each Agent and its Affiliates may engage in any
kind of business with WGRC or any Seller, any of their respective
Affiliates and any Person who may do business with or own
securities of WGRC or any Seller or any of their respective
Affiliates, all as if it were not an Agent hereunder and without
any duty to account therefor to the other Agent or the Banks.
SECTION 11.06. Credit Decision. Each Bank and the
Issuing Bank acknowledges that it has, independently and without
reliance upon either Agent or any other Bank and based on such
documents and information as it has deemed appropriate, made its
own evaluation and decision to enter into this Agreement and, to
the extent it so determines, to issue and participate in Letters of
Credit and/or to make Revolving Loans hereunder. Each Bank and the
Issuing Bank also acknowledges that it will, independently and
without reliance upon either Agent or any other Bank, and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking
action under this Agreement.
SECTION 11.07. Indemnification. Each Bank agrees to
indemnify the Agents (to the extent not reimbursed by WGRC or, to
the extent applicable, by any Seller), ratably according to its Pro
Rata Share, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Agents in
any way relating to or arising out of this Agreement or any action
taken or omitted by the Agents under this Agreement; provided,
however, that no Bank 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. Without
limiting the generality of the foregoing, each Bank agrees to
reimburse the Agents, (to the extent not reimbursed by WGRC or, to
the extent applicable, by any Seller) ratably according to their
Pro Rata Shares, promptly upon demand, for any out-of-pocket
expenses (including reasonable counsel fees) incurred by the Agents
in connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of their rights or
responsibilities under, this Agreement. The rights of the Agents
under this Section 11.07 shall survive the termination of this
Agreement.
SECTION 11.08. Successor Agent. Either Agent may resign
at any time by giving thirty days' notice thereof to the other
Agent, the Banks, WGRC and the Servicer. All of the Banks other
than the applicable Agent shall have the right to remove such
Agent, with or without cause. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a
successor Agent approved by WGRC (which approval will not be
unreasonably withheld or delayed), and such resignation or removal
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shall not be effective until such successor Agent is appointed and
has accepted such appointment; provided, that WGRC shall not have
the right to approve any successor Agent following the occurrence
and during the continuance of a Liquidation Event or during the
Liquidation Period. The Banks shall provide the Rating Agency with
prompt notice of the resignation or removal of either Agent. If no
successor Agent shall have been so appointed and accepted such
appointment within 45 days after the retiring Agent's giving of
notice of resignation, then the retiring or removed Agent may, on
behalf of the Banks appoint a successor Agent approved by WGRC
(which approval will not be unreasonably withheld or delayed),
which successor Agent shall be (a) either (i) a commercial bank
having a combined capital and surplus of at least $500,000,000 or
(ii) an Affiliate of such an institution and (b) experienced in the
types of transactions contemplated by this Agreement. In addition,
any successor Collateral Agent must be authorized under United
States law to maintain and operate the Collection Account. Upon
the acceptance of any appointment as an Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to
and become vested with all of the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be
discharged from all further duties and obligations under this
Agreement. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article XI shall inure
to its benefit as to any actions taken or omitted to be taken by it
while it was an Agent under this Agreement.
SECTION 11.09. Direction by the Banks. The Agents shall
be fully justified in failing or refusing to take any action under
the Facility Documents unless it or they shall first receive such
advice or concurrence of the Majority Banks (or, if applicable, the
Required Banks or all of the Banks) as it or they deem appropriate
or it or they shall first be indemnified to its or their
satisfaction by the Banks against any and all liability and expense
which may be incurred by it or them by reason of taking or
continuing to take any such action. The Agents shall in all cases
be fully protected in acting, or in refraining from acting, under
the Facility Documents in accordance with a request of the Majority
Banks (or, if applicable, the Required Banks or all of the Banks)
and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks and all future holders
of the Revolving Notes.
SECTION 11.10. Notice of Liquidation Events. The Agents
shall not be deemed to have knowledge or notice of the occurrence
of any Liquidation Event hereunder unless either Agent shall have
received notice from a Bank or WGRC describing such Liquidation
Event or stating that such notice is a "notice of Liquidation
Event." In the event that an Agent receives such a notice, such
Agent shall given prompt notice thereof to the Banks. The Agents
shall take such action or refrain from taking such action with
respect to such Liquidation Event as shall be reasonably directed
by the Majority Banks (or, if applicable, the Required Banks or all
of the Banks); provided, the Agents may (but shall not be obligated
to) take such action, or refrain from taking such action, as is
permitted hereunder, with respect to such Liquidation Event as it
or they shall deem advisable in the best interests of the Banks.
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SECTION 11.11. Duty of Care. The Agents shall endeavor
to exercise the same care in its administration of the Facility
Documents as they exercise with respect to similar transactions in
which they are involved and where no other co-lenders or
participants are involved; provided that the liability of the
Agents for failing to do so shall be limited as provided in the
preceding paragraphs of this Article XI.
SECTION 11.12. Delegation of Agency. (i) If at any
time or times it shall be necessary or prudent in connection with
the exercise or protection of the Agents' rights hereunder in order
to conform to any law of any jurisdiction in which any of the
Collateral shall be located, or the Agents shall be advised by
counsel that it is so necessary or prudent in the interest of the
Banks, or the Agents shall deem it necessary for its or their own
protection in the performance of its or their duties hereunder, the
Agents and (to the extent required by the Agents) WGRC shall
execute and deliver all instruments and agreements reasonably
necessary or proper to constitute another bank or trust company, or
one or more individuals approved by the Collateral Agent (to the
extent necessary or required by the Collateral Agent) (each an
"Approved Delegate"), either to act as co-agent or co-agents or
trustee of all or any of the Collateral, jointly with the
Collateral Agent originally named herein or any successor, or to
act as separate agent or agents or trustee of any such Collateral.
In the event that WGRC shall not have joined in the execution of
such instruments or agreements with any Approved Delegate within
thirty (30) Business Days after the receipt of a written request
from the Collateral Agent to do so, or in case a Liquidation Event
shall have occurred and be continuing, WGRC hereby irrevocably
appoints the Agent as its agent and attorney to act for it under
the foregoing provisions of this Section 11.10 in such contingency.
Every separate agent and every co-agent and every trustee, other
than any agent which may be appointed as successor to the Facility
Agent, shall, to the extent permitted by applicable law, be
appointed to act and be such, subject to the following provisions
and conditions, namely:
(a) except as otherwise provided herein, all rights,
remedies, powers, duties and obligations conferred upon,
reserved or imposed upon the Facility Agent in respect of the
custody, control and management of moneys, paper or securities
shall be exercised solely by the Facility Agent hereunder;
(b) all rights, remedies, powers, duties and obligations
conferred upon, reserved to or imposed upon the Facility Agent
hereunder shall be conferred, reserved or imposed and
exercised or performed by the Facility Agent except to the
extent that the instrument appointing such separate agent or
separate agents or co-agent or co-agents or trustee shall
otherwise provide, and except to the extent that under any law
of any jurisdiction in which any particular act or acts are to
be performed, the Facility Agent shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, remedies, powers, duties and obligations shall be
exercised and performed by such separate agents or co-agent or
co-agents to the extent specifically directed in writing by
the Facility Agent;
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(c) no power given hereby to, or which it is provided
hereby may be exercised by, any such separate agent or
separate agents or co-agent or co-agents or trustee shall be
exercised hereunder by such separate agent or separate agents
or co-agent or co-agents or trustee except jointly with, or
with the consent in writing of, the Facility Agent, anything
herein contained to the contrary notwithstanding;
(d) no separate agent or co-agent or trustee constituted
under this Section 11.12 shall be personally liable by reason
of any act or omission of any other agent, separate agent, co-
agent or trustee hereunder; and
(e) the Facility Agent, at any time by an instrument in
writing, executed by it, may accept the resignation of or
remove any such separate agent or co-agent or trustee, and in
that case, by an instrument in writing executed by the
Facility Agent and WGRC (to the extent necessary or requested
by the Facility Agent) jointly may appoint a successor to such
separate agent or co-agent or trustee, as the case may be,
anything therein contained to the contrary notwithstanding.
In the event that WGRC shall not have joined in the execution
of any such instrument with a Person or entity within ten (10)
days after the receipt of a written request from the Facility
Agent to do so, or in the case a Liquidation Event shall have
occurred and be continuing, the Facility Agent, acting alone,
may appoint a successor and may execute any instrument in
connection therewith, and WGRC hereby irrevocably appoints the
Facility Agent its agent and attorney to act for it in such
connection in either of such contingencies.
(ii) The Agents may execute any of their duties under
the Facility Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel, and other specialists
and advisors (including affiliates of Shawmut) selected by it,
concerning all matters pertaining to such duties. The Agents shall
not be responsible for the negligence or misconduct of any such
agents, attorneys-in-fact, counsel and other specialists and
advisors selected by it with reasonable care.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Amendments, Etc. No amendment to or
waiver of any provision of this Agreement or the other Facility
Documents, nor consent to any departure by WGRC therefrom, shall in
any event be effective unless the same shall be in writing and
signed by WGRC, the Facility Agent and the Required Banks (with
concurrent notice thereof to the Rating Agency) provided, however,
that no such agreement shall (i) decrease the outstanding amount
of, or extend the repayment of or any scheduled payment date for
the payment of, any interest in respect of any Revolving Loan or
any fees owed to a Bank without the prior written consent of such
Bank; (ii) forgive or waive or otherwise excuse any repayment of
the Aggregate Loan Amount without the prior written consent of each
Bank affected thereby; (iii) increase the Commitment of any Bank
without its prior written consent (it being understood that
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increases in the L/C Facility Sub-Amount shall not constitute an
increase in the Commitment of any Bank); (iv) except as otherwise
expressly contemplated under Section 2.06(d) or Section 2.09, amend
or modify the Pro Rata Share of any Bank without its prior written
consent; (v) amend or modify the provisions of this Section 12.01
or the definition of "Majority Banks" or "Required Banks" without
the prior written consent of each Bank; (vi) without the prior
written consent of all Banks, waive any Liquidation Event arising
from an Insolvency Event with respect to WGRC or any Seller; (vii)
without the prior written consent of all Banks, waive, amend or
otherwise modify the definition of the Termination Date; (viii)
amend, modify or otherwise affect the rights or duties of the
Facility Agent, the Collateral Agent, the Issuing Bank or any other
Issuer hereunder without the prior written consent of such Person;
(ix) amend, waive or modify any definition or provision expressly
requiring the consent of all Banks, the Required Banks or Banks
with specified Pro Rata Shares without the prior written consent of
all Banks, Required Banks or Banks with specified Pro Rata Shares,
as applicable; and (x) without the prior written consent of all
Banks, amend, waive or modify any definition or provision which
would result in a decrease in the Applicable Reserve Ratio unless
the Rating Agency has confirmed in writing that such amendment,
waiver or modification would not cause its rating of the Facility
to be reduced or withdrawn (in which event such amendment, waiver
or modification shall still require the consent of the Required
Banks as set forth above). Any such waiver, consent or approval
shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on WGRC
in any case shall entitle WGRC to any other or further notice or
demand in the same, similar or other circumstances.
SECTION 12.02. No Waiver; Remedies. No waiver by the
Facility Agent, the Collateral Agent or the Banks of any breach or
default of or by WGRC under this Agreement shall be deemed a waiver
of any other previous breach or default or any thereafter
occurring. No failure on the part of the Facility Agent, the
Collateral Agent or the Banks to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder, or
any abandonment or discontinuation of steps to enforce such right,
power or privilege, preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
SECTION 12.03. Successors and Assigns; Assignment;
Participations. (a) Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include
the successors and permitted assigns of such party; all covenants,
promises and agreements by or on behalf of any parties hereto that
are contained in this Agreement shall bind and inure to the benefit
of their respective successors and permitted assigns. WGRC may not
assign or transfer any of its rights or obligations hereunder or
under any of the other Facility Documents without the written
consent of the Facility Agent and all of the Banks. Each of the
Banks, with the prior written consent of the Facility Agent and of
WGRC (each such consent not to be unreasonably withheld), may
assign any of its interests, rights and obligations hereunder to an
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Eligible Assignee; provided, that (i) the Commitment amount to be
assigned hereunder shall not be less than $10,000,000 (unless the
amount assigned either (x) constitutes all of the Commitment of the
assigning Bank or (y) is being assigned from one Bank to another
Bank already party to this Agreement and equals an amount not less
than $5,000,000), (ii) prior to the effective date of any such
assignment, the assignee and assignor shall have (1) executed and
delivered to the Facility Agent and to WGRC an Assignment and
Acceptance substantially in the form of Exhibit 12.03 hereto and
(2) paid a processing fee of $2500 to the Facility Agent, and (iii)
WGRC's consent shall not be necessary with respect to any
assignment by a Bank to an Affiliate of such Bank which is also an
Eligible Assignee. Upon the effectiveness of any such permitted
assignment, (i) the assignee thereunder shall, to the extent of the
interests assigned to it, be entitled to the interests, rights and
obligations of a Bank under this Agreement and (ii) the assigning
Bank shall, to the extent of the interest assigned, be released
from its obligations under this Agreement.
(b) Notwithstanding anything contained in paragraph (a)
of this Section 12.03, (i) each Bank may at any time pledge or
assign all or any portions of its interests and rights under this
Agreement to a Federal Reserve Bank, and (ii) each Bank may sell
participations in all or any part of any Revolving Loan or
Revolving Loans made or in all or any part of any Letter of Credit
issued by such Bank to another Bank or other financial institution
meeting the criteria of an Eligible Assignee; provided, that: (A)
no such grant of a participation shall, without the consent of
WGRC, require WGRC to file a registration statement with the
Securities and Exchange Commission or otherwise comply with the
blue sky laws of any state; (B) such Bank's obligations under this
Agreement shall remain unchanged and such Bank shall remain solely
responsible to WGRC for performance of such obligations; (C) WGRC
shall continue to deal solely and directly with the Bank in
connection with such Bank's rights and obligations under this
Agreement; (D) such participant shall agree to be bound by the
confidentiality provisions of Section 12.08 hereof and (E) no
holder of any such participation shall be entitled to require such
Bank to take or omit to take any action hereunder except that such
Bank may agree with such participant that, without such
participant's consent, such Bank will not consent to an amendment,
modification or waiver referred to in clauses (i) through (vii) of
Section 12.01. Any such participant shall not have any rights
hereunder or under the Facility Documents except that such
participant shall have rights under Sections 4.04, 4.06 and 4.08
hereunder as if it were a Bank; provided, that no such participant
shall be entitled to receive any payment pursuant to such sections
which is greater in amount than the payment which the transferor
Bank would have otherwise been entitled to receive in respect of
the participation interest so sold.
SECTION 12.04. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTERESTS OF THE COLLATERAL AGENT, THE
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FACILITY AGENT AND THE BANKS IN THE COLLATERAL OR REMEDIES
HEREUNDER OR THEREUNDER IN RESPECT THEREOF, ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO HEREBY AGREES TO THE NONEXCLUSIVE JURISDICTION
OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE CITY OF NEW YORK,
NEW YORK (AND ANY COURTS HEARING APPEALS FROM SUCH STATE OR FEDERAL
COURT) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS
BE MADE BY REGISTERED MAIL DIRECTED TO SUCH PARTY AT ITS ADDRESS
SPECIFIED IN SECTION 12.05 OR PROVIDED THEREIN. EACH OF THE
PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION
TO VENUE OF ANY ACTION INSTITUTED HEREUNDER WITHIN THE STATE OF NEW
YORK AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY ANY COURT IN SUCH STATE. NOTHING IN
THIS SECTION 12.04 SHALL AFFECT THE RIGHT OF ANY PARTY HEREUNDER TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
THE RIGHT OF THE COLLATERAL AGENT, THE FACILITY AGENT OR THE BANKS
TO BRING ANY ACTION OR PROCEEDING AGAINST WGRC OR ITS PROPERTY IN
THE COURTS OF ANY OTHER JURISDICTION OR JURISDICTIONS TO THE EXTENT
NECESSARY FOR REALIZING ON THEIR INTERESTS IN ANY COLLATERAL
GRANTED HEREUNDER. EACH OF THE PARTIES HERETO HEREBY EXPRESSLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT, POWER OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR UNDER OR IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES
THAT ANY SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY. THE TERMS AND PROVISIONS OF THIS SECTION CONSTITUTE A
MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
SECTION 12.05. Notices. Except as otherwise expressly
provided in this Agreement, any notice shall be conclusively deemed
to have been received by a party hereto and to be effective (i) if
sent by regular mail or commercial delivery service, on the day on
which delivered to such party at its address set forth below its
name on the signature pages hereto (or at such other address as
such party shall specify to the other parties hereto in writing),
(ii) if sent by telex, graphic scanning or other telecopy
communications of the sending party, when delivered by such
equipment to the number set forth below its name on the signature
pages hereto and confirmed by telephone or (iii) if sent by
registered or certified mail, on the day on which delivered to such
party (or delivery is refused), addressed to such party at such
address. Any notices required to be delivered to the Rating Agency
under this Agreement or any of the other Facility Documents shall
be addressed to the Rating Agency at the following address (or to
such other address as the Rating Agency may hereafter specify to
the other parties hereto in writing): Standard & Poor's
Corporation, 25 Broadway, Attn: Asset-Backed Surveillance Group,
New York, NY 10004, Telephone: (212) 208-8000; Telecopy: (212)
412-0225.
SECTION 12.06. Survival of Agreement. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making of
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the Revolving Loans and the issuance of any Letters of Credit and
the execution and delivery of this Agreement and shall continue in
full force and effect until the Collection Date has occurred and
all Letters of Credit issued hereunder have expired; provided,
however, that the indemnities contained in Sections 3.07, 4.06,
4.08, 10.03, 11.07 and 12.07 of this Agreement and the obligations
of the parties hereto under Section 12.08, shall be continuing and
shall survive any termination of this Agreement.
SECTION 12.07. Expenses; Indemnification. In addition
to the indemnification provisions set forth in Article X, WGRC
shall pay on demand (i) all reasonable out-of-pocket fees and
expenses (including reasonable attorneys fees and expenses) of the
Agents incurred in connection with the negotiation, preparation,
execution, delivery, administration, amendment, modification and
waiver of this Agreement and the other Facility Documents and the
making and repayment of the Revolving Loans and (ii) all out-of-
pocket fees and expenses of the Agents and the Banks (including
reasonable attorneys' fees and expenses of a single set of counsel
for the Banks which counsel shall be selected by the Facility
Agent, shall be reasonably acceptable to the Majority Banks and
shall be a major New York City law firm of international
reputation) incurred from and after a Liquidation Event in
connection with the enforcement of this Agreement and the other
Facility Documents against WGRC and the Sellers, including, without
limitation, any Servicer Fees paid to any third party other than
WGRC or the Sellers for services rendered to the Banks and the
Agents in collecting the Receivables and the other Purchased
Assets. In addition, WGRC will pay any and all stamp and other
taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing, recording or enforcement of
this Agreement or the other Facility Documents, and hereby
indemnifies and saves the Agents and the Banks harmless from and
against any and all liabilities with respect to or resulting from
any delay in paying or omission to pay such taxes and fees. All
payments owing by WGRC under this Section 12.07 shall be made
subject to the terms of Sections 9.07(c) and 9.08 hereof.
SECTION 12.08. Confidentiality. Each of the Agents, the
Issuing Bank and the Banks hereby acknowledges that the Records and
other information which it or WGRC receives from the Sellers may
contain information in which WGRC or the Sellers have a proprietary
interest and which may not, at the time of assignment and/or
delivery, be generally available to and known by the public
(including, without limitation, information relating to WGRC or the
Sellers contained in the Information Memorandum). Each of the
Agents, the Issuing Bank and the Banks hereby agrees, for the
benefit of WGRC and the Sellers, to maintain as confidential all
such information obtained from the Sellers or WGRC and not to
disclose such information to any other Person, provided, however,
that nothing in this Section 12.08 shall (x) impose any liability
on any Agent, Bank or Issuing Bank which has acted in accordance
with its customary standards for maintaining the confidentiality of
information relating to its corporate customers and (y) prevent any
Person from disclosing such information (i) to any permitted
assignee of WGRC, the Agents, the Issuing Bank or any Bank (or
their permitted prospective participants and assignees), provided
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that each such party agrees in writing, for the benefit of WGRC and
the Sellers, (x) to use such information and keep such information
confidential in accordance with the same terms set forth herein and
(y) that it will not disclose such information to any of its
Affiliates which is not a financial institution or a parent company
of a financial institution, (ii) to its employees, agents,
attorneys, auditors and accountants, (iii) subject to the further
requirements set forth in this Section 12.08, upon the order of any
court or administrative agency or upon the request or demand of any
regulatory agency, authority or official having jurisdiction over
the Agents, the Issuing Bank or Bank, as the case may be,
(iv) which has (other than through a breach of this Section 12.08)
been obtained from any Person other than WGRC, any Seller or any
other party hereto, or (v) to the extent that such information
(other than through a breach of this Section 12.08, has become
generally available to and known by the public subsequent to the
time of delivery hereunder. Any Bank, Agent or Issuing Bank (a)
will provide WGRC with prompt written notice of any subpoena or any
request or requirement by any governmental authority (other than
any such request or requirement in connection with an audit or
other regulatory review of a financial institution) for disclosure
of any confidential information so that WGRC and/or the Sellers may
seek a protective order or other appropriate remedy prior to such
disclosure and (b) shall consult with WGRC to a reasonable extent
on the advisability of taking legally available steps to resist or
narrow such request or requirement (it being understood that, after
such notice and consultation, such party shall be under no further
obligations to WGRC under this Section 12.08 to refrain from
disclosure in connection with such proceeding during the pendency
thereof as provided under clause (iii) of the immediately preceding
sentence). In the event that such protective order or other remedy
is not obtained, the affected Bank, Agent or Issuing Bank will
exercise reasonable efforts (x) to limit the information disclosed
to such information which it is legally required to disclose and
(y) to obtain assurance that confidential treatment will be
accorded any such information so disclosed, in each case only to
the extent that such efforts would not cause the affected Bank,
Agent or Issuing Bank to incur costs which it deems to be material.
SECTION 12.09. No Recourse. The obligations of WGRC
hereunder shall be solely its obligations and shall in all respects
be non-recourse to all of its officers, directors, controlling
persons or stockholders (including, without limitation, the
Sellers), and each of the Agents and the Banks acknowledges the
same with respect to WGRC and, to the fullest extent permitted by
law, waives any such recourse and any claim against any of such
parties arising hereunder; provided, however, that (a) the
foregoing shall be without prejudice to the rights that the Agents
and the Banks may have against the Sellers under the Receivables
Sale Agreement or for a breach of Wyman's duties as Servicer and
(b) nothing herein shall constitute a waiver of any rights the
Agents or any Bank may have against any Person on account of any
claim for intentional fraud, intentional deceit or intentional
material misrepresentation or omission.
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SECTION 12.10. No Proceedings. Each of the Agents and
the Banks hereby agrees that it will not institute against WGRC any
involuntary proceeding of the type referred to in the definition of
"Insolvency Event" so long as this Agreement remains in full force
and effect and for at least one year and one day following
termination of this Agreement.
SECTION 12.11. Execution in Counterparts; Severability.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
In case any provision in or obligation under this Agreement 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.
SECTION 12.12. Entire Agreement. This Agreement,
together with the other Facility Documents, including the exhibits
and schedules hereto and thereto, contains a final and complete
integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all previous oral statements and
other writings with respect thereto.
SECTION 12.13. Exhibits and Schedules. Upon the
execution and effectiveness of any Assumption Agreement pursuant to
Section 2.06 of the Receivables Sale Agreement, each of the
applicable schedules and exhibits hereto shall be automatically
deemed amended in accordance with such Assumption Agreement,
without any further action on the part of any of the parties
hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers and
delivered as of the day and year first above written.
WYMAN-GORDON RECEIVABLES CORPORATION
By: /s/ Luis E. Leon
Title: President
Notice Address:
P.O. Box 181
244 Worcester Street
North Grafton, Massachusetts 01536
Telephone: 508-839-8350
Telecopy: 508-839-7529
SHAWMUT BANK, N.A., individually,
as Facility Agent, as Collateral
Agent and as Issuing Bank
By: /s/ Matt O'Keefe
Title: Vice President
Notice Address:
446 Main Street - WO-10608
Worcester, Massachusetts 0160
Attention: Asset-Based Lending
Telephone: 508-893-4259
Telecopy: 508-793-4110
With copies to:
777 Main Street MSN-987
Hartford, Connecticut 06115
Attn: Suzanne Fischetti
Telephone: (203) 986-2226
Telecopy: (203) 986-4191
ABBEY NATIONAL TREASURY SERVICES PLC
By: /s/ Jonathan C. Nicholls
Title: Director
Notice Address:
Abbey House/Baker Street
London, NW1 6XL
UNITED KINGDOM
Attn: Head of Corporate Finance
Telephone: 011-44-71-612-4722
Telecopy: 011-44-71-612-4146
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BANCO DI NAPOLI
By: /s/ Francesco Di Mario
Title: Vice President
By: /s/ Claude P. Mapes
Title: First Vice President
Notice Address:
277 Park Avenue
New York, New York 10172-0002
Telephone: 212-872-2415
Telecopy: 212-872-2426
BANQUE ET CAISSE D'EPARGNE DE L'ETAT,
LUXEMBOURG
By: /s/ Paul Guillaume/ /s/ John Dhur
Title: Conseiller De Direction/
Conseiller De Direction
Notice Address:
1+2 Place de Metz
L1930 Luxembourg
GRAND DUCHY DE LUXEMBOURG
Attn: John Dhur
Telephone: 011-352-4015-4296
Telecopy: 011-352-4015-4284
With Copies to:
1211 Avenue of the Americas, 24th Floor
New York, NY 10036-8701
Patrick Wallerand
Attn: Patrick Wallerand
Telephone: 212-921-1136
Telecopy: 212-921-1950
RAIFFEISEN ZENTRALBANK OSTERREICH AG
By: /s/ Martin Gruell/ /s/ Michael Meyer
Title: Vice President/Manager
Notice Address:
Am Stadtpark 9
A-1030 Vienna
AUSTRIA
Attn: Kurt Bruckner
Telephone: 43-1-71707-1040
Telecopy: 43-1-71707-1473
With Copies to:
609 Fifth Avenue
New York, NY 10017
Attn: John Valiska
Telephone: 212-593-7593
Telecopy: 212-593-9870
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ANNEX I
DEFINED TERMS
When used in (i) that certain Receivables Purchase and Sale
Agreement by and among Wyman-Gordon Receivables Corporation as
purchaser and Wyman-Gordon Company, Wyman-Gordon Investment
Castings, Inc. and Precision Founders Inc. as sellers and (ii) that
certain Revolving Credit Agreement by and among Wyman-Gordon
Receivables Corporation, the "Banks", the "Collateral Agent" and
the "Facility Agent" (as each such term is defined below),
capitalized terms used in either such agreement and not otherwise
defined therein shall have the meanings set forth below:
"Accrued Carrying Costs" shall mean, as of any date, the sum
of (i) accrued and unpaid Reserved Carrying Costs as of such date
plus (ii) without duplication, the amount of Reserved Carrying
Costs that will, or are estimated to, have accrued by the next
Settlement Date as set forth in the then-effective Settlement
Statement.
"Actual Dilution" shall mean, for any Collection period, the
aggregate amount of Dilution during such Collection Period less, if
WGRC shall so elect with respect to any one and only one
Receivable, the Dilution for such Receivable to the extent arising
from any credits or series of related credits to the same Obligor,
where such credit or credits (i) exceed in the aggregate $100,000;
(ii) are granted for a billing error or related billing errors; and
(iii) are posted no later than five (5) Business Days after the
original invoice date for such Receivable.
"Adjusted Loss to Liquidation Ratio" shall mean the Loss to
Liquidation Ratio for all of the Receivables, recalculated to
exclude, from the numerator thereof, those Write-Offs recognized
and (without duplication) Receivable Notes issued during the
applicable three Collection Periods on account of Receivables owed
by a particular Obligor and its Consolidated Affiliates whenever
the aggregate amount of such Write-Offs recognized and Receivable
Notes taken during the applicable three Collection Periods on
account of such Obligor and its Consolidated Affiliates exceeds
$500,000. The underlying calculations for each of the six
Collection Periods preceding the first Settlement Date to be used
in future calculations of the Adjusted Loss to Liquidation Ratio
shall be as set forth in such Schedule 1.
"Affected Bank" shall have the meaning ascribed to such term
in Section 4.05 of the Revolving Credit Agreement.
"Affiliate" shall mean, with respect to any Person, a Person:
(i) that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with,
such Person; (ii) that beneficially owns or holds 5% or more of any
class of the voting stock (or, in the case of a Person that is not
a corporation, 5% or more of the equity interest) of such Person;
or (iii) 5% or more of the voting stock (or, in the case of a
Person that is not a corporation, 5% or more of the equity
interest) of which is beneficially owned or held, directly or
indirectly, by such Person. The term "control" shall mean the
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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 stock or any equity interest, by
contract, or otherwise. Notwithstanding the foregoing, (i) neither
the Banks, the Facility Agent nor the Collateral Agent shall be
deemed an "Affiliate" of WGRC or Wyman and (ii) so long as Cooper
Industries, Inc. beneficially owns less than 50% of the aggregate
voting stock of Wyman, Cooper Industries, Inc. shall not be deemed
an "Affiliate" of Wyman.
"Aged Receivables Ratio" shall mean the aged receivables ratio
calculated in the most recent Settlement Statement, which ratio
(expressed as a percentage) shall equal a fraction,
(1) the numerator of which equals the sum of (i) the aggregate
Outstanding Balances of Receivables (other than Termination
Receivables, Progress Billing Receivables and excluding
Receivables owed by Tier-1 Obligors) which were from 210 to
240 days past invoice date as of the most recent Cut-Off Date
plus (ii) the aggregate Outstanding Balances of Receivables
(other than Termination Receivables and Progress Billing
Receivables) which were (A) written off as uncollectible
during the most recently ended Collection Period, (B) not more
than 240 days past invoice date at the time of such write-off
and (C) not Receivables of Obligors of the type described in
clause (a) of the definition of "Eligible Obligor"; and
(2) the denominator of which equals the aggregate Original
Balances of all new Receivables (other than Termination
Receivables and Progress Billing Receivables) generated during
the Collection Period that occurred seven (7) Collection
Periods prior to the most recently ended Collection Period, as
determined as of the Cut-Off Date for such seventh prior
Collection Period.
The Aged Receivables Ratio calculated in any Settlement Statement
shall be the Aged Receivables Ratio from the Settlement Date
relating thereto until the next Settlement Date. The Aged
Receivables Ratio from the Effective Date until the first
Settlement Statement shall be as set forth on Schedule 1 hereto and
the underlying calculations for each of the seven Collection
Periods preceding the first Settlement Date to be used in future
calculations of the Aged Receivables Ratio shall be as set forth in
such Schedule 1.
"Agent" shall mean either the Facility Agent or the Collateral
Agent, as the context requires, and "Agents" shall mean each of the
Facility Agent and the Collateral Agent.
"Agent Fees" shall mean the agent fees owed by WGRC to Shawmut
Bank, N.A., as the Facility Agent and as the Collateral Agent (or
any successor Agents), as described in Section 4.02(c) of the
Revolving Credit Agreement.
"Aggregate L/C Amount" shall mean, at any time, the then
aggregate outstanding face amount of the Letters of Credit.
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"Aggregate Loan Amount" shall mean, at any time, the then
aggregate outstanding principal amount of the Revolving Loans.
"Aggregate Net Outstandings" shall mean, on any date, the sum
of the Aggregate Loan Amount and the Aggregate L/C Amount then
outstanding minus the amount of Available Cash, if any, which is
then being retained in the Collection Account as required under
Section 2.07 of the Revolving Credit Agreement.
"Alternate Base Rate" shall mean a fluctuating rate per annum
on any date equal to the higher of (i) the rate of interest most
recently publicly announced by the Facility Agent as its "prime,"
"reference" or "base" rate and (ii) a rate of interest equal to the
sum of (A) the Federal Funds Rate, plus (B) 0.50%. The Alternate
Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Facility Agent in connection with
extensions of credit. Changes in the Alternate Base Rate shall
take effect immediately upon their occurrence.
"Applicable Reserve Ratio" shall mean, at any time, the
greater of (A) the Minimum Required Reserve Ratio and (B) the sum
of the Required Reserve Ratios then in effect; provided, however,
that from and after any Reporting Date until the next Settlement
Date, the Applicable Reserve Ratio shall mean the greater of the
above percentage or the sum of the Required Reserve Ratios as
calculated in the most recently delivered Settlement Statement.
"Assignment and Acceptance" shall mean an assignment and
acceptance in substantially the form of Exhibit 12.03 to the
Revolving Credit Agreement.
"Assumption Agreement" shall mean an Assumption Agreement in
substantially the form of Exhibit F to the Receivables Sale
Agreement whereby a Subsidiary of Wyman becomes a new Seller under
said agreement.
"Available Cash" shall mean, at any time, all funds on deposit
in the Collection Account which are in excess of the then required
amount of the Carrying Costs Reserve.
"Average Dilution Ratio" shall mean, at any time, the average
of the Dilution Ratios for the Collection Periods occurring during
the twelve Collection Periods ending on the most recent Cut-Off
Date as calculated in the most recent Settlement Statement.
"Bankruptcy Code" shall mean Title 11 of the United States
Code, as amended from time to time, or any successor statute.
"Bank Percentage" shall mean a percentage calculated in
accordance with the following formula:
BP = ALA + ALCA
BA
where:
BP = the Bank Percentage;
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ALA = the Aggregate Loan Amount;
ALCA = the Aggregate L/C Amount; and
BA = the Base Amount.
"Banks" shall mean those financial institutions which have
agreed to make Revolving Loans and to issue or participate in
Letters of Credit pursuant to the Revolving Credit Agreement.
"Base Amount", as of any date, will equal (i) the result
obtained by multiplying (x) Net Eligible Receivables as of such
date times (y) 100% minus the Applicable Reserve Ratio minus (ii)
the Discount Rate Reserve.
"Base Rate Borrowing" shall mean a Borrowing consisting
Base Rate Loans.
"Base Rate Loan" shall mean a Revolving Loan interest on which
is calculated at a per annum rate based on the Alternate Base Rate.
"Benefit Plan" means any defined benefit plan as defined in
Section 3(35) of ERISA in respect of which any Seller or any ERISA
Affiliate of a Seller is an "employer" as defined in Section 3(5)
of ERISA.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowing" shall mean a group of Revolving Loans with a
single Funding Date or Conversion/Continuation Date and as to which
a single Interest Period is in effect.
"Business Day" shall mean any day except a Saturday, Sunday or
other day on which commercial banks in Boston, Massachusetts are
required or authorized by law to close and, when the term "Business
Day" is used (i) with respect to any Borrowing or funding under a
Letter of Credit, it shall mean any such day on which commercial
banks are open for business in New York City, New York and, so long
as any Bank's sole lending office is in a jurisdiction outside the
United States, also in such jurisdiction and (ii) with respect to
any Eurodollar Borrowing, it shall mean any such day on which
commercial banks are open for international business (including
dealings in Dollar deposits) in New York City, New York and London,
England; provided that (i) the term "Business Day" shall also not
include any day on which Wyman, with not less than ten days' prior
written notice to the Facility Agent, closes its corporate
headquarters so long as Wyman does not so close its headquarters
for more than five days in any one calendar year in addition to
those already described above and no more than two of such
additional days are consecutive and (ii) all Banks whose sole
lending offices are outside the United States shall, upon the
request of WGRC and/or the Facility Agent, give WGRC and the
Facility Agent reasonable advance notice of any holidays on which
they are not open for business during the forthcoming calendar
year.
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"Cameron" shall mean Cameron Forged Products Company, a
Delaware corporation and, following the acquisition thereof by
Wyman, a wholly-owned subsidiary of Wyman.
"Carrying Costs" shall mean, collectively, any Reserved
Carrying Costs and any Unreserved Carrying Costs.
"Carrying Costs Percentage" shall mean, on any date, the
carrying costs percentage appearing on the most recent Settlement
Statement, which percentage shall be computed, as of the most
recent Cut-Off Date by dividing (i) the sum of any Carrying Costs
(other than interest on the Revolving Loans, the L/C reimbursement
obligations or the Intercompany Notes) billed or, if not previously
billed, paid during the Collection Period then ended by (ii) the
aggregate Outstanding Balance of all Receivables as of such Cut-Off
Date. The Carrying Costs Percentage shall be determined monthly in
each Settlement Statement and such Carrying Costs Percentage shall
be the Carrying Costs Percentage for all purposes under the
Facility Documents from the Settlement Date relating thereto until
the next Settlement Date. The Carrying Costs Percentage from the
Effective Date until the first Settlement Date shall be as set
forth on Schedule 1 hereto. All fees and expenses which are paid
or payable on the Effective Date shall be excluded from the
computation of the Carrying Costs Percentage in the first
Settlement Statement.
"Carrying Costs Reserve" shall mean, on any date, the sum of
(i) Accrued Carrying Costs as of such date plus (ii) the product of
(a) the Aggregate Loan Amount times (b) the Cost of Funds Rate
divided by (c) twelve plus (iii) an accrual calculated to
reasonably approximate WGRC's estimated income tax liabilities as
owed to Wyman under the Company Documents; provided, however, that
WGRC may direct the Collateral Agent to increase the Carrying Costs
Reserve in order to simplify the daily allocations of funds
required under Section 9.07 of the Revolving Credit Agreement.
"Collateral" shall have the meaning assigned to such term in
Section 9.01 of the Revolving Credit Agreement.
"Collateral Agent" shall mean Shawmut Bank, N.A., in its
capacity as collateral agent for the Banks under the Revolving
Credit Agreement, and any successor thereto.
"Collection Account" shall have the meaning assigned to such
term in Section 9.03 of the Revolving Credit Agreement.
"Collection Agent" shall mean, at any time, the Person then
authorized pursuant to Article IX of the Revolving Credit Agreement
to service, administer and collect the Receivables on behalf of the
Banks.
"Collection Date" shall mean the date following the
Termination Date on which the aggregate Outstanding Balance of the
Receivables included in the Purchased Assets shall have been
reduced to zero, the Aggregate Loan Amount has been reduced to
zero, the Aggregate L/C Amount has been reduced to zero and/or cash
collateralized in full and WGRC has paid to the Banks and the
Agents in full all principal, interest, fees and other amounts owed
under the Facility.
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"Collection Period" shall mean each fiscal month of WGRC.
"Collections" shall mean, with respect to any Receivable or
all of the Receivables, as the case may be, all cash collections
and other cash proceeds of such Receivable or Receivables,
including, without limitation, all cash proceeds of Related
Security with respect to such Receivable or Receivables.
"Commitment" shall mean, as to any Bank, its commitment to
make Revolving Loans and to issue and/or participate in Letters of
Credit up to that dollar amount set forth opposite its name on the
signature pages to the Revolving Credit Agreement, (or, as
applicable, set forth in any amendment thereto entered into
pursuant to Section 2.10 thereof or set forth in any Assignment and
Acceptance entered into pursuant to Section 12.03 thereof) as such
dollar amount may be reduced pursuant to Section 2.06 of the
Revolving Credit Agreement or increased pursuant to Section 2.09
thereof, and "Commitments" shall mean the aggregate commitments of
the Banks to make Revolving Loans and to issue and/or participate
in Letters of Credit up to the Facility Amount (or, if less, up to
the Base Amount).
"Commitment Termination Date" shall mean the earlier of (i)
the Settlement Date which occurs not more than three calendar
months nor less than two calendar months before the fifth
anniversary of the Effective Date, as such date may be extended
pursuant to Section 2.06 of the Revolving Credit Agreement, and
(ii) the date the Commitments are reduced to zero in accordance
with Section 2.06(b) of the Revolving Credit Agreement.
"Company Documents" shall mean the following documents between
Wyman and WGRC dated as of even date with the Receivables Sale
Agreement: (i) that certain Ancillary Services and Lease Agreement
and (ii) that certain Tax Sharing Agreement.
"Consolidated Affiliate" shall mean, with respect to any
Person, any other Person whose financial statements are, or should
be under GAAP, consolidated with the financial statements of such
Person.
"Conversion/Continuation Date" shall mean, as to any
Borrowing, the date on which such Borrowing is converted into a
different Type of Borrowing or continued as the same Type of
Borrowing pursuant to Section 2.05 of the Revolving Credit
Agreement.
"Cost of Funds Rate" shall mean, on any date, the weighted
average of the per annum rates at which interest is then accruing
on the Revolving Loans (computed on the basis of a year of 365 or
366 days), as calculated in the most recent Settlement Statement
using the rates in effect and the Revolving Loans outstanding as of
the close of business on the most recent Cut-Off Date, provided
that, if no Revolving Loans are then outstanding, the Cost of Funds
Rate shall mean the lesser of (a) the Eurodollar Rate for an
Interest Period of one month plus five-eighths of one percent
(0.625%) and (b) the Alternate Base Rate, in each case as
calculated for such Cut-Off Date. The Cost of Funds Rate
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calculated in any Settlement Statement shall be the Cost of Funds
Rate from the Settlement Date relating thereto until the next
Settlement Date. The Cost of Funds Rate from the Effective Date
until the first Settlement Date shall be as set forth on Schedule
1.
"Credit and Collection Policy" shall mean, the credit policies
and procedures relating to the Receivables and Invoices as
described on Exhibit C to the Receivables Sale Agreement, as the
same may be amended from time to time in accordance with Section
4.03(c) of the Receivables Sale Agreement and Section 8.07 of the
Revolving Credit Agreement.
"Cut-Off Date" shall mean the last day of a Collection Period.
"Daily Report" shall mean the Daily Report substantially in
the form of Exhibit D-1 or Exhibit D-2 to the Receivables Sale
Agreement (as applicable) delivered by the Servicer on each
Business Day as required by Section 5.03(b) of the Receivables Sale
Agreement.
"Departing Bank" shall have the meaning ascribe to such term
in Section 2.10 of the Revolving Credit Agreement.
"Dilution" shall mean, with respect to any Receivable, the
actual reduction in the Original Balance of that Receivable as a
result of any claim or setoff of the Obligor or any other
adjustment made by the Servicer which reduction or adjustment arose
as a result of a Dilution Factor.
"Dilution Adjustment" shall mean, on any date, payments owed
by a Seller to WGRC pursuant to Section 2.02(f) of the Receivables
Sale Agreement on account of Dilution reported for such date with
respect to the Receivables, which payments shall equal the amount
of such Dilution.
"Dilution Factors" shall mean any adjustments to the
Outstanding Balances of the Receivables other than adjustments
which arise as a result of Collections, Write-Offs or the taking of
any Receivable Notes. Dilution Factors shall include, without
limitation, any credits, rebates, sales or other similar taxes,
cash discounts, volume discounts, cooperative advertising expenses,
allowances, disputes, billing errors, chargebacks, returned or
repossessed goods, inventory transfers, allowances for early
payments and other allowances and discounts that are made or
coordinated with Wyman's usual practices but shall not include
adjustments made on account of the applicable Obligor's inability
to pay the Outstanding Balance thereof.
"Dilution Horizon Variable" shall mean, at any time, an amount
calculated in the most recent Settlement Statement to equal a
fraction, the numerator of which equals the aggregate Original
Balances of new Receivables (other than Termination Receivables and
Progress Billing Receivables) generated during the two most recent
Collection Periods and the denominator of which equals the
aggregate Outstanding Balances of all Eligible Receivables as
determined on the most recent Cut-Off Date.
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"Dilution Ratio" shall mean the dilution ratio calculated in
the most recent Settlement Statement to equal a fraction (expressed
as a percentage) the numerator of which shall be Actual Dilution
during the most recent Collection Period on Receivables (other than
Termination Receivables and Progress Billing Receivables) and the
denominator of which shall be the aggregate Original Balances of
new Receivables (other than Termination Receivables and Progress
Billing Receivables) generated during the Collection Period which
ended two Collection Periods prior to the last Cut-Off Date;
provided, however, that if, for any three consecutive Collection
Periods, the aggregate amount of Actual Dilution during each such
Collection Period differs from the aggregate amount of Dilution
during such Collection Period, then the Dilution Ratio shall be
thereafter calculated using the aggregate amount of Dilution during
the most recent Collection Period (instead of Actual Dilution) on
Receivables (other than Termination Receivables and Progress
Billing Receivables) in the numerator thereof.
"Dilution Reserve Ratio" shall mean, commencing on any
Settlement Date and continuing until (but not including) the next
Settlement Date, an amount (expressed as a percentage) calculated
in accordance with the following formula:
DRR = [(2.5 x ADR) + [(HDR-ADR) x HDR)]] x DHV
ADR
where:
DRR = the Dilution Reserve Ratio;
ADR = the Average Dilution Ratio calculated in the most
recent Settlement Statement;
HDR = the highest average of the Dilution Ratios for any two
consecutive Collection Periods within the twelve
Collection Periods ending on the most recent Cut-Off
Date; and
DHV = the Dilution Horizon Variable calculated in the most
recent Settlement Statement.
The Dilution Reserve Ratio calculated in any Settlement Statement
shall be the applicable Dilution Reserve Ratio from the Settlement
Date relating thereto until the next Settlement Date. The Dilution
Reserve Ratio from the Effective Date until the first Settlement
Date shall be as set forth on Schedule 1 hereto and the Dilution
Ratios for the twelve Collection Periods preceding the first
Settlement Date to be used in future calculations of the Dilution
Reserve Ratio shall be as set forth in such Schedule 1.
"Discount Rate" shall mean, on any date, (i) the Cost of Funds
Rate plus (ii) the Carrying Costs Percentage, each as determined in
the most recent Settlement Statement with respect to which a
Settlement Date has occurred. The Discount Rate shall be
determined by the Servicer monthly in each Settlement Statement and
such Discount Rate shall be the Discount Rate for all purposes
under the Facility Documents from the Settlement Date relating
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<PAGE> 88
thereto until the next Settlement Date. The Discount Rate from the
Effective Date until the first Settlement Date shall be as set
forth in Schedule 1 hereto.
"Discount Rate Reserve" shall mean the discount rate reserve
calculated on each day which amount shall be calculated in
accordance with the following formula:
DRR = ACC + ANO X (FR + SFR) X (3 X T TD) - CCR
360
where:
DRR = the Discount Rate Reserve;
ACC = Acccrued Carrying Costs as of the date of
determination;
ANO = the Aggregate Net Outstandings as of the most recent
Reporting Date;
FR = the higher of the Cost of Funds Rate then in effect
and the Alternate Base Rate then in effect;
SFR = the per annum rate applicable to the Servicer Fee (if
the Servicer is a party other than Wyman, any other
Seller or WGRC);
CCR = the aggregate balance of funds in the Collection
Account on the date of determination which are
retained on account of the Carrying Costs Reserve; and
TD = Turnover Days for all of the Receivables as calculated
in the most recent Settlement Statement.
"Dissenting Bank" shall have the meaning ascribed to such term
in Section 2.06(c) of the Revolving Credit Agreement.
"Dollar" and the symbol "$" shall mean lawful money of the
United States of America.
"Effective Date" shall mean the date on which the conditions
precedent to the effectiveness of the Revolving Credit Agreement
have been satisfied (and/or waived) and the Facility Agent has
confirmed the effectiveness of the Revolving Credit Agreement.
"Eligible Assignee" shall mean any commercial bank with (i) a
combined capital and surplus of at least $500,000,000 and (ii) a
rating on such bank's long-term deposits of not less than A-3 (or
the equivalent thereof) from any such rating agency.
"Eligible Obligor" shall mean each Obligor that satisfies the
following criteria:
(a) it is not the United States of America, any foreign
government, any state, province or other local govern-
mental agency, or any department, agency or instru-
mentality thereof;
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(b) it is not an Affiliate of Wyman;
(c) as of the most recent Cut-Off Date, it was not the
subject of an Insolvency Event;
(e) as of the most recent Cut-Off Date, no more than 50% of
the aggregate Receivables owed by such Obligor and its
Consolidated Affiliates were (for reasons other than
disputes) aged more than 120 days past their respective
invoice dates; and
(f) as of the most recent Cut-Off Date, none of the past due
Receivables owed by such Obligor had been evidenced by
Receivable Notes.
"Eligible Receivable" shall mean, at any time, a Receivable
which satisfies the following criteria:
(1) Such Receivable is (i) denominated in U.S. Dollars;
(ii) non-interest bearing, and (iii) owed by an Eligible
Obligor;
(2) Such Receivable is in compliance with all applicable
laws, rules and regulations;
(3) Such Receivable represents a bona fide obligation
resulting from a sale of goods which have been shipped or
services which have been performed, and constitutes the
legally valid, binding and enforceable obligation of the
applicable Obligor in accordance with its terms;
(4) Such Receivable does not constitute a "bill and
hold" Receivable or other pre-billed obligation (including,
without limitation, any Progress Billing Receivables);
(5) Such Receivable arose from the sale of merchandise
or services in the ordinary course of the Seller's business;
(6) Such Receivable is not subject to any asserted
reduction, cancellation, refund or rebate or to any dispute,
offset, counterclaim, Lien (other than created under the
Facility Documents) or other defense, provided that (i) the
Outstanding Balance of any such Receivable which is otherwise
Eligible and is subject only in part to any of the foregoing
shall be Eligible to the extent not subject to any such
reduction, cancellation, refund, rebate, dispute, offset,
counterclaim, Lien or other defense; (provided, that if any
Lien is not in the nature of a dispute, offset or counterclaim
and attaches to any individual Receivable (and not Receivables
generally), such entire Receivable shall not be an Eligible
Receivable) and (ii) if any such Lien attaches to all of the
Receivables, such Lien shall not affect the eligibility of any
Receivables but shall instead operate as a reduction in the
Net Eligible Receivables as described in clause (iii) of the
definition thereof);
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(7) As of the most recent Cut-Off Date, such Receivable
was not aged more than 120 days past its invoice date;
(8) The sale of such Receivable and the Related Security
to WGRC and the grant of a security interest therein by WGRC
to the Collateral Agent does not conflict with any law, rule
or regulation or any contractual or other restriction,
limitation or encumbrance;
(9) The sale or assignment of such Receivable does not
require the consent of the Obligor or any other Person other
than any such consent which has been previously obtained;
(10) Such Receivable was created in accordance with and
otherwise complies with all applicable requirements of the
Credit and Collection Policy;
(11) Such Receivable is an "account" (and not chattel
paper, a general intangible or an instrument) within the
meaning of the UCC;
(12) WGRC's ownership interest and the Banks' security
interests in such Receivable shall have been perfected; and
(13) Such Receivable is not a Termination Receivable.
Without limiting the foregoing, Write-Offs and Receivables
evidenced by Receivable Notes shall not constitute Eligible
Receivables. In addition, for purposes of computing Net Eligible
Receivables on any date, no Receivable evidenced by an invoice for
an amount greater than $500,000 shall qualify as an Eligible
Receivable until the sixth Business Day after the date of such
invoice.
"ERISA" means the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means (i) any corporation which is a member
of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as WGRC or Wyman; (ii) a trade or
business (whether or not incorporated) under common control (within
the meaning of Section 414(c) of the Code) with WGRC or Wyman or
(iii) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as WGRC or Wyman, any
corporation described in clause (i) above or any trade or business
described in clause (ii) above.
"Eurodollar Borrowing" shall mean a Borrowing consisting of
Eurodollar Loans.
"Eurodollar Lending Office" shall mean, as to any Bank, the
office designated on the signature pages of the Revolving Credit
Agreement as the office through which such Bank makes Eurodollar
Loans whether or not such office is outside the United States of
America.
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"Eurodollar Loan" shall mean a Revolving Loan interest on
which is calculated at a per annum rate based on the Eurodollar
Rate.
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Borrowing, for any Interest Period, an interest rate determined by
the Facility Agent to be the average (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the rates per annum at
which Dollar deposits in immediately available funds are offered to
the Facility Agent's Eurodollar Lending Office two Business Days
prior to the beginning of such Interest Period by prime banks in
the interbank eurodollar market as at or about 10:00 a.m., Boston
time, for delivery on the first day of such Interest Period, for
the number of days comprised therein and in an amount equal to the
amount of such Eurodollar Borrowing.
"Excess Concentration Balances" shall mean for any Obligor and
its Consolidated Affiliates, the aggregate Outstanding Balances of
otherwise Eligible Receivables due from such Obligor and, without
duplication, its Consolidated Affiliates which, expressed as a
percentage of the aggregate Outstanding Balances of all Eligible
Receivables, exceeds the following percentages for the following
Obligors:
(a) 20% for any Tier-2 Obligor;
(b) 10% for any Tier-3 Obligor;
(c) 6-2/3% for any Tier-4 Obligor; and
(d) 4% for any Tier-5 Obligor;
provided, that WGRC may, by notice thereof in any Settlement
Statement (with concurrent notice to the Rating Agency), increase
or decrease the percentages set forth in the foregoing clauses for
all subsequent Collection Periods (until further changed in
accordance with the terms hereof) so long as (i) no Liquidation
Event or Unmatured Liquidation Event shall have occurred and be
continuing at the time such Settlement Statement is delivered, (ii)
the percentage set forth in clause (b) above shall at all times be
equal to one-half of the percentage in clause (a) above, (iii) the
percentage set forth in clause (c) above shall at all times be
equal to one-third of the percentage in clause (a) above, and (iv)
the percentage set forth in clause (d) above shall at all times be
equal to one-fifth of the percentage in clause (a) above. Any such
change to the foregoing percentages shall result in a corresponding
change to the Minimum Required Reserve Ratio, as set forth in the
definition thereof.
"Excess Foreign Obligor Balances" shall mean, as of any
date, the dollar amount by which the aggregate Outstanding Balances
of otherwise Eligible Receivables owing from Obligors which are not
residents of the United States or Canada and do not have a dollar-
denominated rating from the Rating Agency as of such day (other
than any such Receivables payment of which is supported by a letter
of credit or guarantee (i) issued by a domestic banking institution
rated at least "A" by the Rating Agency and (ii) assigned to the
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<PAGE> 92
Collateral Agent) exceeds five percent (5%) of the aggregate
Outstanding Balances of all Eligible Receivables as of such day.
"Extension Request" shall have the meaning ascribed to such
term in Section 2.06(c) of the Revolving Credit Agreement.
"Facility" shall mean the facility under the Revolving Credit
Agreement for Revolving Loans and for the issuance of Letters of
Credit.
"Facility Agent" shall mean Shawmut Bank, N.A., in its
capacity as agent for the Banks under the Revolving Credit
Agreement, and any successor thereto.
"Facility Amount" shall mean $65,000,000, as the same may be
increased pursuant to Section 2.09 of the Revolving Credit
Agreement and/or reduced pursuant to Section 2.06 of the Revolving
Credit Agreement.
"Facility Documents" shall mean collectively, the Receivables
Sale Agreement, the Revolving Credit Agreement, the Lock-Box
Agreements, the Company Documents, and all other agreements,
documents and instruments delivered pursuant thereto or in
connection therewith.
"Federal Funds Rate" shall mean, on any day, a fluctuating
interest rate per annum equal to the rate of interest offered in
the interbank market to the Facility Agent as the overnight Federal
funds rate as of about 10:00 a.m., Boston time, on such day (or, if
such day is not a Business Day, for the next preceding Business
Day).
"Final Collection Date" shall mean the thirteenth Settlement
Date from and after the Termination Date.
"Financial Advisor" shall mean BT Securities Corporation.
"Force Majeure Event" shall mean, with respect to any Person,
any riots, acts of God or the public enemy, acts of war, acts of
terrorists, epidemics, fire, equipment or power failures, flood,
embargoes, weather, earthquakes or similar events beyond the
control of such Person.
"Funding Date" shall mean, as to any Revolving Loan, the date
on which such Revolving Loan is made pursuant to Section 2.02 of
the Revolving Credit Agreement.
"GAAP" shall mean generally accepted accounting principles as
set forth from time to time in the opinions and pro nouncements of
the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by significant
segments of the accounting profession.
"Indebtedness" shall mean on any date, for any Person, without
duplication, (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
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<PAGE> 93
arising in the ordinary course of business which are payable
according to ordinary business terms, (iii) all obligations of such
Person as lessee under leases which shall have been, or should be,
in accordance with GAAP, recorded as capital leases, (iv) all
reimbursement obligations in respect of any letters of credit, (v)
all obligations secured by any Lien on the property of such Person,
(vi) all obligations of such Person under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise)
to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others
of the kinds referred to in clauses (i) through (vi) above, and
(vii) all net obligations of such Person arising under any
repurchase agreements or any interest rate or currency protection
or exchange agreements.
"Indemnified Amounts" shall have the meaning ascribed to such
term in Section 10.03 of the Revolving Credit Agreement.
"Information Memorandum" shall mean that certain Preliminary
Information Memorandum dated March 9, 1994 (as the same may have
been supplemented or otherwise updated by memorandum from the
Financial Advisor dated April 15, 1994) with respect to the
transactions contemplated under the Facility Documents.
"Initial Purchase Date" shall mean, (i) as to any Initial
Seller, the Effective Date and (ii) as to any other Seller, the
date on which WGRC makes its initial Purchase of Receivables from
such Seller.
"Initial Seller" shall mean Wyman, WGIC and PFI.
"Insolvency Event" shall mean, with respect to any Person, the
institution of any case or proceeding by or against such Person
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, dissolution, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property or the
taking of any corporate action by such Person to authorize any of
the foregoing actions.
"Intercompany Notes" shall mean the Short-Term Notes, the
Long-Term Notes and the L/C Note.
"Interest Period" shall mean:
(i) for each Eurodollar Loan comprising part of the same
Borrowing, the period commencing on the Funding Date or the
Conversion/Continuation Date of such Borrowing, as applicable,
and ending on the last day of the period selected by WGRC
pursuant to the terms of the Revolving Credit Agreement, which
period shall be one, two, or three months; and
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(ii) for each Base Rate Loan comprising part of the same
Borrowing, a period commencing on the Funding Date or the
Conversion/Continuation Date of such Borrowing and ending on
the immediately following Settlement Date, and thereafter
commencing on each Settlement Date and ending on the
immediately following Settlement Date.
provided, however, that (i) if any Interest Period would otherwise
end on a day that shall not be a Business Day, such Interest Period
shall end on the next succeeding Business Day (unless, with respect
to any Eurodollar Loan, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day) and (ii) if any
Interest Period with respect to a Eurodollar Loan would otherwise
end on a calendar day for which there is no corresponding calendar
day in the applicable subsequent calendar month, such Interest
Period shall expire on the last Business Day of such applicable
subsequent calendar month, and (iii) no Interest Period with
respect to any Eurodollar Loan shall end on a date later than the
Commitment Termination Date.
"Investment" shall mean, with respect to any Person, any
direct or indirect investment by such Person in any other Person,
whether by means of share purchase, capital contribution, loan or
otherwise, excluding the incurrence of receivables arising from
sales made or services rendered in the ordinary course of business
and excluding commission, travel and similar advances to officers,
directors and employees made in the ordinary course of such
Person's business.
"Invoice" shall mean an invoice issued by a Seller to an
Obligor in substantially one of the forms attached as Exhibit B to
the Receivables Sale Agreement, or such other writing approved by
the Facility Agent, pursuant to which such Obligor is obligated to
pay for the sale of goods, merchandise and/or services rendered by
the applicable Seller.
"IRC" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
"IRS" shall mean the Internal Revenue Service.
"Issuer" shall mean, (i) with respect to any Syndicated Letter
of Credit, each Bank in its capacity as an issuer thereof and (ii)
in the case of any Participated Letter of Credit, the Issuing Bank.
"Issuing Bank" shall mean Shawmut Bank, N.A., in its capacity
as the issuer of certain Letters of Credit pursuant to Article III
of the Revolving Credit Agreement.
"L/C Facility Sub-Amount" shall mean $35,000,000; provided,
however, that if the Facility Amount is increased pursuant to
Section 2.09 of the Revolving Credit Agreement, then the L/C
Facility Sub-Amount shall be increased by fifty percent (50%) of
the amount of such increase in the Facility Amount.
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"L/C Fee" shall have the meaning ascribed to such term in
Section 4.02(a) of the Revolving Credit Agreement.
"L/C Fronting Fee" shall have the meaning ascribed to such
term in Section 4.02(e) of the Revolving Credit Agreement.
"L/C Note" shall mean that certain L/C Note issued by WGRC in
favor of Wyman, for the benefit of Wyman and the other Sellers,
pursuant to Section 2.02(d) of the Receivables Sale Agreement.
"Letter of Credit" shall mean any letter of credit issued by
the Banks or by the Issuing Bank for the account of WGRC pursuant
to Article III of the Revolving Credit Agreement.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance,
security interest, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, the interest
of a lessor under a capitalized lease obligation, any financing
lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement, naming the
owner of the asset to which such Lien relates as debtor, under the
UCC or comparable law of any jurisdiction).
"Liquidation Event" shall mean any one of the following
events:
(a) The Settlement Statement delivered on any Reporting
Date shall show that, as of the preceding Cut-Off Date, the
Loss to Liquidation Ratio for all of the Receivables exceeded
five percent (5%); or
(b) The Settlement Statement delivered on any Reporting
Date shall show that, as of the preceding Cut-Off Date, the
Adjusted Loss to Liquidation Ratio for each of (1) the period
of three consecutive Collection Periods ending on such Cut-Off
Date and (2) the period of three consecutive Collection
Periods which immediately preceded the three Collection
Periods in subclause (b)(1), exceeded one percent (1%); or
(c) The Settlement Statements delivered on any two
consecutive Reporting Dates shall show that, as of the
preceding Cut-Off Date, the aggregate unpaid balance of
Receivables (excluding, however, Termination Receivables and
Progress Billing Receivables) which were more than 120 days
past invoice date (but which, in accordance with the Credit
and Collection Policy, had not yet been written off) exceeded
(i) until the earlier of (a) the first Cut-Off Date after
which Cameron has become a Seller and (b) December 31, 1994,
fifteen percent (15%) of the aggregate unpaid balance of all
Receivables or (ii) thereafter, twelve percent (12%) of the
aggregate unpaid balance of all Receivables; or
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(d) Either (i) failure by WGRC to make any mandatory
payment of principal or interest on the Revolving Loans when
required under the Facility Documents which failure continues
unremedied for three (3) Business Days; or (ii) failure by
WGRC or any Seller (whether individually or in its capacity as
Servicer or subservicer) to pay LIBOR breakage costs or any
Reserved Carrying Costs when due under the Facility Documents,
which failure continues unremedied for five (5) Business Days;
or (iii) failure by WGRC or any Seller (whether individually
or in its capacity as Servicer or subservicer) to pay any
other amount when due under the Facility Documents, which
failure continues unremedied for seven (7) Business Days;
provided, however, that if WGRC, the Servicer and/or a Seller
is unable to make a payment described above as a result of a
Force Majeure Event, then the time periods described above
shall be extended for so long as such Force Majeure Event
renders the Servicer, Seller or WGRC unable to make such
payment but in no event shall such extension exceed ten (10)
business days; or
(e) Any representation or warranty made by WGRC or by a
Seller (whether individually or in its capacity as the
Servicer or as subservicer) under or in connection with any
Facility Document, any Daily Report, any Settlement Statement
or other report, certificate, financial statement or
information furnished by a Seller and/or WGRC pursuant to the
Facility Documents shall prove to have been false or incorrect
in any material respect when made; provided, however, that (i)
the mistaken representation of a Receivable as an Eligible
Receivable shall not constitute a Liquidation Event unless and
until the relevant Seller has failed to make the requisite
cash payments owed under the Receivables Sale Agreement within
the time frame provided hereunder in respect of the
Noncomplying Receivables Adjustment arising from such
misrepresentation and (ii) if any such misrepresentation is
capable of cure within five (5) Business Days, then such
misrepresentation shall not constitute a Liquidation Event
unless and until WGRC or the relevant Seller, as applicable,
has failed to cure such misrepresentation within such time
period; or
(f) Any Seller (whether individually or in its capacity
as Servicer or as subservicer) shall fail to perform or
observe any term, provision, covenant, condition or agreement
contained in Article IV or Article V of the Receivables Sale
Agreement on its part to be performed or observed (other than
those referred to in clause (d) above) and any such failure
(other than failures which are not capable of cure and
failures with respect to Section 4.02(a) or Section 4.03(d) of
the Receivables Sale Agreement, either of which shall
constitute a Liquidation Event without any further lapse of
time) shall remain unremedied for five (5) Business Days or
more after written notice thereof shall have been given by
WGRC or the Facility Agent to such Seller; or
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(g) WGRC shall fail to perform or observe any term,
provision, covenant, condition or agreement contained in
Section 7.01(e) or Article VIII of the Revolving Credit
Agreement on its part to be performed or observed and, solely
with respect to Sections 8.03 and 8.13, any such failure shall
remain unremedied for five (5) Business Days or more after
written notice thereof shall have been given by the Facility
Agent to WGRC; or
(h) Either (i) any Seller shall fail to perform or
observe any other term, provision, covenant, condition or
agreement contained in the Receivables Sale Agreement or any
other Facility Document on its part to be performed or
observed (other than those covered by the other subsections of
this definition) and any such failure shall remain unremedied
for ten (10) Business Days after written notice thereof shall
have been given by WGRC or the Facility Agent to such Seller
or (ii) WGRC shall fail to perform or observe any term,
provision, covenant, condition or agreement contained in the
Revolving Credit Agreement or any other Facility Document on
its part to be performed or observed (other than those covered
by the other subsections of this definition) and any such
failure shall remain unremedied for ten (10) Business Days
after written notice thereof shall have been given to WGRC by
the Facility Agent; or
(i) An Insolvency Event shall have occurred with respect
to any Seller or WGRC; provided, however, that if such
Insolvency Event arises as a result of a involuntary
bankruptcy petition being filed against all or any Sellers but
not WGRC, the event described in this clause (i) shall not
mature into a Liquidation Event unless and until (a) such
proceeding shall continue undismissed for a period of 60 days,
(b) an order of relief shall be entered in such proceeding, or
(c) the applicable Seller shall acquiesce in such proceeding,
whichever is earliest; or
(j) Either Wyman shall cease to own (directly or
indirectly) 100% of the issued and outstanding shares of WGRC
or the Sellers shall cease to own 100% of the Intercompany
Notes, in each case free and clear of any Liens (except
Permitted Liens) or Wyman shall cease to own (directly or
indirectly) at least 80% of the issued and outstanding shares
of each other Seller; or
(k) Either the IRS or the PBGC shall have filed one or
more Liens against the assets of the Sellers or WGRC in an
aggregate amount exceeding $2,000,000 unless such amounts (i)
are adequately bonded to the satisfaction of the Facility
Agent or (ii) relate to taxes which are being contested in
good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained under GAAP; or
(l) The Servicer shall fail to perform or observe any
term, provision, covenant, condition or agreement to be
performed or observed on its part under Article V of the
Receivables Sale Agreement or under any other provision of any
other Facility Document (other than as referred to in other
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subsections of this definition) and any such failure shall
remain unremedied for five (5) Business Days after written
notice thereof shall have been given by WGRC or the Facility
Agent to the Servicer; provided, that any failure to deliver
the Daily Report on each Business Day for reasons other than a
Force Majeure Event or any failure to deliver the Settlement
Statement by the applicable Reporting Date for reasons other
than a Force Majeure Event, shall constitute a Liquidation
Event if such failure, in either case, remains unremedied for
one or more Business Days; or
(m) Either (i) WGRC shall cease to have a valid
first-priority ownership interest in the Receivables, all
Related Security or Collections therefrom or any other
Collateral; or (ii) the Collateral Agent shall cease to have a
valid first-priority security interest in the Collateral
(subject, however, in either case, to Permitted Liens); or
(n) The Aggregate Net Outstandings shall exceed the Base
Amount for a period of five or more consecutive Business Days
(after giving effect to all allocations of Collections and
purchases of Receivables made on each such day); provided,
that if such excess has resulted solely on account of a
downgrade in the rating of General Electric Company or United
Technologies Corporation (but not both) and the category
applicable to such Obligor in the definition of "Excess
Concentration Balances" has decreased by one (but not by more
than one), then a Liquidation Event shall occur under this
clause (n) only if such excess continues for a period of eight
or more consecutive Business Days; or
(o) Any proceedings shall have commenced and shall be
continuing to foreclose upon any Lien or other encumbrance on
any of the Collateral; or
(p) WGRC or any Seller shall become an "investment
company" within the meaning of the Investment Company Act of
1940, as amended; or
(q) Any non-appealable judgment or non-appealable order
for the payment of money shall be rendered against WGRC and
such judgment or order shall remain in effect and unpaid for a
period of ten (10) or more consecutive days.
"Liquidation Period" shall mean the period commencing on the
date on which the Sellers' obligation to sell and WGRC's obligation
to purchase Receivables under the Receivables Sale Agreement
terminates and continuing until the Collection Date. The
Liquidation Period shall commence on the earliest to occur of:
(i) the Commitment Termination Date;
(ii) the occurrence and continuance of a Liquidation Event
described in clause (i) or clause (p) of the definition
thereof;
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(iii) the eleventh Business Day following the occurrence and
during the continuance of a Liquidation Event described in
clause (d) of the definition thereof unless waived by the
Majority Banks or otherwise cured prior to such eleventh
Business Day;
(iv) the eleventh Business Day following the occurrence of a
Liquidation Event described in clause (n) of the definition
thereof, unless waived by the Required Banks prior to such
eleventh Business Day;
(v) the first Business Day following the date designated by
the Required Banks upon the occurrence and during the
continuance of any Liquidation Event (including, without
limitation, those described in clauses (iii), (iv) and (viii)
of this definition);
(vi) the date designated by Wyman to WGRC, to the Facility
Agent and the Banks by not less than ten (10) days nor more
than sixty (60) days prior written notice as the date on which
Wyman wishes to cease the sales of Receivables to WGRC;
(vii) the date designated by WGRC to the Sellers, to the
Facility Agent and the Banks by not less than three days nor
more than ten days prior written notice following the
occurrence and during the continuance of any Liquidation Event
as the date on which it wishes to cease the purchases of
Receivables from Wyman; or
(viii) the eleventh Business Day following Wyman's knowledge
of the occurrence of a Liquidation Event described in clause
(m) of the definition thereof, unless such Liquidation Event
is waived by the Required Banks or otherwise cured prior to
such eleventh Business Day.
"Lock-Box Account" shall mean any lock-box account or other
depositary account maintained for the purpose of receiving
Collections on the Receivables.
"Lock-Box Agreement" shall mean any agreement, in
substantially the form of Exhibit 9.03 to the Revolving Credit
Agreement, entered into among WGRC, the Collateral Agent and a
Lock-Box Bank.
"Lock-Box Bank" shall mean any of the banks holding one or
more Lock-Box Accounts.
"Long-Term Notes" shall mean those certain Long-Term Notes
issued by WGRC in favor of the Sellers on the Effective Date to
evidence WGRC's indebtedness in respect of the initial transfer of
Receivables from the Sellers.
"Loss Discount Ratio" shall mean, with respect to any Seller's
Receivables or all of the Receivables, as the case may be, the Loss
to Liquidation Ratio with respect thereto appearing on the most
recent Settlement Statement, recalculated to include in the
numerator thereof all Write-Offs and Receivables Notes taken during
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the applicable period, whether or not such Write-Offs and
Receivables Notes exceeded the Excess Concentration Balances for
the related Obligors. The underlying calculations for each of the
three Collection Periods preceding the first Settlement Date to be
used in future calculations of the Loss Discount Ratio shall be as
set forth in Schedule 1.
"Loss Reserve Ratio" shall mean, commencing on any Settlement
Date and continuing until (but not including) the next Settlement
Date, an amount (expressed as a percentage) calculated in
accordance with the following formula:
LRR = 2.5 x ARR x b
where:
LRR = the Loss Reserve Ratio;
ARR = the highest average of the Aged Receivables
Ratios for any three consecutive Collection
Periods that occurred during the period of twelve
consecutive Collection Periods ending on the most
recent Cut-Off Date; and
b = a fraction having (A) a numerator equal to the
aggregate Original Balances of all new
Receivables (other than Termination Receivables
and Progress Billing Receivables) generated
during the preceding four Collection Periods
preceding such Settlement Date, and (B) a
denominator equal to the aggregate unpaid balance
of all Eligible Receivables as calculated on the
most recent Cut-Off Date.
The Loss Reserve Ratio calculated in any Settlement Statement shall
be the applicable Loss Reserve Ratio from the Settlement Date
relating thereto until the next Settlement Date. The Loss Reserve
Ratio from the Effective Date until the first Settlement Date shall
be as set forth on Schedule 1 hereto and the underlying
calculations for each of the three Collection Periods preceding the
first Settlement Date to be used in future calculations of the Loss
Reserve Ratio shall be as set forth in such Schedule 1.
"Loss to Liquidation Ratio" shall mean, with respect to any
Seller's Receivables or all of the Receivables, as the case may be,
the applicable loss to liquidation ratio appearing on the most
recent Settlement Statement, which ratio (expressed as a percent-
age) shall be computed, as of the most recent Cut-Off Date, by
dividing (i) the excess, if any, of (A) the aggregate reduction in
the Outstanding Balances of such Receivables as a result of Write-
Offs during the three most recent Collection Periods plus without
duplication, the principal amount of all Receivable Notes taken in
respect of such Receivables during such three Collection Periods
(excluding from this clause (A), for any Obligor, Write-Offs and
Receivables Notes taken for Receivables which did not, in the
aggregate, exceed the Excess Concentration Balance for such Obligor
on the date such Receivables were written off or such Receivables
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Notes taken), over (B) any Collections received during such three
Collection Periods in respect of such Write-Offs and, without
duplication, such Receivable Notes by (ii) the aggregate amount of
Collections with respect to such Receivables received during such
three Collection Periods. The underlying calculations for each of
the three Collection Periods preceding the first Settlement Date to
be used in future calculations of the Loss to Liquidation Ratios
shall be as set forth in Schedule 1.
"Majority Banks" shall mean Banks whose Pro Rata Shares
aggregate more than fifty percent (50%).
"Material Adverse Effect" shall mean (i) any material adverse
effect upon the condition (financial or otherwise), operations,
properties or prospects of WGRC, (ii) any material adverse effect
upon the validity or enforceability of the Facility Documents or
any of the Liens created thereunder or (iii) any adverse effect
which, by itself or when taken together with all other such adverse
effects, would have a materially adverse effect on the validity,
enforceability or collectibility of the Receivables and the other
Purchased Assets taken as a whole (including, without limitation,
any such adverse effect on collectibility which arises as a result
of Wyman's or any other Seller's inability to perform its duties as
Servicer or as Collection Agent).
"Minimum Required Reserve Ratio" shall mean the sum of (i) the
Average Dilution Ratio for the most recent Cut-Off Date times the
Dilution Horizon Variable for the most recent Cut-Off Date plus
(ii) the percentage applicable from time to time to Tier-2 Obligors
with respect to the definition of Excess Concentration Balances;
provided, that in no event shall the Minimum Required Reserve Ratio
be less than fourteen percent (14%). The Minimum Required Reserve
Ratio calculated in any Settlement Statement shall be the
applicable Minimum Required Reserve Ratio from the Settlement
Statement relating thereto until the next Settlement Date. The
Minimum Required Reserve Ratio from the Effective Date until the
first Settlement Date shall be as set forth on Schedule 1 hereto.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is contributed to by WGRC,
Wyman or any ERISA Affiliate on behalf of its employees.
"Net Eligible Receivables" shall mean the aggregate
Outstanding Balances of Eligible Receivables as reported in the
most recent Daily Report minus the sum of (i) the aggregate amount
of the Excess Concentration Balances for each Obligor and its
Consolidated Affiliates then in effect, (ii) the Excess Foreign
Obligor Balances then in effect and (iii) the dollar amount of any
Liens which attach to the Eligible Receivables unless such Liens
(x) are for taxes, assessments or charges of any governmental
authority for amounts not yet due or (y) have been bonded in full
by or on behalf of the Sellers.
"Non-Usage Fee" shall have the meaning ascribed to such term
in Section 4.02(a) of the Revolving Credit Agreement.
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"Noncomplying Receivable" shall mean a Receivable which was
not an Eligible Receivable as of the date it was purchased by WGRC
from the applicable Seller.
"Noncomplying Receivables Adjustment" shall mean, with respect
to any Receivables which are identified on any date to a Seller by
WGRC as Noncomplying Receivables, the amounts owed by such Seller
to WGRC pursuant to Section 2.02(f) of the Receivables Sale
Agreement, which amounts shall equal (i) the Purchase Price
Percentage times the Original Balance of such identified
Noncomplying Receivables minus (ii) the aggregate amount of
Collections received by WGRC (and not previously the subject of an
adjustment to the Purchase Price payable pursuant to said Section
2.02(f)) with respect to any such Noncomplying Receivables and
minus (iii) the aggregate amount of Collections received by WGRC
with respect to any Noncomplying Receivables which were previously
reported to be Noncomplying Receivables and on account of which
Noncomplying Receivables Adjustments were previously made.
"Notice of Borrowing" shall mean a "Notice of Borrowing"
described in Section 2.03 of the Revolving Credit Agreement.
"Notice of Conversion/Continuation" shall mean a "Notice of
Conversion/Continuation" described in Section 2.05 of the Revolving
Credit Agreement.
"Obligations" shall have the meaning assigned to such term in
Section 9.01 of the Revolving Credit Agreement.
"Obligor" shall mean any Person obligated to make payments in
respect of a Receivable.
"Ordinary Course Expenses" shall mean the expenses of WGRC for
employee salaries, benefits, directors' fees, office lease
payments, office supplies, amounts owed under the Company
Documents, fees owed to the Lock-Box Banks, Federal, state and
local taxes and similar expenses incurred in the ordinary course of
its business other than (a) interest expense under the Intercompany
Notes and (b) other Carrying Costs specifically mentioned in the
definitions of Reserved Carrying Costs and Unreserved Carrying
Costs.
"Original Balance" shall mean, with respect to any Receivable,
the face amount of such Receivable on the date it was purchased by
WGRC, which face amount shall be calculated net of any credits
issued on the date of Purchase (or, in the case of Purchases on the
Effective Date, accrued through the date of Purchase) and reflected
in the Daily Report for such date.
"Outstanding Balance" shall mean, with respect to any
Receivable at any time, the then outstanding face amount thereof,
which is calculated by subtracting the Collections, Dilution and
Write-Offs relating to such Receivable from the Original Balance of
such Receivable.
"Participated Letter of Credit" shall mean, a Letter of Credit
issued by the Issuing Bank.
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"Permitted Investments" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having
maturities on or before the first Settlement Date after the date of
acquisition; (ii) time deposits and certificates of deposit having
maturities on or before the first Settlement Date after the date of
acquisition, maintained with or issued by any commercial bank
having capital and surplus in excess of $500,000,000 and having a
commercial paper rating not less than A-1+ or the equivalent
thereof from the Rating Agency; (iii) money market funds which are
rated AAA-m or AAA-mg by the Rating Agency; (iv) repurchase
agreements having maturities on or before the first Settlement Date
after the date of acquisition for underlying securities of the
types described in clauses (i) and (ii) above or clause (v) below
with any institution with a long term debt rating of AAA or a
commercial paper rating of A-1+; and (v) commercial paper maturing
on or before the first Settlement Date after the date of
acquisition and having a rating of not less than A-1+ from the
Rating Agency.
"Permitted Liens" shall mean (i) Liens for taxes, assessments
or charges of any governmental authority for amounts not yet due or
which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP; (ii) Liens
of landlords, carriers, warehousemen, mechanics and materialmen
imposed by law and created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance
with GAAP; (iii) any right of offset of an Obligor with respect to
payment of a Receivable which has the economic effect of a priority
claim; (iv) Liens of a collecting bank under Section 4-210 of the
UCC; and (v) other Liens not described in clause (i) above in favor
of the PBGC or the IRS which either (a) do not exceed $2,000,000 in
the aggregate at any one time outstanding or (b) have been bonded
in full by or on behalf of the Sellers.
"Person" shall mean an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, government (or any
agency or political subdivision thereof) or other entity.
"PFI" shall mean Precision Founders Inc., a California
corporation and a wholly-owned subsidiary of Wyman.
"Pro Rata Share" shall mean, as to any Bank, a fraction, the
numerator of which equals the Commitment of such Bank and the
denominator of which equals the Facility Amount.
"Progress Billing Receivables" shall mean any Receivables
arising pursuant to invoices for progress billings with respect to
work not yet completed.
"Purchase" shall mean a purchase by WGRC with regard to Pur-
chased Assets from the Sellers made pursuant to Article II of the
Receivables Sale Agreement.
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"Purchase Discount Rate Reserve Ratio" shall mean, with
respect to any Seller's Receivables a percentage calculated in the
most recent Settlement Statement in accordance with the following
formula:
PDRR = TD x (DR + PD)
360
where:
PDRR = the Purchase Discount Rate Reserve Ratio
applicable to such Seller's Receivables;
TD = the Turnover Days for such Seller's Receivables
during the prior Collection Period;
DR = the Discount Rate; and
PD = a profit discount equal to three percent (3%).
"Purchase Price" shall mean, with respect to any Purchase
under the Receivables Sale Agreement, the aggregate price to be
paid by WGRC to the applicable Seller, which price shall be
computed by multiplying the aggregate Original Balances of the
Seller's Receivables included in such Purchase by the then
effective Purchase Price Percentage applicable to such Receivables,
as such amount may be adjusted to reflect any Dilution Adjustment
or Noncomplying Receivables Adjustment calculated for the
applicable date of Purchase pursuant to Section 2.02(f) of the
Receivables Sale Agreement.
"Purchase Price Percentage" shall mean, with respect to any
Seller's Receivables, a percentage calculated in the most recent
Settlement Statement to equal 100% minus the sum of (i) the Loss
Discount Ratio applicable thereto and (ii) the Purchase Discount
Rate Reserve Ratio applicable thereto, as each such ratio has been
computed in such Settlement Statement. The Purchase Price
Percentage calculated in any Settlement Statement shall be the
applicable Purchase Price Percentage from the Settlement Date
relating thereto until the next Settlement Date. From the
Effective Date to the first Settlement Date, the applicable
Purchase Price Percentage shall be as set forth in Schedule 1
hereto.
"Purchased Assets" shall mean, with respect to any Purchase,
(a) the Receivables sold to WGRC by the applicable Seller on the
date thereof, (b) all Related Security relating to such Receivables
and (c) all Collections with respect to, and other proceeds of,
such Receivables and Related Security (including, without limita-
tion, all Receivable Notes received in respect thereof).
"Rating Agency" shall mean Standard & Poor's Corporation
("Standard & Poor's") or any successor rating agency acceptable to
the Facility Agent which issues a rating letter with respect to the
Facility in substitution for Standard & Poor's. If Standard &
Poor's is replaced as the Rating Agency, references to particular
ratings shall mean the corresponding rating of such successor
Rating Agency.
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"Receivable" shall mean all indebtedness of an Obligor
(whether constituting an account, chattel paper, or general
intangible) arising from the sale of merchandise or the furnishing
of services by a Seller, including all interest or finance charges
and other obligations of such Obligor with respect thereto, but
excluding any such indebtedness which is not denominated in U.S.
dollars. Until the Collection Date, each Write-Off and each
Receivable Note shall continue to constitute a Receivable until the
indebtedness of the Obligor thereunder shall have been paid in
full, extinguished by agreement between the applicable Seller and
such Obligor or otherwise extinguished pursuant to applicable law.
"Receivable Notes" means any promissory notes issued by an
Obligor to evidence a Receivable.
"Receivables Sale Agreement" shall mean that certain
Receivables Purchase and Sale Agreement dated as of May 20, 1994 by
and between the Sellers and WGRC, as the same may be amended,
restated or otherwise modified from time to time.
"Records" shall mean all Invoices and other documents, books,
records and other media for the storage of information (including,
without limitation, tapes, disks, computer programs and databases
and related property) maintained with respect to the Receivables
and the related Obligors.
"Regulations G, T, U and X" shall mean Regulations G, T, U and
X, respectively, as promulgated by the Board, or any similar
regulations substituted for any of the foregoing.
"Related Security" shall mean with respect to any Receivable:
(i) all of the applicable Seller's rights under the
Invoices;
(ii) all guarantees, indemnities, warranties, chattel
paper, insurance policies and proceeds and security
agreements and other agreements or arrangements of
whatever character from time to time supporting or
securing payment of such Receivable whether pursuant
to the Invoice related to such Receivable or
otherwise; and
(iii) all of the applicable Seller's residual right, title
and interest in and to all goods and/or merchandise
(including returned, repossessed or foreclosed goods
and/or merchandise) the sale of which gave rise to
such Receivable;
(iv) all of the applicable Seller's rights in, to and
under the (A) Records, (B) instruments, checks and
other forms of payment and (C) general intangibles
relating to such Receivable;
(v) when used with respect to WGRC, all of WGRC's right,
title and interest to and rights under the
Receivables Sale Agreement;
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(vi) the assignment to WGRC or the Collateral Agent, as
applicable, of all UCC financing statements covering
any collateral security for the payment of any of the
foregoing; and
(vi) all proceeds of the foregoing.
"Replacement Bank" shall have the meaning ascribed to such
term in Section 2.10 of the Revolving Credit Agreement.
"Reporting Date" shall mean the 15th calendar day of any
calendar month or, if such day is not a Business Day, then the
immediately succeeding Business Day.
"Required Banks" shall mean Banks whose Pro Rata Shares
aggregate more than 66 2/3%.
"Required Reserve Ratios" shall mean, as of any date, the Loss
Reserve Ratio and the Dilution Reserve Ratio which are then in
effect.
"Reserved Carrying Costs" shall mean any of the following
items: (i) interest on any Revolving Loans and L/C reimbursement
obligations owed under the Revolving Credit Agreement (exclusive of
any default interest owed under Sections 4.01(d) and 4.03(b)
thereof); (ii) interest on the Intercompany Notes (exclusive of any
default interest owed with respect thereto); (iii) L/C Fees; (iv)
L/C Fronting Fees; (v) Non-Usage Fees; (vi) Agent Fees; (vii)
letter of credit administrative fees; (viii) Ordinary Course
Expenses of WGRC not in excess of $50,000 in the aggregate during
any Collection Period; and (ix) Servicer Fees.
"Responsible Officer" shall mean, with respect to any Person,
any president, chairman of the board of directors, vice-president
(including any senior or executive vice-president) or treasurer of
such Person, in each case, acting in his or her capacity as such.
"Revolving Credit Agreement" shall mean that certain Revolving
Credit Agreement dated as of May 20, 1994 by and among WGRC, the
Facility Agent, the Issuing Bank, the Collateral Agent and the
Banks, as the same may be amended, restated or otherwise modified
from time to time.
"Revolving Loan" shall have the meaning ascribed to such term
in Section 2.01 of the Revolving Credit Agreement.
"Revolving Note" shall have the meaning ascribed to such term
in Section 2.02 of the Revolving Credit Agreement.
"Seller" shall have the meaning ascribed to such term in the
Receivables Sale Agreement.
"Seller's Receivable" shall mean (i) as to WGIC and PFI, a
Receivable arising from the sale of merchandise or the furnishing
of services by either of them and (ii) as to any other Seller, a
Receivable arising from the sale of merchandise or the furnishing
of services by such Seller.
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"Servicer" shall mean, at any time, the Person then authorized
pursuant to Article V of the Receivables Sale Agreement to service,
administer and collect the Receivables on behalf of WGRC.
"Servicer Fee" shall mean the fee paid to the Servicer by WGRC
pursuant to Section 5.03(c) of the Receivables Sale Agreement.
"Servicer Termination Event" shall mean (i) a Liquidation
Event or (ii) an Unmatured Liquidation Event which arises from the
gross negligence or willful misconduct of the Servicer in the
performance of its obligations under the Receivables Sale Agreement
or from a breach of the representations and warranties contained in
Section 3.03 of the Receivables Sale Agreement or (iii) any
Insolvency Event relating to the Servicer.
"Settlement Date" shall mean, with respect to any Collection
Period, the 20th calendar day of the next succeeding Collection
Period, or if such day is not a Business Day, then the immediately
succeeding Business Day.
"Settlement Statement" shall mean a report prepared by the
Servicer pursuant to Section 5.03(b) of the Receivables Sale
Agreement and signed by officers of WGRC and of the Collection
Agent which, among other things, certifies that no Liquidation
Event or Unmatured Liquidation Event has occurred and is
continuing, or, if any such Liquidation Event or Unmatured
Liquidation Event has occurred and is continuing, describing such
event and the steps, if any, which are being taken in respect
thereof. Each Settlement Statement shall be in substantially the
form of Exhibit E-1 or Exhibit E-2, as applicable, to the
Receivables Sale Agreement.
"Short-Term Loans" shall mean those certain loans which the
Sellers may advance to WGRC from time to time in lieu of cash
payment of the Purchase Price as provided in Section 2.02 of the
Receivables Sale Agreement, which loans are evidenced by and
subject to the terms and provisions of the Short-Term Note.
"Short-Term Notes" shall mean those certain Short-Term Notes
issued by WGRC in favor of the Sellers pursuant to Section 2.02(e)
of the Receivables Sale Agreement.
"Subsidiary" shall mean, as to any Person, any corporation or
other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the Board of
Directors or other Persons performing similar functions are at the
time directly or indirectly owned by such Person.
"Syndicated Letter of Credit" shall mean, a Letter of Credit
issued severally by the Banks.
"Taxes" shall have the meaning ascribed to such term in
Section 4.08 of the Revolving Credit Agreement.
"Termination Date" shall mean the date on which the
Liquidation Period commences.
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"Termination Receivables" shall mean Receivables which are
owed for expenses and penalties on account of the termination of a
purchase order and/or long-term supply arrangement.
"Tier-1 Obligor" shall mean any Obligor (i) that has (or whose
corporate parent has) a commercial paper rating from the Rating
Agency of at least A-1+ or (ii) that does not have (and does not
have a corporate parent which has) a commercial paper rating of at
least A-1+ but does have (or whose corporate parent has) a senior
actual or implied debt rating of at least AAA.
"Tier-2 Obligor" shall mean any Obligor (other than a Tier-1
Obligor) (i) that has (or whose corporate parent has) a commercial
paper rating from the Rating Agency of at least A-1 or (ii) that
does not have (and does not have a corporate parent which has) a
commercial paper rating of at least A-1 but does have (or whose
corporate parent has) a senior actual or implied debt rating of at
least A.
"Tier-3 Obligor" shall mean any Obligor (other than a Tier-1
Obligor or a Tier-2 Obligor) (i) that has (or whose corporate
parent has) a commercial paper rating from the Rating Agency of at
least A-2 or (ii) that does not have (and does not have a corporate
parent which has) a commercial paper rating of at least A-2 but
does have (or whose corporate parent has) a senior actual or
implied debt rating of at least BBB+.
"Tier-4 Obligor" shall mean any Obligor (other than a Tier-1
Obligor, a Tier-2 Obligor or a Tier-3 Obligor) (i) that has (or
whose corporate parent has) a commercial paper rating from the
Rating Agency of at least A-3 or (ii) that does not have (and does
not have a corporate parent which has) a commercial paper rating of
at least A-3 but does have (or whose corporate parent has) a senior
actual or implied debt rating of at least BBB-.
"Tier-5 Obligor" shall mean any Obligor which is not a Tier-1
Obligor, a Tier-2 Obligor, a Tier-3 Obligor or a Tier-4 Obligor.
"Turnover Days" shall mean, with respect to any Seller's
Receivables or all of the Receivables, as the case may be, as
calculated in any Settlement Statement, that period (expressed in
days) calculated as (a) one-half of the sum of the aggregate
Outstanding Balances of such Receivables as of the last two Cut-Off
Dates divided by (b) the aggregate Original Balances of such
Receivables generated during the most recent Collection Period
multiplied by (c) the number of days in such Collection Period.
From the Effective Date until the first Settlement Statement, the
Turnover Days for each Seller's Receivables and all of the
Receivables shall be calculated as set forth on Schedule 1, and the
underlying calculations for each of the three Collection Periods
preceding the first Settlement Date to be used in future
calculations of such Turnover Days shall be as set forth in such
Schedule 1.
"Type" of Borrowing shall mean a Base Rate Borrowing or Euro-
dollar Borrowing, as the case may be.
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"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York, except to the extent that
the validity or perfection of any Lien created under any Facility
Document or any remedy in respect thereof is governed by the laws
of a jurisdiction other than the State of New York, in which case
(but only to such extent) the term "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction.
"Unmatured Liquidation Event" shall mean an event or condition
which, with the passage of time or the giving of notice or both
would constitute a Liquidation Event.
"Unreserved Carrying Costs" shall mean any of the following
items: (i) default interest owed under Sections 4.01(d) or 4.03(b)
of the Revolving Credit Agreement, Section 2.04 of the Receivables
Sale Agreement or the Intercompany Notes; (ii) Ordinary Course
Expenses of WGRC in excess of $50,000 in the aggregate during any
Collection Period; (iii) indemnification amounts owed under
Sections 3.07(a), 4.06 and 9.04(b) of the Revolving Credit
Agreement; and (iv) other amounts payable in accordance with
Sections 4.04, 4.08, 9.05, 10.03 and 12.07 of the Revolving Credit
Agreement.
"WGIC" shall mean Wyman-Gordon Investment Castings, Inc., a
Delaware corporation and a wholly-owned subsidiary of Wyman.
"WGRC" shall mean Wyman-Gordon Receivables Corporation, a
Delaware corporation.
"WGRC Percentage" shall mean 100% minus the Bank Percentage.
"Write-Off" shall mean all or a portion of a Receivable that,
consistent with the applicable Credit and Collection Policy, has
been or should be (i) specifically assigned to a category reserved
for doubtful Receivables or otherwise recorded on the applicable
Seller's or WGRC's books as a Receivable the collectibility of
which is doubtful or (ii) (without duplication) written off such
Seller's or WGRC's books as uncollectible.
"Wyman" shall mean Wyman-Gordon Company, a Massachusetts
corporation.
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<PAGE> 1
EXHIBIT 99.8
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of May 20, 1994
among
WYMAN-GORDON COMPANY,
WYMAN-GORDON INVESTMENT CASTINGS, INC.
and
PRECISION FOUNDERS INC.
as the Sellers
WYMAN-GORDON COMPANY,
as the Servicer
and
WYMAN-GORDON RECEIVABLES CORPORATION
as the Purchaser
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<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
SECTION PAGE
<S> <C> <C>
Parties 1
Preambles 1
ARTICLE I DEFINITIONS 1
1.01 Certain Definitions 1
1.02 Accounting Terms 1
1.03 Other Terms 2
1.04 Computation of Time Periods 2
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES 2
2.01 Agreement to Purchase 2
2.02 Effective Date Transactions; Sellers'
Representations 4
2.03 Calculation of Purchase Price 7
2.04 Payments and Computations, etc. 8
2.05 Transfer of Records to WGRC 8
2.06 Additional Sellers 9
ARTICLE III REPRESENTATIONS AND WARRANTIES 10
3.01 Representations and Warranties of the
Sellers 10
3.02 Representations and Warranties of WGRC 14
3.03 Representations and Warranties of the
Servicer 15
ARTICLE IV GENERAL COVENANTS OF THE SELLERS 16
4.01 Affirmative Covenants of the Sellers 16
4.02 General Reporting Requirements of the
Sellers 20
4.03 Negative Covenants of the Sellers 22
ARTICLE V ADMINISTRATION AND COLLECTION 24
5.01 Collection of Receivables 24
5.02 Designation of Servicer 25
5.03 Duties of the Servicer; Daily Reports and
Settlement Statements; Servicer Fee 26
5.04 Responsibilities of the Sellers 28
5.05 Further Action Evidencing Purchases 28
5.06 Application of Collections 29
ARTICLE VI INDEMNIFICATION 29
6.01 Indemnities by the Sellers 29
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
ARTICLE VII MISCELLANEOUS 32
7.01 Amendments, etc. 32
7.02 Notices, etc. 33
7.03 No Waiver; Remedies 33
7.04 Binding Effect; Assignability 33
7.05 GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE;
WAIVER OF JURY TRIAL 34
7.06 Costs, Expenses and Taxes 35
7.07 Confidentiality 35
7.08 Execution in Counterparts; Severability 36
7.09 Termination Date 36
7.10 No Recourse 37
7.11 No Proceedings 37
7.12 Entire Agreement 37
7.13 Survival of Agreement 37
</TABLE>
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<PAGE> 4
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of May 20, 1994
THIS RECEIVABLES PURCHASE AND SALE AGREEMENT (the
"Agreement"), dated as of May 20, 1994 is among Wyman-Gordon
Company, a Massachusetts corporation ("Wyman"), Wyman-Gordon
Investment Castings, Inc., a Delaware corporation ("WGIC"),
Precision Founders Inc., a California corporation ("PFI") and
Wyman-Gordon Receivables Corporation, a Delaware corporation
("WGRC") (Wyman, WGIC and PFI, the "Initial Sellers" and, together
with each other corporation that may hereafter become a party
hereto pursuant to Section 2.06, being hereinafter referred to
collectively as the "Sellers.")
WITNESSETH:
WHEREAS, all of the issued and outstanding capital
stock of WGRC is or, pursuant to the terms of Section 2.02 hereof,
will be owned by the Initial Sellers;
WHEREAS, WGRC was formed for the purpose of
purchasing accounts receivable and certain related assets from the
Sellers and engaging in other activities incidental thereto;
WHEREAS, the Initial Sellers and WGRC have agreed to
enter into this Agreement to evidence the terms and conditions
under which such purchases shall take place; and
WHEREAS, the Initial Sellers and WGRC have agreed
that Cameron Forged Products Company ("Cameron"), shall become a
"Seller" hereunder following the date after which (i) all of the
outstanding stock of Cameron has been acquired by Wyman and (ii)
the accounts receivable factoring arrangements entered into by
Cameron and Cooper Industries, Inc. ("Cooper") in connection with
such acquisition have been terminated and Cameron has repurchased
such accounts from Cooper;
NOW THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each
party hereto, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Definitions. For all purposes
of this Agreement, except as otherwise specifically provided
herein, capitalized terms used in this Agreement without definition
shall have the meanings ascribed to such terms in Annex 1 hereto.
SECTION 1.02. Accounting Terms. Under this Agree-
ment, all accounting terms not specifically defined herein shall be
interpreted, all accounting determinations made and all financial
statements prepared in accordance with GAAP.
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<PAGE> 5
SECTION 1.03. Other Terms. All other undefined
terms contained in this Agreement shall, unless the context
indicates otherwise, have the meanings provided for by the UCC to
the extent the same are used or defined therein. The words
"herein," "hereof," and "hereunder" and other words of similar
import refer to this Agreement as a whole, including the annexes,
exhibits and schedules hereto, as the same may from time to time be
amended or supplemented and not to any particular section,
subsection, or clause contained in this Agreement, and all
references to Sections, Annexes, Exhibits and Schedules shall mean,
unless the context clearly indicates otherwise, the Sections hereof
and the Annexes, Exhibits and Schedules attached hereto, the terms
of which Annexes, Exhibits and Schedules are hereby incorporated
into this Agreement. Whenever appropriate, in the context, terms
used herein in the singular also include the plural, and vice
versa.
SECTION 1.04. Computation of Time Periods. In this
Agreement, in the computation of a period of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but
excluding."
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Agreement to Purchase. (a) On the
terms and conditions hereinafter set forth, on each Business Day
from and after the Initial Purchase Date applicable to any Seller
until the occurrence of the Termination Date, WGRC agrees (except
as otherwise provided in Section 2.01(c)) to purchase from such
Seller, and each such Seller agrees to sell to WGRC, all of such
Seller's right, title and interest in and to all of its Receivables
outstanding as of the Business Day before such date, which have not
been previously purchased by WGRC, together with all of the Related
Security relating to such Receivables and all Collections with
respect to and other proceeds of such Receivables and Related
Security (including, without limitation, all Receivables Notes
received in respect thereof). For purposes of the foregoing
sentence, a Receivable with respect to which an invoice has been
withheld from mailing due to perceived billing errors shall not be
deemed outstanding and shall not be purchased by WGRC hereunder
until such invoice has been internally approved by the appropriate
Seller. Until the Termination Date, each Purchase described in the
preceding sentence shall occur no later than 4:00 p.m. (Boston
time) on the date of such Purchase concurrently with payment of the
Purchase Price required under Section 2.02 (or, in the case of the
initial Purchase hereunder, concurrently with such payment, the
making of the loans under the Long-Term Notes and the contribution
to capital by each Initial Seller described herein). Prior to
making any Purchase hereunder, WGRC may request from any Seller,
and such Seller shall promptly deliver, such approvals, opinions,
information, reports or documents as WGRC may reasonably request.
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<PAGE> 6
(b) It is the intention of the parties hereto that
each Purchase of Receivables to be made hereunder shall constitute
a "sale of accounts," as such term is used in Article 9 of the UCC,
and not a loan secured by such accounts and Seller shall have no
rights or obligations hereunder to repurchase or otherwise
reacquire any of the Receivables. Except for Noncomplying
Receivables Adjustments and Dilution Adjustments, each sale of
Receivables by a Seller to WGRC is made without recourse to such
Seller; provided, however, that (i) each Seller shall be liable to
WGRC for all representations, warranties and covenants made by such
Seller pursuant to the terms of Section 6.01 of this Agreement, and
(ii) such sale does not constitute and is not intended to result in
an assumption by WGRC or any assignee thereof of any obligation of
any Seller or any other Person arising in connection with the
Receivables, the Related Security and the related Invoices, or any
other obligations of the Sellers. In view of the intention of the
parties hereto that the Purchases of Receivables to be made
hereunder shall constitute a sale of such Receivables rather than a
loan secured by such Receivables, each Seller agrees to note in its
financial statements that its Receivables have been sold to WGRC.
(c) Notwithstanding any other provision of this
Article II, WGRC shall not purchase from any Seller nor shall any
Seller sell to WGRC any Receivables on or after the earlier of (i)
the Termination Date, (ii) the date of any Insolvency Event
occurring with respect to such Seller or WGRC or (iii) the
discovery by Wyman, WGRC or any Seller of any Liquidation Event
described in clause (m) of the definition thereof with respect to
the Receivables to be sold by such Seller; provided, however that
if:
(A) such Insolvency Event arises as a result of an
involuntary bankruptcy or other proceeding filed
against a Seller, and such proceeding is dismissed
or otherwise terminated prior to the Termination
Date; or
(B) such Insolvency Event arises as a result of an
involuntary bankruptcy or other proceeding filed
against a Seller, and (1) WGRC, the Facility Agent
and the Rating Agency shall have received an order
from the court having jurisdiction of such matter,
which order (x) is satisfactory to the Facility
Agent and the Rating Agency, (y) approves the
continuation of sales of Receivables by such Seller
or Sellers to WGRC hereunder and (z) provides that
WGRC and its assigns (including the Banks and the
Agents) can rely on such order for the validity and
nonavoidance of such sales and (2) the Rating Agency
shall have issued a reconfirmation of its rating
with respect to the Facility; or
(C) such Liquidation Event is cured prior to the
Termination Date;
then, in any such case, WGRC shall automatically resume its
purchase of Receivables from such Seller or the Sellers hereunder
unless and until the Termination Date has otherwise occurred in
accordance with the terms hereof.
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<PAGE> 7
SECTION 2.02. Effective Date Transactions; Sellers'
Representations; Payment for Purchases; Adjustments to Purchase
Price. (a) On the Effective Date, each Initial Seller shall make
a contribution to the capital of WGRC equal to the Purchase Price
of all of its Receivables which are not paid for in cash or by
delivery of a Long-Term Note, in exchange for which contribution
the Initial Sellers shall collectively receive all of the common
stock of WGRC. Each Long-Term Note shall be substantially in the
form of Exhibit A-3 attached hereto. WGRC hereby agrees that it
shall, subject to the terms and provisions of the Revolving Credit
Agreement and upon the request of any Seller from time to time,
request the Banks to make a Borrowing of Revolving Loans under the
Revolving Credit Agreement. All proceeds received by WGRC from
such Borrowings shall be remitted to, and shall be applied by, the
Sellers in the same manner and to the same extent as if such
proceeds constituted Available Cash to be distributed and applied
pursuant to Section 9.07(c) of the Revolving Credit Agreement. If,
after the Effective Date, any Seller elects to advance to WGRC and
WGRC agrees to borrow additional loans (other than the loans
evidenced by the Short-Term Notes and the L/C Note described
below), then such Seller may make such additional loans under its
Long-Term Note, the terms of which shall govern the repayment of
such loans. The applicable Seller may evidence the making of any
such additional loan or loans by recording the date and amount
thereof on the grid attached to its Long-Term Note; provided that
failure to make any such recordation on such grid or any error in
such grid shall not adversely affect such Seller's rights to
recover the outstanding amount of such loan. It is expressly
acknowledged and agreed that nothing in this Section 2.02(a) shall
require any Seller to advance, or require WGRC to borrow, any such
additional loans (other than the loans evidenced by the Short-Term
Notes and the L/C Note described below).
(b) Each Purchase of Receivables hereunder shall be
consummated through WGRC's payment of the applicable Purchase Price
therefor in cash, except (i) as otherwise provided in Section
2.02(d) or (e) below, and (ii) that WGRC may set off against the
amount of any such payment amounts then owing to WGRC as Dilution
Adjustments and Noncomplying Receivables Adjustments as provided in
Section 2.02(f) below and/or other uncontested amounts owing to
WGRC under this Agreement.
(c) It shall be a condition precedent to each Purchase
hereunder from a Seller that (i) the representations and warranties
of such Seller contained in Section 3.01 are correct in all
material respects as to it and as to the Receivables purchased from
it in such Purchase on and as of such day as though made on and as
of such date (except for representations and warranties which
relate to a specific date only), and (ii) no event has occurred and
is continuing, or would result from such Purchase, which
constitutes a Liquidation Event. Each Seller, by accepting the
proceeds of the Purchase Price for a Purchase, shall be deemed to
have certified to WGRC the satisfaction of the foregoing conditions
precedent; provided, however, that such Seller shall not be deemed
to have certified the non-existence of a Liquidation Event of which
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<PAGE> 8
it does not have knowledge which Liquidation Event may have arisen
solely on account of actions or omissions of WGRC. Upon the
payment of the Purchase Price for any Purchase, title to the
Purchased Assets included in such Purchase shall vest in WGRC,
whether or not the conditions precedent to such Purchase were in
fact satisfied.
(d) WGRC may elect to pay all or part of the applicable
Purchase Price for all Purchases of Receivables to be made on any
day by paying cash or, at the request of the Sellers, by causing
the Issuing Bank or the Banks severally (as applicable) to issue a
Letter of Credit in favor of beneficiaries selected by the Sellers
and in form and substance acceptable to WGRC. In the event that
the Sellers request that any purchases be paid for by issuance of a
Letter of Credit, the Sellers shall on a timely basis provide WGRC
with such information as is necessary for WGRC to obtain such
Letter of Credit from the Issuing Bank or the Banks. No Seller
shall have any reimbursement obligations in respect of any draws
under any Letter of Credit. The face amount of each Letter of
Credit shall be applied in the following order of priority: (i) as
a deduction from the applicable Purchase Price otherwise payable by
WGRC; (ii) to the extent such face amount exceeds such Purchase
Price, as a reduction in the principal amounts owed under the
Short-Term Notes (allocated among the Short-Term Notes as Wyman
shall direct); (iii) to the extent the aggregate principal amount
outstanding under the Short Term Notes has been reduced to zero, as
a reduction in the principal amounts owed under the Long-Term Notes
(allocated among the Long-Term Notes as Wyman shall direct); and
(iv) to the extent the aggregate principal amount outstanding under
the Long-Term Notes has been reduced to zero, as a credit against
the Purchase Price payable to the Sellers for future purchases of
Receivables; provided, however, that if such credit is not fully
utilized on the earlier of (i) the Termination Date and (ii) the
date on which such particular Letter of Credit is drawn, then the
Sellers shall pay to WGRC, in consideration of the applicable
portion of the L/C Note, cash in an amount equal to the unutilized
amount of such credit. The aggregate amount of deductions,
reductions and credits described in clauses (i) through (iv) of the
immediately preceding sentence shall be evidenced by an L/C Note in
the form of Exhibit A-1 hereto in a notional principal amount of
$35,000,000 and in an initial principal amount equal to the sum of
such deductions, reductions and credits, and shall be payable to
Wyman, for the benefit of the Sellers, in accordance with the terms
and provisions of the L/C Note, this Agreement and Article IX of
the Revolving Credit Agreement. The principal amount of the L/C
Note shall be increased by the amount of each subsequent deduction,
reduction and credit described above and reduced by the amount of
each draw on any Letter of Credit. Any payments or credits made on
or with respect to the L/C Note shall be allocated among the
Sellers as the Sellers may mutually agree. In the event that a
Letter of Credit (as the same may be extended, replaced or renewed
and after giving effect to any partial draws) expires or is
otherwise terminated undrawn, a portion of the principal amount of
the L/C Note equal to the undrawn face amount of such Letter of
Credit shall be payable to Wyman, for the benefit of the Sellers,
within 15 Business Days thereafter.
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(e) If, on any day, WGRC has insufficient funds to pay in
full the Purchase Price owed on such day, or if the Sellers
otherwise consent, WGRC may pay all or part of the applicable
Purchase Price to be made on such day by borrowing under its Short-
Term Notes, each in the form of Exhibit A-2 attached hereto and
issued in favor of each Seller, and each Seller shall have
irrevocably agreed to advance, and shall be deemed to have
advanced, a revolving loan in the amount so specified by WGRC;
provided, however, that WGRC may not make payments of Purchase
Prices through the use of such revolving loans if, as a result
thereof, either (i) the aggregate unpaid principal amount of the
Short-Term Notes would exceed the lesser of (A) $15,000,000 and (B)
10% of the aggregate Outstanding Balance of Receivables of all the
Sellers or (ii) the aggregate unpaid principal amount of any
Seller's Short-Term Note would exceed the maximum stated amount
thereof, and subject (in either case) to the requirements set forth
in Section 8.02 of the Revolving Credit Agreement. Each such
revolving loan shall be payable in accordance with the terms and
provisions of the Short-Term Notes, this Agreement and Article IX
of the Revolving Credit Agreement. Each Seller may evidence the
making of each revolving loan by recording the date and amount
thereof on the grid attached to its Short-Term Note; provided, that
failure to make any such recordation on such grid or any error in
such grid shall not adversely affect such Seller's rights to
recover the outstanding unpaid principal amount of the revolving
loans made under its Short-Term Note. WGRC hereby agrees, to the
extent reasonably practicable, to use its best efforts to allocate
the amount of revolving loans made on any day under the Short-Term
Notes ratably among the Sellers according to the respective
Purchase Prices owed to each Seller for Receivables sold on such
date.
(f) On each Business Day after its Initial Purchase Date,
each Seller shall (or shall cause the Servicer to) report the
amount of Dilution which occurred with respect to such Seller's
Receivables on the prior Business Day, and the Dilution Adjustment
owing on account of such Dilution shall be deducted from the
applicable Purchase Price which would, but for this Section
2.02(f), otherwise be payable to such Seller on such date. If any
such Dilution relates to goods which are returned to a Seller or
repossessed by a Seller, then, concurrently with payment of such
Dilution Adjustment (whether through offset or otherwise), WGRC
shall assign and transfer to such Seller, without any further
action or consideration, all of WGRC's right, title and interest in
and to such returned or repossessed goods. In addition, if, on the
Business Day immediately preceding such date, WGRC has (i) notified
any Seller that any Receivables previously sold to WGRC under this
Agreement have been discovered to be Noncomplying Receivables and
(ii) requested that such Seller pay to WGRC a Noncomplying
Receivables Adjustment on account of such Noncomplying Receivables,
then such Noncomplying Receivables Adjustment shall also be
deducted from the applicable Purchase Price which would, but for
this Section 2.02(f), otherwise be payable to such Seller on such
date. If the sum of the applicable Dilution Adjustment and the
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Noncomplying Receivables Adjustment on any date exceeds the
applicable Purchase Price otherwise owing to a Seller, WGRC shall
be entitled to a reduction in the principal amount outstanding
under the applicable Short-Term Note in an amount equal to such
excess and, in the event the principal amount outstanding under
such Short-Term Note has been reduced to zero, to a credit against
the Purchase Price otherwise payable for future purchases of
Receivables from such Seller; provided, however, that if any such
credit is not fully utilized within five Business Days, such Seller
shall pay to WGRC the remaining amount of any such credit on the
next following Business Day in cash. If, on any date, the Servicer
notifies WGRC that WGRC has received Collections on account of a
Noncomplying Receivable for which a Noncomplying Receivables
Adjustment was previously made, then the amount of such Collections
must be added to the Purchase Price otherwise payable to the
applicable Seller on such date.
SECTION 2.03. Calculation of Purchase Price. (a) The Purchase
Price Percentage applicable to Purchases from each Seller hereunder
shall be set forth in Schedule 1 of Annex I hereto for the period
from the Effective Date until the first Settlement Date.
Thereafter and from and after each subsequent Settlement Date, the
Purchase Price Percentage applicable to Purchases from each Seller
hereunder shall be as set forth in the most recent Settlement
Statement prepared by the Servicer pursuant to Section 5.03(b) (or,
in the case of any Seller other than an Initial Seller, for the
period from such Seller's Initial Purchase Date until the next
Settlement Date, as set forth in such Seller's Assumption
Agreement) and the Purchase Prices owed to each Seller for any
Business Day shall be as set forth in the Daily Report prepared by
the Servicer pursuant to Section 5.03(b). Each Seller agrees to
provide to the Servicer on a timely basis all information necessary
to calculate the applicable Purchase Price Percentage and the
applicable Purchase Price.
(b) Until WGRC shall notify any Seller or the Servicer of any
exceptions to the calculations contained in any Daily Report or
Settlement Statement (copies of which notices shall be concurrently
sent to the Agents), each such Daily Report and Settlement
Statement shall be deemed to be correct as originally delivered.
If WGRC shall have notified any Seller or the Servicer and the
Agents of any exceptions to the Daily Report or Settlement
Statement, such Seller, the Servicer, WGRC and the Agents shall
promptly endeavor to resolve the matters set forth in such notice.
Until such resolution is agreed upon, however, the Daily Report or
Settlement Statement originally delivered by the Servicer shall,
absent manifest error, continue to be presumed correct for purposes
of calculating the applicable Purchase Price payable hereunder
until a resolution is reached to the contrary. Nothing contained
in this Section 2.03(b), however, shall be deemed to limit the
rights of WGRC under Section 6.01.
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SECTION 2.04. Payments and Computations, Etc. All amounts to
be paid by WGRC to any Seller or by any Seller to WGRC hereunder
shall be paid in accordance with the terms hereof no later than
4:00 p.m. (Boston time) on the day when due in Dollars in
immediately available funds to such account as such Seller or WGRC,
as applicable, may from time to time specify in writing. Payments
received by any Seller or WGRC after such time shall be deemed to
have been received on the next Business Day. In the event that any
payment becomes due on a day which is not a Business Day, then such
payment shall be made on the next succeeding Business Day. Each
party hereto shall, to the extent permitted by law, pay to the
other party interest on all amounts not paid when due hereunder,
from and after the Business Day immediately following the Business
Day such party receives notice thereof from the other party until
such amounts are paid in full, at 2% per annum above the Discount
Rate in effect on the date such payment was due (subject, in the
case of payments owing by WGRC, to the provisions of Section 9.07
and 9.08 of the Revolving Credit Agreement); provided, however,
that such interest rate shall not at any time exceed the maximum
rate permitted by applicable law. All computations of interest
payable hereunder shall be made on the basis of a year of 365 or,
as applicable, 366 days for the actual number of days (including
the first but excluding the last day) elapsed.
SECTION 2.05. Transfer of Records to WGRC. (a) Each Purchase
of Receivables hereunder shall include the transfer to WGRC of all
of the applicable Seller's right and title to and interest in the
Records relating to such Receivables, and each Seller hereby agrees
that such transfer shall be effected automatically with each such
Purchase, without any further documentation. In connection with
such transfer, each Seller hereby grants to WGRC an irrevocable,
non-exclusive license to use, without royalty or payment of any
kind, all software used by such Seller to account for the
Receivables, to the extent necessary to administer the Receivables,
whether such software is owned by such Seller or is owned by others
and used by such Seller under license agreements with respect
thereto. The license granted hereby shall be irrevocable, and
shall terminate on the Collection Date.
(b) Each Seller shall take such action requested by WGRC,
from time to time hereafter, that may be necessary or appropriate
in the opinion of WGRC on the part of such Seller to ensure that
WGRC has (i) an enforceable ownership interest in the Records
relating to the Receivables purchased from the Sellers hereunder
and (ii) an enforceable right (whether by license or sublicense or
otherwise) to use all of the computer software used to account for
the Receivables and/or to recreate such Records.
(c) Notwithstanding the foregoing, it is expressly understood
and agreed by the parties hereto that, as of the date hereof: (i)
Cameron utilizes software (the "Cameron Software") owned by
Computer Associates to account for its Receivables, and (ii)
Computer Associates is not willing to grant to WGRC or the Servicer
an enforceable right to use such Cameron Software. WGRC agrees
that, upon the addition of Cameron as a Seller hereunder, Cameron
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shall not be required to grant WGRC or the Servicer an enforceable
right to use the Cameron Software, provided that (y) if each of
WGRC and the Servicer has not been granted such a right on or
before March 31, 1995, then Cameron shall cease to use the Cameron
Software to account for the Receivables and shall process all data
relating to the Receivables pursuant to software programs which
WGRC and the Servicer each has an enforceable right to use and (z)
unless and until WGRC and the Servicer each has an enforceable
right to use Cameron's accounts receivable software, Cameron shall,
(1) on each Business Day, download from the Cameron Software all
information relating to the Receivables generated by it and program
such information into a spreadsheet which will be readable pursuant
to "Excel," "Lotus," or similar software program and in a format
which is consistent with the other Sellers' computer records
relating to the Receivables; and (2) as frequently as the Servicer,
WGRC or the Collateral Agent may request, forward to the Servicer,
WGRC and/or the Collateral Agent computer disks containing such
spreadsheet information. If, by March 31, 1995, Cameron has not
satisfied the conditions described in clause (y) of the immediately
preceding sentence, then the Receivables sold by Cameron hereunder
shall thereafter not constitute Eligible Receivables unless and
until such conditions are satisfied.
SECTION 2.06. Additional Sellers. At any time prior to the
Termination Date, Wyman may designate any U.S. Subsidiary of which
it owns (directly or indirectly) at least 80% of the issued and
outstanding stock as an additional "Seller" hereunder and such
Subsidiary shall, subject to the conditions precedent set forth
below, become a "Seller" for all purposes and to the same extent as
if originally a party hereto and shall be bound by and entitled to
the benefits of this Agreement. Without limiting the foregoing, it
is expressly understood and agreed by the parties hereto that
Cameron shall become a "Seller" hereunder when the conditions set
forth herein and in the recitals to this Agreement with respect
thereto have been satisfied. The addition of any Subsidiary as a
"Seller" hereunder shall be subject to the satisfaction of the
conditions precedent that (i) such additional Seller shall have
executed an Assumption Agreement substantially in the form of
Exhibit F attached hereto (with the annexes thereto appropriately
completed); (ii) except as otherwise contemplated in Section
2.05(c), the representations and warranties made by the Initial
Sellers as of the Effective Date shall be made by such additional
Seller as of its Initial Purchase Date and shall be true and
correct as to such additional Seller in all respects as of such
date; (iii) WGRC, the Facility Agent and the Rating Agency shall
have received, in form and substance satisfactory to each of them,
an executed copy of such Assumption Agreement and such evidence of
corporate existence and good standing, secretary's certificates,
UCC lien search reports, UCC financing statements, legal opinions
and similar documentation required of the Initial Sellers on or
prior to the Effective Date (with sufficient copies of all such
documentation for delivery to the Banks) and such other
documentation as may be reasonably required by WGRC, the Facility
Agent or the Rating Agency; and (iv) in the case of any additional
Seller other than Cameron, the Rating Agency shall have confirmed
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in writing that such addition will not cause its rating of the
Facility to be reduced or withdrawn. Upon the satisfaction of all
such conditions precedent with respect to any such additional
Seller, each of the applicable schedules and exhibits hereto shall
be automatically deemed amended in accordance with the applicable
Assumption Agreement, without any further action on the part of any
of the parties hereto. Prior to or within a reasonable time
following the addition of any new Seller under this Section 2.06,
WGRC (or the Facility Agent as its designee) shall have the right
to conduct a review of any additional Seller's books and records
relating to the Receivables sold or to be sold by such Seller, the
costs and expenses of which review shall be borne by Wyman and/or
such new Seller as Wyman and such Seller may mutually agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the Sellers.
Each Seller represents and warrants that as of the Initial Purchase
Date with respect to such Seller and (except for representations
and warranties which relate to a specific date only) as of the date
of each Purchase:
(a) Such Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of its state of
incorporation and has all governmental licenses, authorizations,
consents and approvals required to carry on its business, and is in
good standing in each jurisdiction in which its business is now
conducted, except where the absence of such licenses,
authorizations, consents, approvals or good standing would not have
a Material Adverse Effect.
(b) The execution, delivery and performance by such Seller of
this Agreement, the other Facility Documents to which it is a party
and all other agreements, instruments and documents executed and
delivered by such Seller hereunder and thereunder, and the
transactions contemplated hereby and thereby, are within such
Seller's corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not (i) result in
or require the creation of any Lien upon or with respect to any
Purchased Assets except as created in favor of WGRC hereunder nor
result in or require the creation of any material Lien with respect
to its other properties; (ii) violate, conflict with or result in a
breach or default under such Seller's charter or by-laws; (iii)
violate, conflict with or result in a breach or default under any
law, rule or regulation applicable to such Seller or its property;
(iv) violate, conflict with or result in a breach or default under
any contractual restriction contained in any indenture, loan,
credit agreement or bond; (v) violate, conflict with or result in a
breach or default under any lease, mortgage, security agreement,
note, or other agreement or instrument binding on such Seller or to
which its property is subject, which violation, breach or default
would have a Material Adverse Effect; or (vi) violate, conflict
with or result in a breach of any order, writ, judgment, award,
injunction or decree binding on such Seller or to which its
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property is subject. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law. This Agreement
has been duly executed and delivered on behalf of such Seller.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body, governmental agency or official or other Person is
required for the due execution, delivery and performance by such
Seller of this Agreement, any other Facility Document to which it
is a party or any other agreement, document or instrument delivered
hereunder or thereunder except for the filing of UCC Financing
Statements to evidence WGRC's ownership interests in the
Receivables and other Purchased Assets purchased hereunder and all
proceeds thereof, which filings have been duly made and are, and on
or prior to each Purchase will be, in full force and effect, and
for other consents which have been duly obtained.
(d) This Agreement and each of the other Facility Documents
to which such Seller is a party each constitutes the legal, valid
and binding obligation of such Seller enforceable against such
Seller in accordance with its terms.
(e) Immediately prior to WGRC's Purchase of each Purchased
Asset sold by such Seller hereunder, such Seller is or will be the
lawful owner of, and have good title to, such Purchased Asset, free
and clear of all Liens except Permitted Liens. Upon the Purchase
of each Receivable sold by such Seller hereunder, WGRC shall
acquire all of the right and title to and interest of such Seller
in such Receivable and all other Purchased Assets relating thereto,
free and clear of any Liens (except Permitted Liens) and shall have
a valid, perfected first priority ownership interest in such
Receivables, subject only to Permitted Liens. The Purchases of the
Purchased Assets by WGRC constitute true and valid sales and
transfers for consideration (and not merely a pledge of such
Purchased Assets for security purposes), enforceable against
creditors of such Seller and no Purchased Assets shall constitute
property of such Seller. No effective financing statement or other
instrument similar in effect covering all or any part of such
Purchased Assets naming such Seller as assignor or debtor shall at
such time be on file in any filing or recording office except as
may be filed in favor of WGRC or its assigns pursuant to the
Facility Documents.
(f) The use of all funds received by such Seller under this
Agreement will not violate Regulations G, T, U and X, as in effect
from time to time.
(g) No information, exhibit, financial statement, document,
book, record or report (including, without limitation, the
Information Memorandum) furnished or to be furnished by such Seller
(whether individually or in its capacity as Servicer or sub-
servicer, as the case may be) to WGRC, the Agents, the Banks and/or
the Issuing Bank in connection with this Agreement or any of the
other Facility Documents is or shall be inaccurate in any material
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respect, or contains or shall contain any material misstatement of
fact, or omits or shall omit to state a material fact or any fact
necessary to make the statements contained therein not materially
misleading in light of the circumstances under which they were
made, in each case, as of the date it is or shall be dated or
(except as otherwise disclosed to WGRC or the foregoing parties, as
the case may be, at such time) as of the date so furnished.
(h) The principal place of business and chief executive
office of such Seller are located at the address of such Seller
referred to in Section 7.02 hereof and the locations of the offices
where the Records and computer software are kept, together with
each other location within the states of Massachusetts and New
Hampshire where the Sellers conduct business, are listed on
Schedule 3.01(h) (or at such other locations, notified to WGRC and
the Agents in accordance with Section 4.01(d), in jurisdictions
where all action required by Section 5.05 has been taken and
completed).
(i) Each Obligor has been instructed to remit payment on the
Receivables either to (1) one of the Lock-Box Accounts to be
utilized by WGRC or (2) via wire transfer, directly to the
Collection Account. From and after its Initial Purchase Date, such
Seller will have no right, title and/or interest to any of the
Lock-Box Accounts and will maintain no lock-box accounts in its own
name for the collection of such Receivables. The account numbers
of all Lock-Box Accounts, together with the names and addresses of
all the Lock-Box Banks maintaining such Lock-Box Accounts, are
specified in Schedule 3.01(i).
(j) During the five-year period prior to the Initial Purchase
Date, such Seller has had no trade names, fictitious names, assumed
names or any other names under which it has done or is doing
business except as set forth in Schedule 3.01(j).
(k) There are no actions, suits or proceedings pending, or to
the knowledge of such Seller, threatened, against it or affecting
it or its property in any court, or before any arbitrator of any
kind, or before or by any governmental body, which (i) challenge
the validity, legality or enforceability of this Agreement or any
of the other Facility Documents, or (ii) would have a Material
Adverse Effect.
(l) All of the computer software used by such Seller to
account for the Receivables is set forth in Schedule 3.01(l)
hereto. The Servicer, WGRC and their respective assigns (including
any successor Servicers) have (or will have, concurrently with the
effectiveness hereof) an enforceable right (whether pursuant to
Section 2.05 hereunder or by separate sublicense and except as
otherwise contemplated by Section 2.05(c)) to use all such computer
software to the extent necessary for administering the Receivables.
(m) On the date of Purchase thereof, each Receivable is,
unless otherwise identified in the Daily Report, an Eligible
Receivable.
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(n) Such Seller, on its Initial Purchase Date, (i) is not
"insolvent" (as such term is defined in Section 101(31)(A) of the
Bankruptcy Code); (ii) is able to pay its debts as they mature and
(iii) does not have unreasonably small capital for the business in
which it is engaged or for any business or transaction in which it
is about to engage.
(o) Such Seller is entering into the transactions
contemplated by this Agreement in reliance on WGRC's identity as a
separate legal entity from each Seller and each of its Affiliates
other than WGRC, and acknowledges that WGRC and the other parties
to the Facility Documents are similarly entering into the
transactions contemplated by the other Facility Documents in
reliance on WGRC's identity as a separate legal entity from each
Seller and each such other Affiliate.
(p) Such Seller is not (i) an "investment company" registered
or required to be registered under the Investment Company Act of
1940, as amended, or (ii) a "holding company", or a "subsidiary
company" or an "affiliate" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as
amended.
(q) Wyman has delivered to WGRC complete and correct copies
of the audited consolidated balance sheet of Wyman as of December
31, 1993 and the unaudited consolidated balance sheet of Wyman as
of March 31, 1994 and related consolidated statements of income and
cash flows for the twelve-month and three-month periods then ended,
respectively. Such balance sheets and statements of income and
cash flows have been prepared in accordance with GAAP consistently
applied (subject to changes in application which were approved by
Wyman's independent public accountants and were disclosed therein
and subject to normal year-end adjustments in the case of the
unaudited statements), and present fairly in all material respects
Wyman's financial position as of the dates indicated above and the
results of its operations for the periods then ended.
(r) None of the inventory the sale of which has given or may
hereafter give rise to a Receivable, is subject to any Lien (other
than Permitted Liens).
(s) All of the Receivables are evidenced by an Invoice
substantially in one of the forms collectively attached hereto as
Exhibit B hereto, or such other written contract and/or form of
invoice approved by WGRC (or, to the extent required under the
Revolving Credit Agreement, by its assigns) in writing.
(t) As of its Initial Purchase Date, such Seller is not in
default under any indenture or any loan, credit or other agreement
with respect to Indebtedness, the effect of which is to cause, or
to permit (or would, with the giving of notice or the lapse of time
or both, permit) the holder or holders of such Indebtedness to
cause, such Indebtedness to become due prior to its stated
maturity.
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(u) Such Seller currently maintains, and shall continue to
maintain, such liability and casualty insurance as may be required
by applicable law, as is necessary for the continued operation of
its businesses and as is customarily maintained by companies
engaged in similar businesses.
(v) No accumulated funding deficiency (as defined in Section
302(a)(2) of ERISA or Section 412(a) of the IRC) exists with
respect to any Benefit Plan, and such Seller has not failed to
satisfy the minimum funding requirements under ERISA or the IRC
with respect to any Benefit Plan which deficiency or failure would
cause any Lien (other than a Permitted Lien) to attach to the
Purchased Assets under Title IV of ERISA. As of its Initial
Purchase Date, such Seller has no intent to terminate or to permit
any ERISA Affiliate to terminate any Benefit Plan which would cause
any Lien (other than a Permitted Lien) to attach to the Purchased
Assets under Title IV of ERISA.
(w) Wyman and, where applicable, each Seller, has filed or
caused to be filed all federal, state and local tax returns which
are required to be filed by it, and has paid or caused to be paid
all taxes shown to be due and payable on such returns or in any
assessments received by it, other than taxes or assessments, the
validity of which are being contested in good faith by appropriate
proceedings and with respect to which Wyman or each Seller, as
applicable, has set aside adequate reserves on its books in
accordance with GAAP and which proceedings would not have a
Material Adverse Effect.
(x) The transactions contemplated by this Agreement and by
each of the Facility Documents are being consummated by each Seller
in furtherance of such Seller's ordinary business, with no
contemplation of insolvency and with no intent to hinder, delay or
defraud any of its present or future creditors. As of the
Effective Date, and as of each Purchase Date, the Sellers shall
have received reasonably equivalent value for the Receivables sold
or otherwise conveyed to WGRC under this Agreement.
(y) (i) As of the Effective Date, Wyman owns 100% of the
issued and outstanding stock of the other Initial Sellers, (ii) as
of Cameron's Initial Purchase Date, Wyman shall own 100% of the
issued and outstanding stock of Cameron and (iii) as of the date of
each Purchase, Wyman shall own (directly or indirectly) at least
80% of the issued and outstanding stock of each other Seller.
SECTION 3.02. Representations and Warranties of WGRC. WGRC
represents and warrants that as of the Effective Date and (except
for representations and warranties which relate to a specific date
only) as of the date of each Purchase:
(a) WGRC is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and is
duly qualified to do business, and is in good standing, in every
applicable jurisdiction except where the failure to be so qualified
and to be in good standing could not reasonably be expected to have
a Material Adverse Effect.
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(b) The execution, delivery and performance by WGRC of this
Agreement, the other Facility Documents to which it is a party and
all other agreements, instruments and documents delivered by WGRC
hereunder and thereunder, and the transactions contemplated hereby
and thereby, are within WGRC's corporate powers, and have been duly
authorized by all necessary corporate action, and do not and will
not (i) result in or require the creation of any Lien upon or with
respect to any of its properties except as created in favor of the
Collateral Agent for the benefit of the Agents and the Banks or
(ii) violate, conflict with or result in a breach or default under
any of the following: WGRC's charter or by-laws; any law, rule or
regulation applicable to WGRC or its property; any contractual
restriction contained in any indenture, loan or credit agreement,
lease, mortgage, security agreement, bond, note, or other agreement
or instrument binding on WGRC or to which its property is subject;
or any order, writ, judgment, award, injunction or decree binding
on WGRC or to which its property is subject. This Agreement has
been duly executed and delivered on behalf of WGRC.
(c) No authorization or approval or other action by, and no
notice to or filing with, any government authority or regulatory
body or other Person is required for the due execution, delivery
and performance by WGRC of this Agreement, any other Facility
Document executed between the Sellers and WGRC or any other
agreement, document or instrument delivered hereunder or thereunder
except for the filing of UCC Financing Statements to evidence
WGRC's ownership interests in the Receivables purchased hereunder
and all proceeds thereof and to evidence the Collateral Agent's
security interest in the Purchased Assets under the Revolving
Credit Agreement.
(d) This Agreement and each of the other Facility Documents
to which WGRC is a party constitutes the legal, valid and binding
obligation of WGRC enforceable against WGRC in accordance with its
terms.
SECTION 3.03. Representations and Warranties of the Servicer.
The Servicer represents and warrants that as of the Effective Date
and continuing through the Collection Date:
(a) The Servicer is a corporation duly incorporated, validly
existing and in good standing under the laws of its state of
incorporation and has all governmental licenses, authorizations,
consents and approvals required to carry on its business, and is in
good standing in each jurisdiction in which its business is no
conducted, except where the absence of such licenses,
authorizations, consents, approvals or good standing would not have
a Material Adverse Effect.
(b) The execution, delivery and performance by the Servicer
of this Agreement, the other Facility Documents to which it is a
party and all other agreements, instruments and documents delivered
by the Servicer hereunder and thereunder, and the transactions
contemplated hereby and thereby, are within the Servicer's
corporate powers, have been duly authorized by all necessary
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corporate action, and do not and will not (i) result in or require
the creation of any Lien upon or with respect to any of its
properties except as created in favor of WGRC hereunder or in favor
of the Collateral Agent for the benefit of the Agents and the
Banks; (ii) violate, conflict with or result in a breach or default
under the Servicer's charter or by-laws; (iii) violate, conflict
with or result in a breach or default under any law, rule or
regulation applicable to the Servicer or its property; (iv)
violate, conflict with or result in a breach or default under any
contractual restriction contained in any indenture, loan or credit
agreement, lease, mortgage, security agreement, bond, note, or
other agreement or instrument binding on the Servicer or to which
its property is subject, which violation, breach or default would
have a Material Adverse Effect; or (v) violate, conflict with or
result in a breach of any order, writ, judgment, award, injunction
or decree binding on the Servicer or to which its property is
subject. This Agreement has been duly executed and delivered on
behalf of the Servicer.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body or other Person is required for the due execution, delivery
and performance by the Servicer of this Agreement, any other
Facility Document executed by the Servicer or any other agreement,
document or instrument delivered by the Servicer hereunder or
thereunder except for the filing of UCC Financing Statements to
evidence WGRC's ownership interests in the Receivables purchased
from the Sellers and all proceeds thereof and to evidence the
Collateral Agent's security interest in the Purchased Assets under
the Revolving Credit Agreement.
(d) This Agreement and each of the other Facility Documents
to which the Servicer is a party constitutes the legal, valid and
binding obligation of the Servicer enforceable against the Servicer
in accordance with its terms.
ARTICLE IV
GENERAL COVENANTS OF THE SELLERS
SECTION 4.01. Affirmative Covenants of the Sellers. From the
date hereof until the Collection Date, each Seller will, unless
WGRC (or, to the extent required under the Revolving Credit
Agreement, its assigns) shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all respects with
all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards with respect to it, its business and
properties and all of the Purchased Assets, including, without
limitation, all Receivables and related Invoices included therein,
except where the failure to so comply would not have a Material
Adverse Effect.
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(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, good standing, rights, franchises
and privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction in which its business is
conducted, except where the failure to preserve and maintain such
existence, good standing, rights, franchises, privileges and
qualification would not have a Material Adverse Effect; provided,
that nothing in this Section 4.01(b) shall be deemed to prohibit
any Seller or any Subsidiary of a Seller from merging with or
consolidating with or into, or from disposing of assets (other than
Purchased Assets) to and from, any other Seller or Subsidiary or a
Seller (other than WGRC); provided, however, that any survivor of
any such merger or consolidation (if not a Seller) must satisfy
each of the conditions precedent set forth in Section 2.06
hereunder.
(c) Performance and Compliance with Receivables. At its
expense, timely and fully perform and comply with all provisions,
covenants and other promises required to be observed by it with
respect to the Receivables included in the Purchased Assets, except
where the failure to so perform and comply would not have a
Material Adverse Effect.
(d) Location of Records. Keep its principal place of
business and chief executive office at the address of such Seller
referred to in Section 7.02 hereof, and the offices where it keeps
the Records, at the addresses referred to on Schedule 3.01(h) or,
upon 30 days' prior written notice to WGRC and the Facility Agent,
at such other locations within the United States where all action
required by Section 5.05 shall have been taken and completed;
provided, that, in the case of any change in a Seller's principal
place of business and chief executive office to a location other
than North Grafton, Massachusetts such Seller shall also provide,
prior to such change, an opinion of counsel reasonably acceptable
to the Facility Agent as to continued perfection of the ownership
interests in the Receivables hereunder following such change.
(e) Credit and Collection Policy. Comply in all material
respects with the Credit and Collection Policy attached hereto as
Exhibit C (as such Credit and Collection Policy may be amended in
accordance with Section 4.03(c)) applicable to the Receivables and
the related Invoices included in the Purchased Assets.
(f) Collections. Instruct all Obligors to cause all
Collections to be deposited directly to a Lock-Box Account. If
such Seller or any of its agents or representatives shall receive
any Collections, such recipient will comply with the terms and
provisions of Section 5.01(a) hereof.
(g) Audits; Information. Each Seller will furnish WGRC and
its permitted assigns from time to time such information with
respect to the Receivables as WGRC shall reasonably request from
such Seller. At any time and from time to time during any Seller's
normal business hours, with reasonable notice, such Seller shall
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permit WGRC, its permitted assigns or their respective agents or
representatives, (i) to examine and make copies of and abstracts
from all books, records and documents (including, without
limitation, computer tapes and discs) in the possession or under
the control of such Seller relating to the Receivables or the other
Purchased Assets, (ii) to visit the offices and properties of such
Seller for the purpose of examining such materials described in
clause (i) above, (iii) to discuss matters relating to the
Receivables or the other Purchased Assets, or such Seller's
performance hereunder with any of the officers or employees of such
Seller having knowledge of such matters and (iv) to verify the
validity, amount or any other matter relating to any Receivable.
The Sellers further agree that WGRC or its assigns shall be
entitled to have certified public accountants or other auditors
conduct a review of their books and records relating to the
Purchased Assets in connection with any outside review of such
Purchased Assets as contemplated under Section 7.02 of the
Revolving Credit Agreement. Each Seller agrees that the Facility
Agent shall be permitted to substitute for and/or accompany WGRC on
any such inspection or visit and to participate in any such
discussion. Each Seller further agrees to instruct its independent
accountants to cooperate with any reasonable request of WGRC, the
Facility Agent or their respective agents or representatives, in
connection with the performance of such accountants' routine
verification procedures with respect to the Receivables or the
Related Security. Without limiting the foregoing, each Seller
shall, in connection with any review of WGRC's books and records by
certified public accountants or other auditors pursuant to Section
7.02 of the Revolving Credit Agreement, permit such accountants or
auditors to examine its books and records relating to the Purchased
Assets and the Facility Documents.
(h) Delivery of Records. Upon the request of WGRC, its
agents, representatives or permitted assignees, deliver or cause to
be delivered, copies of all Records, including, without limitation,
computer tapes generated by or on behalf of such Seller or any of
its Consolidated Affiliates, relating to the Purchased Assets
(including all Receivables and Collections included therein).
(i) Segregation of Collections. Use all reasonable efforts,
whether in its capacity as Seller or as Servicer (if applicable),
to minimize the deposit of any funds other than Collections into
any of the Lock-Box Accounts and, to the extent that any such funds
are nevertheless deposited into any of such Lock-Box Accounts,
promptly identify any such funds to WGRC.
(j) Books and Records. Maintain at all times complete books,
records and accounts relating to the Purchased Assets sold by such
Seller hereunder (including all Receivables and Collections
included therein) in which timely entries are made in accordance
with GAAP. Such books and records shall be marked to indicate the
sales of all Receivables and Related Security by such Seller
hereunder and shall include, without limitation, (a) all payments
received and all credits and extensions granted with respect to
such Receivables; (b) the return, rejection, repossessions, or
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stoppage in transit of any merchandise the sale of which has given
rise to a Receivable included in the Purchased Assets; and (c) any
other Dilution Factors.
(k) Identification of Eligible Receivables. (i) Establish
and maintain procedures as are necessary for determining whether
each Receivable qualifies as an Eligible Receivable and for identi-
fying, on any date, the aggregate Outstanding Balances of all
Eligible Receivables; and (ii) notify WGRC in advance of Purchase
if a Receivable proposed to be sold by such Seller hereunder will,
to such Seller's knowledge, not be an Eligible Receivable as of the
date of Purchase.
(l) Notification of Noncomplying Receivables. Promptly
notify WGRC, the Servicer and the Agents of such Seller's
determination that any Receivables previously sold hereunder were,
as of the date of Purchase thereof, Noncomplying Receivables (it
being understood that monthly disclosure of such Noncomplying
Receivables in connection with delivery of the Settlement Statement
shall be sufficient).
(m) Separate Identity. Take all actions required to maintain
WGRC's status as a separate legal entity, including, without
limitation, (i) not holding WGRC out to third parties as other than
an entity with assets and liabilities distinct from each Seller and
Wyman's other Subsidiaries; (ii) not holding itself out to be
responsible for the debts of WGRC or, other than by reason of
owning capital stock of WGRC (if applicable), for any decisions or
actions relating to the business and affairs of WGRC; (iii) taking
such other actions as are necessary on its part to ensure that all
corporate procedures required by its and WGRC's respective
certificates of incorporation and by-laws are duly and validly
taken; (iv) keeping correct and complete records and books of
account and corporate minutes; (v) not acting in any other matter
that could foreseeably mislead others with respect to WGRC's
separate identity; and (vi) taking such other actions as may be
necessary on its part to ensure that WGRC is in compliance at all
times with Section 6.01(l) and Section 7.09 of the Revolving Credit
Agreement.
(n) Taxes. File or cause to be filed, and cause each of its
Subsidiaries with whom it shares consolidated tax liability to
file, all Federal, state and local tax returns which are required
to be filed by it, except where the failure to file such returns
would not have a Material Adverse Effect, and pay or cause to be
paid all taxes shown to be due and payable on such returns or on
any assessments received by it, other than any taxes or
assessments, the validity of which are being contested in good
faith by appropriate proceedings and with respect to which such
Seller or such Subsidiary shall have set aside adequate reserves on
its books in accordance with GAAP.
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(o) Ownership of Sellers. Take all actions required on its
part to ensure that, at all times through the Termination Date,
Wyman continues to own (directly or indirectly) at least 80% of the
issued and outstanding stock of each other Seller; provided, that
Wyman shall notify the Agents and the Rating Agency of any change
in ownership of the capital stock of the other Sellers.
SECTION 4.02. General Reporting Requirements of the Sellers.
From the date hereof until the Collection Date, each Seller (or,
with respect to subsections (b), (c) and (d) below, Wyman only)
shall, unless WGRC (or, to the extent required under the Revolving
Credit Agreement, its assigns) shall otherwise consent in writing,
furnish to WGRC (and, to the extent directed by WGRC below, to
WGRC's assigns or designees):
(a) As soon as practicable and in no event later than two
Business Days after a senior financial officer of the Seller has
actual knowledge of the occurrence of each Liquidation Event or
Unmatured Liquidation Event which results from or relates to an act
or omission of such Seller, a statement from such officer setting
forth such Liquidation Event or Unmatured Liquidation Event and the
action which such Seller proposes to take with respect thereto
(copies of which shall be concurrently furnished to the Facility
Agent and the Rating Agency);
(b) As soon as available and in any event within one-hundred
five (105) days after the end of each fiscal year of Wyman, a copy
of the annual audited consolidated statements of income and cash
flows for Wyman and its consolidated Subsidiaries for such fiscal
year and the related consolidated balance sheet as at the end of
such fiscal year, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year and
prepared in accordance with GAAP consistently applied (except for
such changes in application which are in accordance with GAAP and
are approved by Wyman's independent public accountants and
disclosed therein), reported on in reasonable detail and
accompanied by an unqualified opinion (except for qualifications
relating to contingencies which are otherwise adequately disclosed
but are not quantifiable for reasons outside the Sellers' control)
from Ernst & Young or other independent certified public
accountants of recognized national standing selected by Wyman and
reasonably acceptable to WGRC (copies of which shall be
concurrently furnished to the Banks, the Agents and the Rating
Agency), it being expressly understood that this clause (b) may be
satisfied by delivery to the above-named parties of Wyman's annual
report on Form 10-K to the Securities and Exchange Commission for
the appropriate fiscal year;
(c) As soon as available and in any event within sixty (60)
days after the end of each of the first three fiscal quarters of
each fiscal year of Wyman, a copy of the unaudited consolidated
statements of income and cash flows for Wyman and its consolidated
Subsidiaries for such fiscal quarter and for the period from the
beginning of the respective fiscal year to the end of such fiscal
quarter and the related unaudited consolidated balance sheet as at
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the end of such fiscal quarter; setting forth in each case in
comparative form the corresponding figures for the preceding fiscal
year and all of the foregoing to be prepared in accordance with
GAAP consistently applied (except for such changes in application
which are in accordance with GAAP and are approved by Wyman's
financial officer preparing such statements and disclosed therein)
(copies of which shall be concurrently furnished to the Banks and
the Agents), it being expressly understood that this subsection (c)
may be satisfied by delivery to the above-named parties of Wyman's
quarterly report on Form 10-Q to the Securities and Exchange
Commission for the appropriate fiscal quarter;
(d) Contemporaneously with the furnishing of a copy of the
annual and quarterly financial statements provided for in
subsections 4.02(b) and (c), respectively, a certificate dated the
date of delivery and signed by a Responsible Officer of Wyman,
which certificate shall state (i) that said financial statements
fairly present the financial position and results of operations of
Wyman and its consolidated Subsidiaries in accordance with GAAP
consistently applied (except for such changes in application which
are in accordance with GAAP and are approved by Wyman's independent
public accountants or, in the case of the quarterly reports, by
such Responsible Officer and disclosed therein and further subject
to normal year-end adjustments) and (ii) that the officer signing
such certificate has reviewed the relevant terms of this Agreement
and has made, or caused to be made under such officer's
supervision, a review of each Seller's and WGRC's activities during
the period covered by the statements then being furnished, and that
the review has not disclosed the existence of a Liquidation Event
or Unmatured Liquidation Event, or if there is such an event,
describing it and the steps, if any, taken or being taken to cure
it (with copies of each such certificate to be concurrently
furnished to the Banks, the Agents and the Rating Agency);
(e) Promptly after the filing or receipt thereof, copies of
all reports and notices with respect to any Reportable Event
defined in Article IV of ERISA (other than any such Reportable
Event for which the Pension Benefit Guaranty Corporation has waived
the 30-day notice requirement) which such Seller or any ERISA
Affiliate files under ERISA with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor or which such Seller or any ERISA Affiliate receives from the
Pension Benefit Guaranty Corporation (copies of which shall be
concurrently furnished to the Facility Agent and the Rating
Agency);
(f) Promptly, from time to time, such other information,
documents, records or reports respecting the Purchased Assets,
including, without limitation, the Receivables, or the conditions
or operations, financial or otherwise, of such Seller as WGRC, the
Facility Agent, or any of their respective agents, representatives
or permitted assignees, may from time to time reasonably request,
in order to protect the interests of WGRC and its assigns under or
as contemplated by this Agreement and the other Facility Documents
and to enable WGRC and the Agents to perform their respective
reporting requirements under the other Facility Documents.
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The Sellers will cause any financial statements consolidated
with those of WGRC to contain a footnote to the effect that WGRC's
business consists of the purchase of Receivables from the Sellers
and that WGRC is a separate corporate entity with its own separate
creditors.
SECTION 4.03. Negative Covenants of the Sellers. From the
date hereof until the Collection Date, each Seller will not,
without the written consent of WGRC (or, to the extent required
under the Revolving Credit Agreement, the written consent of its
assigns):
(a) Sales, Liens, Etc. Against Receivables. Except as
otherwise provided herein, (1) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist
any Liens (except as created in favor of WGRC hereby or as created
by WGRC pursuant to any Facility Document and except for Permitted
Liens) upon or with respect to any of the Receivables sold or other
Purchased Assets sold or to be sold by such Seller hereunder or
with respect to any Lock-Box Account; or (2) assign any right to
receive income in respect of such Receivables, Purchased Assets or
Lock-Box Account (except that any Seller may assign its rights
under the Intercompany Notes to any other Seller). In the event
that such Seller fails to keep any Purchased Assets free and clear
of any Lien (except as created in favor of WGRC hereunder or as
created by WGRC pursuant to any other Facility Document and except
for Permitted Liens), WGRC may (without limiting its other rights
with respect to such Seller's breach of its obligations hereunder)
make reasonable expenditures necessary to release such Lien. WGRC
shall be entitled to indemnification for any such expenditures
pursuant to the indemnification provisions of Section 6.01, or WGRC
may, alternatively, deduct such expenditures as an offset to the
Purchase Price owed to such Seller hereunder or as a reduction to
the Short-Term Note or, if applicable, the Long-Term Note;
provided, however, that in the event of any dispute between such
Seller and the alleged holder of such Lien as to the amount or
validity of such Lien, such expenditure shall be made only after
consultation with such Seller as to the status of such Lien and the
action such Seller or any of its Consolidated Affiliates is taking
or plans to take with respect thereto.
(b) Extension or Amendment of Receivables. Except, as
applicable, for any adjustments made in its capacity as Servicer or
subservicer pursuant to Section 5.03(a), extend, amend or otherwise
modify the terms of any of its Receivables included in the
Purchased Assets without the prior consent of WGRC.
(c) Change in Credit and Collection Policy and Invoice Form.
(i) Make any change in the Credit and Collection Policy which could
reasonably be expected to impair the collectibility of the
Receivables or to result in a material delay in the collection
thereof or would be inconsistent with collection practices of the
industry or would otherwise adversely affect the interests of WGRC
and/or the Banks' interests under the Revolving Credit Agreement in
any material respect (it being understood by WGRC that, (without
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waiving its right to object to any such change) the Sellers intend
to consolidate their separate policies into a single policy for
reasons of organizational efficiency but without deviating from the
substantive policies reflected in Exhibit C as attached hereto),
(ii) make any material changes in the forms of Invoices or (iii)
except as otherwise permitted under Section 5.03, amend or modify
the terms of any Invoice evidencing a Receivable sold hereunder
(provided, that, with respect to any such change under any of the
foregoing clauses (i) through (iii), concurrent notice thereof
shall be given to WGRC, the Facility Agent and the Rating Agency).
(d) Change in Payment Instructions to Obligors. (i) Make any
change in its instructions to Obligors directing payments other
than to a Lock-Box Account or, via wire transfer, the Collection
Account, or (ii) voluntarily add or terminate any bank as a Lock-
Box Bank unless, with respect to the addition of a Lock-Box Bank,
WGRC and the Facility Agent shall have first received and approved
(which approval shall not be unreasonably withheld) (x) copies of
Lock-Box Agreements executed by each new Lock-Box Bank and all
applicable Sellers and (y) copies of all agreements and documents
signed by all applicable Sellers or the respective Lock-Box Bank
with respect to any new Lock-Box Account.
(e) Change in Corporate Name. Make any change to its
corporate name or conduct any business under any trade names,
fictitious names or assumed names other than those identified on
Schedule 3.01(j) unless (i) WGRC, the Facility Agent and the Rating
Agency shall have received twenty (20) Business Days prior written
notice of such name change or use and (ii) at least ten (10)
Business Days prior to the effective date of any such name change
or use, such Seller shall have executed and delivered to WGRC such
Financing Statements (Form UCC-1 and UCC-3) which WGRC may request
to reflect such name change or use, together with such other
documents and instruments (including, in the case of any change to
a Seller's corporate name, an opinion of counsel reasonably
acceptable to the Facility Agent as to continued perfection of the
ownership interests in the Receivables created hereunder following
such change) that WGRC may request in connection therewith.
(f) Accounting of Purchases. Prepare any financial
statements which shall account for the transactions contemplated
hereby in any manner other than the sale of the Purchased Assets by
the Sellers to WGRC, or in any other respect account for or treat
the transactions contemplated hereby (including but not limited to
accounting and, where taxes are not consolidated, for tax reporting
purposes) in any manner other than as a sale of the Purchased
Assets by the Sellers to WGRC.
(g) ERISA Matters. (i) Engage or permit any ERISA Affiliate
to engage in any prohibited transaction for which an exemption is
not available or has not previously been obtained from the United
States Department of Labor; (ii) permit to exist any accumulated
funding deficiency, as defined in Section 302(a) of ERISA and
Section 412(a) of the IRC, with respect to any Benefit Plan other
than a Multiemployer Plan; (iii) fail to make any payments to any
Multiemployer Plan that Wyman, any other Seller or any ERISA
Affiliate may be required to make under the agreement relating to
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such Multiemployer Plan or any law pertaining thereto; (iv) termi-
nate or permit any ERISA Affiliate to terminate any Benefit Plan
which could result in any liability of Wyman, any other Seller or
any ERISA Affiliate under Title IV of ERISA; or (v) permit to exist
any occurrence of any reportable event described in Title IV of
ERISA which represents a material risk of a liability of Wyman, any
other Seller or any ERISA Affiliate under ERISA or the IRC, if such
prohibited transactions, accumulated funding deficiencies,
payments, terminations and reportable events occurring within any
fiscal year of Wyman, in the aggregate, would be reasonably likely
to cause any Lien (other than Permitted Liens) to attach to the
Purchased Assets under Title IV of ERISA.
ARTICLE V
ADMINISTRATION AND COLLECTION
SECTION 5.01. Collection of Receivables. (a) As of its
Initial Purchase Date, each Seller shall have transferred to WGRC
the exclusive ownership and control of the Lock-Box Accounts used
by it and all related lock-boxes, and each Seller hereby agrees to
take any further action necessary or that WGRC may reasonably
request to effect or maintain the effectiveness of any such
transfer. From and after the Initial Purchase Date applicable to
any Seller, such Seller shall not have any further right, title
and/or interest in or control over any of the Lock-Box Accounts or
related lock-boxes. Unless instructed otherwise by the Facility
Agent or the Collateral Agent pursuant to their authority under the
Revolving Credit Agreement (in which case, concurrent notice
thereof shall be given to the Rating Agency), each Lock-Box Bank
shall be instructed to remit, on a daily basis, via overnight or
same day transfer, all amounts deposited in its Lock-Box Accounts
to the Collection Account in accordance with the terms of a Lock-
Box Agreement substantially in the form of Exhibit 9.03 to the
Revolving Credit Agreement, with such changes as the Facility Agent
may approve. The Servicer shall advise WGRC daily of the amount of
Collections received or to be received into the Collection Account
on such day with respect to the Receivables and WGRC shall
determine the amounts of such Collections which, pursuant to the
terms of the Revolving Credit Agreement, may be used by WGRC to
purchase new Receivables hereunder. If any Seller or its agents or
representatives shall at any time receive any cash, checks or other
instruments which constitute Collections, such recipient shall
promptly segregate such payment and hold such payment in trust for
and in a manner acceptable to WGRC and shall, promptly upon
identification of any such payment (and in any event within two
Business Days following such identification), remit all such cash,
checks and instruments, duly endorsed or with duly executed
instruments of transfer, to a Lock-Box Account or to the Collection
Account. WGRC may notify any or all of the Obligors of the
ownership of Purchased Assets by WGRC and may direct any or all of
the Obligors of Receivables included in the Purchased Assets to pay
all amounts payable under any such Receivables directly to the
Collection Account (i) at any time, with contemporaneous notice to
Wyman and the applicable Seller, after the occurrence and during
the continuance of a Liquidation Event or (ii) otherwise, at any
time following five Business Days' advance notice to Wyman and the
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applicable Seller. At WGRC's request and at each Seller's expense,
such Seller shall give notice of WGRC's ownership of Purchased
Assets purchased from such Seller to each Obligor thereunder and
direct that payments be made directly to the Collection Account and
assemble all Records of such Seller, and make the same available to
WGRC at a place selected by WGRC or its designee. Each Seller
hereby authorizes WGRC, and gives WGRC its irrevocable power of
attorney, which authorization shall be coupled with an interest, to
take any and all steps in such Seller's name and on behalf of such
Seller, which steps are necessary or desirable, in the reasonable
determination of WGRC, to collect all amounts due under the
Purchased Assets, including, without limitation, endorsing such
Seller's name on checks and other instruments representing
Collections and enforcing such Receivables and the related Invoices
(it being understood that WGRC or the Servicer on behalf of WGRC,
and not the Sellers, shall be responsible for such expenses of
enforcement except as otherwise provided in Article VI hereof).
(b) WGRC shall, following notification that collections of
any receivable or other intangible owed to any Seller or any
Affiliate thereof, which is not a Purchased Asset, have been
deposited into the Lock-Box Accounts, request that the Collateral
Agent segregate all such collections. Promptly, after such
misapplied collections have been reasonably identified to WGRC and
the Collateral Agent, WGRC shall (or shall cause the Collateral
Agent to) turn over to such Seller or such Affiliate, as
applicable, all such collections less all reasonable and
appropriate out-of-pocket costs and expenses, if any, incurred by
WGRC and the Collateral Agent in collecting such receivables.
Except as expressly stated above in this Section 5.01(b), and
notwithstanding anything to the contrary in this Agreement, WGRC
shall have no obligation to collect, enforce or take any other
action with respect to any receivable or other intangible not
included in the Purchased Assets.
SECTION 5.02. Designation of Servicer. (a) The servicing,
administering and enforcement of collection of the Receivables
shall be conducted by the Person (the "Servicer") so designated
from time to time in accordance with this Section 5.02; provided,
that the Servicer shall be entitled at any time and from time to
time to designate one or more third parties to act as subservicers
on its behalf in connection with its duties as Servicer hereunder;
provided further, however, that no such designation shall relieve
the Servicer of its obligations and liabilities as Servicer. Until
WGRC or, in the event of a Servicer Termination Event, the
Collateral Agent gives notice to Wyman of the designation of a new
Servicer, Wyman is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Servicer pursuant to the
terms hereof, together with such other duties and obligations of
the Servicer set forth in the Revolving Credit Agreement. It is
expressly understood that Wyman may designate each other Seller as
the subservicer with respect to the Receivables of such Seller. It
is expressly understood that neither Wyman nor any subservicer
shall have any rights to withdraw amounts in any Lock-Box Account.
WGRC may at any time, with or without cause, designate any Person
(including itself) to replace Wyman as Servicer. Any Servicer may
at any time resign as Servicer upon written notice to WGRC.
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(b) WGRC and the Collateral Agent shall give concurrent
notice to the Rating Agency of any resignation, replacement or
removal of the Servicer. Notwithstanding anything else in this
Agreement to the contrary, but subject to Section 5.02(c), no
resignation, replacement or removal of the Servicer shall be
effective until a successor Servicer has been appointed, has
accepted such appointment and is ready to perform the duties and
obligations of the Servicer hereunder.
(c) In the event that the Servicer resigns or is removed
under the terms of this Agreement, and a successor Servicer
approved by the Facility Agent is not promptly named by WGRC
hereunder, the Sellers hereby acknowledge that WGRC has agreed with
the Banks to appoint the Collateral Agent as Servicer.
SECTION 5.03. Duties of the Servicer; Daily Reports and
Settlement Statements; Servicer Fee. (a) The Servicer shall take
or cause to be taken all such actions as may be necessary or
advisable to collect each Receivable included in the Purchased
Assets from time to time, all in accordance with the Credit and
Collection Policy; provided, however, that the Servicer shall not
extend, modify or amend any Receivable without WGRC's prior consent
(or, to the extent required under the Revolving Credit Agreement,
the prior consent of its assigns), except that the Servicer may
make adjustments to reflect Dilution, Write-Offs, and the taking of
Receivable Notes in accordance with the terms of the Credit and
Collection Policy. The Servicer shall, in its capacity as
Servicer, exercise the same care and apply the same policies with
respect to the collection of the Receivables that it would exercise
and apply if it owned such Receivables, shall act in the best
interests of WGRC and shall exercise loyalty to WGRC, all with
reasonable care and diligence and otherwise in accordance with all
applicable laws, rules and regulations and in accordance with the
Credit and Collection Policy. The Servicer shall maintain all
Records belonging to WGRC separate and apart from its other records
and the records of other Affiliates. In addition, the Servicer
shall, unless WGRC otherwise revokes such authority in writing (a
copy of which revocation shall be delivered to the Facility Agent),
enforce WGRC's rights and interests, if any, in and under the
Receivables, the Related Security and the Invoices included in the
Purchased Assets. Notwithstanding anything to the contrary
contained herein, (x) WGRC shall have the absolute and unlimited
right to direct the Servicer (whether the Servicer is Wyman or
otherwise) to (and in the absence of such direction, the Servicer
shall not) commence, prosecute or settle any legal action to
enforce collection of any Receivable owned by WGRC or to foreclose
upon or repossess any Related Security owned by WGRC; and (y) the
Servicer shall not, under any circumstances, be entitled to make
WGRC a party to any litigation without WGRC's express prior written
consent. The Servicer shall adjust the Outstanding Balance of any
Receivable to reflect Dilution and Write-Offs in accordance with
the Credit and Collection Policy. The Servicer's authorization
under this Agreement shall terminate on the Collection Date.
Notwithstanding any other provision of this Agreement, Wyman's
obligation to act as Servicer shall terminate on the Collection
Date.
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(b) In addition to its other responsibilities hereunder, the
Servicer shall prepare and deliver to WGRC and the Agents the Daily
Reports and Settlement Statements as more fully described below.
On each Business Day, the Servicer shall deliver to WGRC, by no
later than 1:00 p.m. (Boston time) a Daily Report with respect to
such date in the form of Exhibit D-1 (if such Business Day occurs
prior to the commencement of the Liquidation Period) or Exhibit D-2
(if such Business Day occurs during the Liquidation Period) hereto.
With respect to each Collection Period, the Servicer shall prepare
and deliver to WGRC (with copies to the Agents, the Banks and the
Rating Agency), by the Reporting Date of the subsequent month, a
Settlement Statement, in the form of Exhibit E-1 (if the
Liquidation Period has not yet commenced) or Exhibit E-2 hereto (if
the Liquidation Period has commenced), as applicable. Each Seller
agrees to provide to the Servicer on a timely basis all information
necessary for the preparation and delivery of the foregoing
reports.
(c) In consideration for Wyman's services as the Servicer,
WGRC shall pay to the Servicer a fee (the "Servicer Fee") as set
forth in this paragraph below. The Servicer hereby acknowledges
that, except for the Servicer Fee owed under this paragraph, the
Servicer's costs of performing its duties as Servicer hereunder
(including the accounting costs and expenses for reviews of the
Purchased Assets required under the Revolving Credit Agreement and
including the costs or expenses incurred by the other Sellers as
subservicers hereunder) shall not be chargeable against WGRC or its
assigns; the Servicer further acknowledges that the costs and
expenses of one outside audit per year as contemplated under
Section 7.02 of the Revolving Credit Agreement shall be paid out of
the Servicer Fee it otherwise receives. For so long as Wyman or
any Consolidated Affiliate of Wyman acts as Servicer hereunder, the
Servicer Fee shall be paid monthly on each Settlement Date prior to
the Termination Date for the immediately preceding Collection
Period in an amount equal to the product of (i) the average daily
Outstanding Balances of all Receivables during the prior Collection
Period times (ii) one percent (1.0%) per annum calculated on the
basis of actual days elapsed during such Collection Period and a
year of 365 or 366 days, as applicable. After the Termination
Date, the Servicer Fee will be paid as provided in Section 9.08 of
the Revolving Credit Agreement. If neither Wyman nor any
Consolidated Affiliate of Wyman acts as Servicer hereunder, then
the Servicer Fee shall equal such fee as may be agreed to by the
Facility Agent, on behalf of WGRC, and such successor Servicer;
provided that the Servicer Fee for any Collection Period may in no
event exceed the lesser of (1) 200% of the Servicer Fee which would
be applicable to Wyman or any of its Consolidated Affiliates and
(2) 110% of the sum of the aggregate reasonable costs and expenses
of such Servicer incurred in the performance of its duties
hereunder during such Collection Period. If Wyman is replaced as
the Servicer prior to the end of a Collection Period, it shall be
entitled to a pro rata portion of the Servicer Fee for such period.
(d) The Servicer shall implement and maintain administrative
and operating procedures reasonably necessary for the performance
of its obligations hereunder (including, without limitation, an
ability to recreate Records in the event of the destruction of any
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originals thereof). The Servicer shall also maintain at all times
complete books, records and accounts relating to the Receivables,
Collections and other Purchased Assets in which timely entries are
made in accordance with GAAP, as are necessary for the performance
of its obligations hereunder. Such books, records and accounts
shall, without limitation, be adequate to permit the daily
calculation of all information required to be included in the Daily
Report. Copies of such entries shall promptly be delivered to WGRC
or its agents, representatives or permitted assignees upon request.
Such books and records shall be marked (by means of a general
legend that will automatically appear at or near the beginning of
any computer generated list or print-out of the Receivables or
otherwise) to indicate the ownership by WGRC of all Receivables and
Related Security sold hereunder, and such books and records shall
reflect, without limitation, (i) all payments received and all
credits and extensions granted with respect to the Receivables;
(ii) the return, rejection, repossessions, or stoppage in transit
of any merchandise the sale of which has given rise to a
Receivable; (iii) any other Dilution Factors; (iv) the taking of
Receivable Notes; and (v) all Write-Offs. At any time and from
time to time, following one Business Day's notice from WGRC or its
agents, representatives or permitted assignees, and during regular
business hours, the Servicer will permit WGRC or such agent,
representative or permitted assignee (A) to have access to the
Servicer's offices, properties and computer software for purposes
of examining and making copies of and abstracts from all such books
and records and (B) to discuss matters relating to the Purchased
Assets with any of the officers, employees, agents or
representatives of the Servicer having knowledge of such matters.
SECTION 5.04. Responsibilities of the Sellers. Anything
herein to the contrary notwithstanding:
(a) Each Seller shall (i) perform all of its obligations
under any contracts related to the Receivables sold by it hereunder
to the same extent as if such Receivables had not been sold
hereunder and the exercise by WGRC of its rights hereunder shall
not relieve such Seller from such obligations and (ii) pay when due
any taxes relating to the origination and sale of the Receivables
and the other Purchased Assets.
(b) WGRC and its assignees shall have no obligation or
liability with respect to any Receivable or related contracts, nor
shall WGRC or any such assignee be obligated to perform any of the
obligations of any Seller thereunder and each Seller agrees to
indemnify and hold harmless WGRC and its assignees against and from
any and all liabilities arising from or related to any such
obligation or liability.
SECTION 5.05. Further Action Evidencing Purchases. (a) Each
Seller agrees that at any time and from time to time, at its
expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that may be
necessary to perfect, protect or more fully evidence WGRC's
ownership of the Purchased Assets, or to enable WGRC to exercise or
enforce any of its rights hereunder. Without limiting the
generality of the foregoing, each Seller will (i) cause its
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computer files relating to the Receivables (by means of a general
legend that will automatically appear at or near the beginning of
any computer generated list or print-out of the Receivables or
otherwise) to indicate that, unless otherwise specifically
identified on such list or print-out as a Receivable not so sold,
all Receivables included in such list or print-out and Related
Security have been sold to WGRC in accordance with this Agreement
and (ii) promptly execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such
other instruments and notices, as may be necessary or appropriate
or as WGRC or any of its agents, representatives or permitted
assignees may reasonably request.
(b) In the event that any Seller, within five (5) Business
Days after notice from WGRC, fails to deliver to WGRC one or more
financing or continuation statements, and amendments thereto and
assignments thereof, that WGRC or any of its agents,
representatives or permitted assignees may reasonably determine to
be necessary to evidence or perfect WGRC's ownership of all or any
of the Purchased Assets now existing or hereafter arising, then
such Seller hereby authorizes WGRC to file any such statements
without the signature of such Seller where permitted by law. A
carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Purchased Assets or any part
thereof, shall be sufficient as a financing statement. If any
Seller fails to perform any of its agreements or obligations under
this Agreement, following expiration of any applicable cure period,
WGRC may (but shall not be required to) perform, or cause
performance of, such agreement or obligation, and the reasonable
expenses of WGRC incurred in connection therewith shall be payable
by such Seller upon WGRC's written demand therefor (which demand
shall itemize such expenses in reasonable detail).
SECTION 5.06. Application of Collections. Any payment by an
Obligor in respect of any indebtedness or other obligations owed by
such Obligor to any Seller or WGRC shall, except as otherwise
specified by such Obligor or otherwise required by law, be applied
as a Collection of any Receivable of such Obligor purchased
hereunder (in the order of the age by invoice date of such
Receivables, starting with the oldest such Receivable) to the
extent of any amounts then due and payable thereunder before being
applied to (i) any Receivable arising subsequent to the Termination
Date which is not purchased hereunder or (ii) any other
indebtedness of such Obligor to any Seller.
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. Indemnities by the Sellers. Without limiting
any other rights which WGRC may have hereunder or under applicable
law, but without duplication, each Seller hereby agrees to
indemnify WGRC and its permitted assignees and its and their
respective officers, directors, agents and employees (all of the
foregoing collectively referred to herein as "Indemnitees") from
and against any and all damages, losses, claims, liabilities, costs
and expenses, including reasonable attorneys' fees, and dis-
bursements (all of the foregoing collectively referred to herein as
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the "Indemnified Amounts") awarded against or incurred by any
Indemnitee relating to or resulting from this Agreement or the
acquisitions or ownership by WGRC of any Purchased Assets
(excluding, however, any such amounts to the extent the same
comprise recourse for Receivables which are not collected, not paid
or uncollectible on account of the insolvency, bankruptcy,
inability or failure to pay or lack of creditworthiness of the
applicable Obligor). Without limiting the foregoing (but subject
to the exclusion in the immediately preceding sentence), each
Seller shall indemnify the Indemnitees for Indemnified Amounts
relating to or resulting from:
(i) any representation or warranty made by such
Seller (or any of its officers) (individually or as
Servicer) under or in connection with this Agreement or
in connection with the preparation or delivery of any
Daily Report, any Settlement Statement, or any other
information or report delivered pursuant hereto, which
shall have been false, incomplete or incorrect in any
respect when made;
(ii) the failure by such Seller (individually or as
Servicer) to comply with any term, provision or covenant
contained in this Agreement, any other Facility Document
or any agreement executed in connection with this
Agreement or any other Facility Document (in each case,
where such Seller is a party thereto), or with any
applicable law, rule or regulation with respect to any
Receivable, the related Invoice or the Related Security,
or the nonconformity of any Receivable, the related
Invoice or the Related Security with any such applicable
law, rule or regulation;
(iii) the failure of such Seller to vest and
maintain vested in WGRC or to transfer to WGRC, legal and
equitable title to and ownership of the Receivables and
other Purchased Assets which are, or are purported to be,
sold by such Seller hereunder, free and clear of any Lien
(other than Liens created in favor of WGRC hereunder and
Liens created under the other Facility Documents),
including all amounts expended by WGRC pursuant to
Section 4.03(a);
(iv) the failure by such Seller to file, or any
delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any
Receivables and other Purchased Assets which are, or are
purported to be, sold by such Seller hereunder, whether
at the time of any Purchase or at any subsequent time;
(v) the failure by such Seller to be duly qualified
to do business, to be in good standing or to have filed
appropriate fictitious or assumed name registration
documents in any jurisdiction;
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(vi) any dispute, claim, offset or defense to the
payment of any Receivable (other than discharge in
bankruptcy or under similar insolvency law) which is, or
is purported to be, sold by such Seller hereunder which
dispute, claim, offset or defense is based on the
Receivable or related Invoice not being a legal, valid
and binding obligation of the related Obligor,
enforceable in accordance with its terms, or which
relates to Dilution Factors or to such Receivables being
Noncomplying Receivables on the date of Purchase or on
any similar ground not related to the creditworthiness of
the applicable Obligor or any other claim asserted
against any Indemnitee resulting from the sale of the
merchandise or services related to such Receivable or the
furnishing or failure to furnish such merchandise or
services;
(vii) any products liability claim or personal
injury or property damage suit or other similar or
related claim or action of whatever sort arising out of
or in connection with the goods and/or merchandise or
services that are the subject of any Receivable generated
by such Seller or related Invoice or contract;
(viii) the failure of such Seller to pay when due
(A) any taxes or charges imposed on such Seller or (B)
any sales taxes or other charges imposed in connection
with such Seller's transfer of Purchased Assets hereunder
(other than taxes on or measured by the net income of
WGRC or any of its permitted assignees);
(ix) the failure of such Seller (individually or as
Servicer or subservicer) or any of its agents or
representatives (including, without limitation, agents,
representatives and employees of such Seller acting
pursuant to authority granted under Section 5.02) to
perform its duties and obligations in accordance with the
provisions of this Agreement, or to remit to WGRC,
Collections of Purchased Assets received by such Seller
or any such agent or representative;
(x) the commingling of Collections of Purchased Assets
with any other funds of such Seller; and
(xi) claims, demands, liabilities, damages, losses,
costs, changes and expenses (including reasonable attorneys'
fees) which WGRC or any other Indemnitee may incur or be
subject to as a consequence, direct or indirect, of the
issuance of any Letter of Credit; provided, that nothing in
this Section 6.01(xi) shall impose on any Seller the
obligation to reimburse any Indemnitee for draws under any
Letters of Credit or routine costs and expenses incidental to
the issuance, administration, or funding of any draws under,
any Letters of Credit.
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It is expressly agreed and understood by the parties (i) that such
indemnification is not intended to constitute a guarantee of the
collectibility or payment of the Receivables sold hereunder and the
other Purchased Assets and (ii) that nothing in this Section 6.01
shall require any Seller to indemnify any Indemnitee (A) for
damages, losses, claims or liabilities or related costs or expenses
resulting from such Indemnitee's gross negligence or willful
misconduct or (B) for lost profits, consequential, special or
punitive damages. In addition to the foregoing, Wyman, as
Servicer, agrees to indemnify the Indemnitees from and against all
Indemnified Amounts relating to or resulting from any of the
foregoing to the extent that such Indemnified Amounts also relate
to or result from any breach of its duties to be performed
hereunder and under the other Facility Documents as Servicer. From
and after the notice to the Sellers of any assignment by any
Indemnitee to another Indemnitee (including, without limitation,
the assignments by WGRC to the Agents and the Banks), the gross
negligence or willful misconduct of such assignor (including,
without limitation, WGRC or its officers, directors, agents or
employees) shall not be a defense to, or in any other way adversely
affect, mitigate or diminish such assignee Indemnitee's right or
claim to indemnification under this Section 6.01; in addition, the
gross negligence or willful misconduct of any Bank entitled to
indemnification hereunder shall not be a defense to, or in any
other way adversely affect, mitigate or diminish any other Bank's
right to indemnification under this Section 6.01. Any amounts
subject to the indemnification provisions of this Section 6.01
shall be paid by the applicable Seller to the Collection Account
for distribution to the applicable Indemnitees within five (5)
Business Days following such Indemnitees' written demand therefor,
setting forth in reasonable detail the basis for such demand.
Notwithstanding anything to the contrary in this Agreement, for
purposes of this Section 6.01, the representations, warranties and
covenants contained in Sections 3.01(a), 3.01(b), 3.01(k), 3.01(w),
4.01(a), 4.01(b), 4.01(c), and 4.01(n) shall not be deemed to be
limited to failures to perform or comply or to events,
circumstances, conditions or changes that did give rise to a
Material Adverse Effect.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment to or waiver of
any provision of this Agreement nor consent to any departure by any
Seller or WGRC therefrom, shall in any event be effective unless
the same shall be in writing and signed by each Seller and WGRC and
such other parties (including the Rating Agency) whose consent may
be required under the Revolving Credit Agreement. WGRC shall give
concurrent notice of any such amendment, waiver or consent to the
Rating Agency whether or not such confirmation from the Rating
Agency is required. Any such waiver, consent or approval shall be
effective only in the specific instance and for the specific
purpose for which given.
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SECTION 7.02. Notices, Etc. Any notice shall be conclusively
deemed to have been received by a party hereto and, subject to
Section 7.04, to be effective (i) if sent by regular mail,
commercial delivery service or by personal delivery, on the day on
which delivered to such party at its address set forth under its
name on the signature pages hereof (or at such other address as
such party shall specify to the other parties hereto in writing);
(ii) if sent by telex, graphic scanning or other telecopy
communications of the sending party, when delivered by such
equipment to the number set forth under its name on the signature
pages hereof with receipt confirmed in full by telephone or
(iii) if sent by registered or certified mail, on the day on which
delivered to such party (or delivery is refused), addressed to such
party at its address set forth under its name on the signature
pages hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto.
Notices required to be delivered to the Facility Agent, the
Collateral Agent or the Rating Agency shall be given in the manner
described in, and shall be effective in accordance with the terms
of, Section 12.05 of the Revolving Credit Agreement.
Notwithstanding the foregoing, notices and communications pursuant
to Article II will not be effective until received by the
addressee.
SECTION 7.03. No Waiver; Remedies. No waiver of any breach
or default of or by any Seller or of or by WGRC under this
Agreement shall be deemed a waiver of any other previous breach or
default or any thereafter occurring. No failure on the part of
WGRC on the one hand, or a Seller on the other hand, to exercise,
and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right hereunder, or any abandonment or discontinuation of steps to
enforce such right, preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
SECTION 7.04. Binding Effect; Assignability. This Agreement
shall be binding upon and inure to the benefit of each Seller and
WGRC and their respective successors and permitted assigns. No
Seller may assign any of its rights and obligations hereunder or
any interest herein or any other Facility Documents (except for
assignments of rights hereunder or under the Intercompany Notes
from one Seller to another) without the prior written consent of
WGRC, the Facility Agent and all of the Banks and reconfirmation by
the Rating Agency of its rating with respect to the Facility;
provided, that nothing herein shall be deemed to prohibit or
require any consent with respect to the transfer of the capital
stock of WGRC by any Seller to another Seller or any other Person.
WGRC may (with concurrent notice to the Rating Agency) assign any
of its rights hereunder to any Person who (a) is not (and none of
whose Affiliates or Persons related thereto are) a competitor of or
engages in a business similar to that of any Seller, (b) agrees in
writing to observe the confidentiality provisions of Section 7.07
hereof, and (c) to the extent applicable, has the financial ability
to perform WGRC's obligations hereunder. Each Seller acknowledges
that WGRC intends, pursuant to the Revolving Credit Agreement, to
grant to the Collateral Agent for the benefit of the Banks a
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security interest in the Purchased Assets and to assign to the
Collateral Agent, as further security, all of WGRC's rights under
this Agreement. Each Seller consents to such grant and such
assignment, subject to the limitations on enforcement set forth in
the Revolving Credit Agreement and provided, further, that each of
the Agents, the Issuing Bank and the Banks acknowledge and agree in
writing to observe the confidentiality provisions thereof for the
benefit of the Sellers. Each Seller acknowledges and agrees that
the indemnification provisions of Article VI hereof run to the
benefit of each of the Facility Agent, the Collateral Agent, the
Banks and their respective officer,s directors, agents and
employees, as permitted assigns of WGRC, all of which parties are
entitled to the benefits of such Article. Each Seller agrees that
the Collateral Agent (and any other permitted assignee of WGRC or
of the Collateral Agent) shall have the right, as the assignee of
WGRC (or the assignee of such assignee) and subject to the terms of
the Facility Documents, to enforce this Agreement and to exercise
directly all of WGRC's rights and remedies under this Agreement.
Each Seller also agrees that (i) such Seller shall simultaneously
send to the Facility Agent a copy of all notices, financial
statements and certificates and supporting material, required to be
given by such Seller to WGRC hereunder; (ii) upon its receipt of a
notice of further assignment by WGRC or an assignee of WGRC, such
Seller shall send the assignee identified in such notice a copy of
all notices required to be given by such Seller to WGRC hereunder;
and (iii) so long as the Revolving Credit Agreement remains in
effect, such Seller shall make any payments required to be made to
WGRC under this Agreement directly to the Collection Account or to
such other account as the Collateral Agent may direct. WGRC and
each Seller hereby acknowledge and agree that the Agents, the
Issuing Bank and the Banks have each relied upon the terms and
provisions set forth in this Agreement in entering into the
Revolving Credit Agreement. This Agreement shall create and
constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and
effect until the Collection Date; provided, however, that the
provisions of Article VI, Section 7.06 and Section 7.07 shall be
continuing and shall survive any termination of this Agreement.
SECTION 7.05. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF PERSONAL SERVICE AND VENUE; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES) EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE INTERESTS OF WGRC IN THE PURCHASED ASSETS OR
REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
EACH OF THE SELLERS AND WGRC HEREBY AGREES TO THE NON-EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE CITY
OF NEW YORK, NEW YORK (AND ANY COURTS HEARING APPEALS FROM SUCH
STATE OR FEDERAL COURT), OVER ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, AND WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO SUCH PARTY AT THE
ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF. EACH OF THE
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SELLERS AND WGRC HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION
TO VENUE OF ANY ACTION INSTITUTED HEREUNDER WITHIN THE STATE OF NEW
YORK AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY ANY COURT IN SUCH STATE. NOTHING IN
THIS SECTION 7.05 SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF WGRC TO BRING ANY ACTION OR PROCEEDING AGAINST ANY SELLER
OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION TO THE
EXTENT NECESSARY FOR REALIZING ON ITS INTEREST IN ANY PURCHASED
ASSETS. EACH OF THE SELLERS AND WGRC HEREBY EXPRESSLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER
OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR UNDER OR IN
CONNECTION HEREWITH, AND AGREES THAT ANY SUCH ACTION SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY. THE TERMS AND PROVISIONS OF
THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT FOR THE PARTIES
ENTERING INTO THIS AGREEMENT.
SECTION 7.06. Costs, Expenses and Taxes. In addition to the
rights of indemnification under Article VI hereof, each Seller
agrees to pay on demand all reasonable costs and expenses of WGRC
in connection with the sales of Receivables hereunder, the
negotiation, preparation, execution and delivery of this Agreement
and all amendments with respect to this Agreement, including the
reasonable fees and out-of-pocket expenses of counsel for WGRC with
respect thereto and with respect to advising WGRC as to its rights
and remedies under this Agreement, and all costs and expenses
(including reasonable counsel fees and expenses) of WGRC and its
permitted assigns (including the Agents, the Banks and/or the
Issuing Bank) in connection with the enforcement as against the
Sellers of this Agreement and the other Facility Documents executed
by them. In addition, each Seller will pay any and all stamp and
similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, recording or
enforcement of this Agreement or the other Facility Documents, and
hereby indemnifies and saves WGRC harmless from and against any and
all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.
SECTION 7.07. Confidentiality. WGRC hereby acknowledges that
the Records and other information which the Sellers must assign
and/or deliver to WGRC hereunder may contain information in which
the Sellers have a proprietary interest and which may not, at the
time of assignment and/or delivery, be generally available to and
known by the public (including, without limitation, information
contained in the Information Memorandum). WGRC hereby agrees to
maintain as confidential all such information obtained from the
Sellers and not to disclose such information to any other Person,
provided, however, that nothing in this Section 7.07 shall (a)
restrict any Seller from disclosing such confidential information
to any Person nor (b) prevent WGRC from disclosing such information
(i) to any permitted assignee of WGRC, the Agents, the Issuing Bank
or any Bank (or their permitted prospective participants and
assignees), provided that each such party agrees in writing, for
the benefit of the Sellers, (x) to use such information and keep
such information confidential in accordance with the same terms set
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<PAGE> 39
forth herein or, in the case of the Agents, the Issuing Bank, any
Bank or any of their participants or assigns, as set forth in
Section 12.08 of the Revolving Credit Agreement as in effect on the
date hereof and (y) that it will not disclose such information to
any of its Affiliates which is not a financial institution or a
parent company of a financial institution, (ii) to its employees,
agents, attorneys, auditors and accountants, (iii) subject to the
further requirements set forth in this Section 7.07, upon the order
of any court or administrative agency or upon the request or demand
of any regulatory agency, authority or official having jurisdiction
over WGRC, (iv) which has (other than through a breach of this
Section 7.07) been obtained from any Person other than WGRC, any
Seller or any other party hereto, or (v) as otherwise expressly
contemplated by this Agreement or Section 12.08 of the Revolving
Credit Agreement as in effect on the date hereof. WGRC (a) will
provide the Sellers with prompt written notice of any subpoena or
any request or requirement by any governmental authority (other
than any such request or requirement in connection with an audit or
other regulatory review of a financial institution) for disclosure
of any confidential information so that the Sellers may seek a
protective order or other appropriate remedy prior to such
disclosure and (b) shall consult with the Sellers to a reasonable
extent on the advisability of taking legally available steps to
resist or narrow such request or requirement. In the event that
such protective order or other remedy is not obtained, WGRC will
exercise all reasonable efforts (x) to limit the information
disclosed to such information which it is legally required to
disclose and (y) to obtain reliable assurance that confidential
treatment will be accorded any such information so disclosed.
SECTION 7.08. Execution in Counterparts; Severability. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
In case any provision in or obligation under this Agreement 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.
SECTION 7.09. Termination Date. The agreement of the Sellers
to sell Receivables hereunder and the agreement of WGRC to purchase
Receivables shall in any event automatically terminate on the
Termination Date. Wyman shall have the right, by giving notice to
WGRC and to the Facility Agent as described in clause (vi) of the
definition of Liquidation Period in Annex I hereto, to cause the
Termination Date to occur on the date so designated in such notice.
Upon the occurrence and during the continuance of any Liquidation
Event, WGRC shall have the right, by giving notice to Wyman and to
the Facility Agent as described in clause (vii) of the definition
of Liquidation Period in Annex I hereto, to cause the Termination
Date to occur on the date so designated in such notice.
Notwithstanding any such termination described above, all other
provisions of this Agreement shall remain in full force and effect
as provided in Section 7.04. WGRC shall give the Rating Agency
prompt notice of the occurrence of the Termination Date. On or
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after the Collection Date, WGRC will, at the request and expense of
Wyman, execute and deliver to Wyman such UCC termination statements
and other documents and take such other action as Wyman may
reasonably request to evidence such termination.
SECTION 7.10. No Recourse. The obligations of each Seller
and WGRC hereunder shall be solely the obligations of such Seller
and/or WGRC, as applicable, and shall in all respects be non-
recourse to all of its respective officers, directors, controlling
persons or stockholders, and each of the Sellers and WGRC
acknowledges the same with respect to the other and, to the fullest
extent permitted by law, waives any such recourse and any claim
against any of such parties of the other arising hereunder,
provided that nothing herein shall constitute a waiver of any
rights that one Person may have against any other Person on account
of any claim for intentional fraud, including any such claims for
deceit or intentional misrepresentation or omission.
SECTION 7.11. No Proceedings. Each Seller and the Servicer
hereby agrees, on behalf of itself and of all holders of the
Intercompany Notes, that it will neither (i) institute against WGRC
any involuntary proceeding of the type referred to in the
definition of "Insolvency Event" so long as this Agreement remains
in full force and effect and for at least one year and one day
following termination of this Agreement nor (ii) in its capacity
(if any) as a shareholder of WGRC, cause WGRC to file any voluntary
proceeding of the type referred to in the definition of "Insolvency
Event" except as otherwise permitted under WGRC's certificate of
incorporation.
SECTION 7.12. Entire Agreement. This Agreement, together
with the other Facility Documents, including the annexes, exhibits
and schedules hereto and thereto, contains a final and complete
integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all previous oral statements and
other writings with respect thereto.
SECTION 7.13. Survival of Agreement. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the Effective
Date and/or the Initial Purchase Date, as applicable, and each
Purchase thereafter and shall continue in full force and effect
until the later of (i) the Collection Date and (ii) the expiration
of all Letters of Credit.
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<PAGE> 41
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized,
as of the date first above written.
WYMAN-GORDON COMPANY,
in its individual capacity
and as Seller and Servicer
By: /s/ Wallace F. Whitney
Title : Vice President
Address: 244 Worcester Street
No. Grafton, MA 01536
Telephone: (508) 839-4441
Telecopy: (508) 839-7529
WYMAN-GORDON INVESTMENT CASTINGS, INC.,
in its individual capacity
and as Seller
By: /s/ Wallace F. Whitney
Title: Vice President
Address: 244 Worcester Street
No. Grafton, MA 01536
Telephone: (508) 839-4441
Telecopy: (508) 839-7529
PRECISION FOUNDERS, INC.,
in its individual capacity
and as Seller
BY: /s/ Wallace F. Whitney
Title: Vice President
Address: 244 Worcester Street
No. Grafton, MA 01536
WYMAN-GORDON RECEIVABLES CORPORATION,
in its individual capacity
and as Purchaser
By: /s/ Luis E. Leon
Title: President
Address: 244 Worcester Street
No. Grafton, MA 01536
Telephone: (508) 839-8350
Telecopy: (508) 839-7529
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<PAGE> 1
EXHIBIT 99.9
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into
effective May 24, 1994 by and between Wyman-Gordon Company, a
Massachusetts corporation (the "Company"), and David P. Gruber (the
"Executive").
WHEREAS, the Company wishes to retain the services of the
Executive to serve as its President and Chief Executive Officer;
and
WHEREAS, the Executive is willing to serve the Company in such
capacity;
NOW THEREFORE, in consideration of the Executive's service to
the Company and the mutual agreements contained herein, the Company
and the Executive hereby agree as follows:
1. Employment
The Company agrees to employ the Executive, and the Executive
agrees to serve, as the Company's President and Chief Executive
Officer (the "Office") on the conditions and subject to the
agreements expressed herein.
2. Extent of Service
Executive agrees to devote his full time and best efforts to
fulfilling the responsibilities of the Office, as defined from time
to time by the Board of Directors (the "Board"), to which he shall
report and from which he shall take direction. As part of his
responsibilities the Executive shall develop a succession plan for
the office of Chief Executive Officer and shall report annually to
the Board on such plan.
3. Term of Employment
(a) The Executive's employment under this Agreement shall
continue for a period of two years from May 24, 1994 (the
"Employment Period"). The Employment Period may be extended
by written agreement of the parties.
(b) The Company shall be permitted to terminate the Executive's
employment during the Employment Period only in the event of
Executive's Disability or death or for Cause. For purposes
of this Agreement, "Disability" shall mean an illness or
injury that prevents Executive from performing his duties
hereunder (as they existed immediately before the illness or
injury) on a full-time basis for at least six consecutive
months and qualifies him for benefits under the Company's
Long-Term Disability Plan. The Company shall have "Cause" to
terminate the Executive's employment only if the Executive
(i) intentionally engages in a dishonest act or acts with
respect to the Company or its subsidiaries; (ii) is convicted
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<PAGE> 2
of a crime involving moral turpitude or (iii) willfully or
through gross negligence commits a material violation of his
responsibilities to the Company hereunder or refuses to
follow legitimate direction from the Board, which violation
or refusal continues for more than 30 days after written
notice to the Executive setting forth in reasonable detail
the nature of the violations, given pursuant to a vote of a
majority of the members of the Board voting at a duly-held
regular or special meeting.
4. Compensation
The Executive shall receive during the Employment Period a
monthly gross base salary paid at the rate of $300,000 per year or
such higher rate as the Board shall approve. In addition to his
base salary, Executive shall be eligible to participate in the
Company's Management Incentive Plan, as such Plan may be in effect
from time to time.
5. Benefits
The Executive shall be entitled to participate in the
Company's Supplemental Retirement Plan for Senior Executives, and
receive, on the same basis as the Company's other executive
employees, all other benefits maintained by the Company for its
executive employees generally, including medical, dental, life and
disability insurance, vacation, participation in the
Savings/Investment Plan, the Long-Term Incentive Plan, the
Retirement Income Plan and any other health and welfare benefit
plans and perquisites, as in effect from time to time.
6. Benefits Upon Employment Termination
If the Company should terminate Executive's employment
hereunder during the Employment Period for reasons other than Cause
or Executive's death or Disability or if Executive should resign
his employment hereunder for Good Reason, as defined below, he
shall be entitled to the following:
(a) Payment of his base salary in effect at the time of
termination shall continue to be made during a period of two
years after such termination (the "post-termination period").
(b) All benefits including, without limitation, medical, dental
and life insurance, shall remain in effect during the
post-termination period or until the date on which Executive
first becomes eligible for insurance coverage of a similar
nature provided by a firm that employs him following such
termination of employment, whichever first occurs.
Notwithstanding the foregoing, nothing in this Agreement shall
require the Company to make any payment or to provide any benefit
to the Executive that the Company is otherwise required to provide
under any other contract, agreement, policy, plan or arrangement,
including, without limitation, an Executive Severance Agreement
dated as of October 16, 1991 by and between the Company and the
Executive.
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<PAGE> 3
7. Termination for Good Reason
The Executive shall have a Good Reason for terminating his
employment with the Company only if one or more of the following
occurs:
(a) an involuntary change in the Executive's status or position
with the Company that represents a demotion from the
Executive's then current status or position;
(b) the assignment to the Executive by the Board of any duties or
responsibilities that are materially inconsistent with the
Executive's then current status or position;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of the
Executive's employment for Cause or as a result of the
Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's base salary,
other than in the case of reductions in salary with respect
to the Company's executive officers generally;
(e) any action or inaction by the Company that would adversely
the Executive's continued participation in any Benefit Plan
on at least as favorable a basis as was the case at the time
of such action or inaction, or that would materially reduce
the Executive's benefits in the future under the Benefit Plan
or deprive him of any material benefits that he then enjoyed,
except to the extent that such action or inaction by the
Company (i) is also taken or not taken, as the case may be,
in respect of covered employees generally, (ii) is required
by the terms of any Benefit Plan as in effect immediately
before such action or inaction, or (iii) is necessary to
comply with applicable law or to preserve the qualification
of any Benefit Plan under section 401(a) of the Internal
Revenue Code;
(f) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company; and
(g) any material violation by the Company of a Performance Share
Agreement of even date, an Executive Severance Agreement
dated as of October 16, 1991, or any agreement under the
Wyman-Gordon Long-Term Incentive Plan (or any similar plan).
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. For purposes of this Section 7, "Benefit
Plan" means any compensation plan, such as an incentive (including
the Management Incentive Plan or comparable executive incentive
plan) or stock option plan, or any employee benefit plan, such as a
thrift, pension, profit-sharing, stock bonus, long-term
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<PAGE> 4
performance award, medical, disability, accident, or life insurance
plan, or any other plan, program or policy of the Company that is
intended to benefit employees.
8. Non-Competition
The Executive agrees that for a period of two years following
expiration or termination of the Employment Period, except where
termination by the Company is made without Cause or termination by
the Executive is made with Good Reason, he will not engage in any
employment or other activity, whether as an employee, director,
principal, guarantor or creditor of, or as a consultant or advisor
to, or as an investor (other than as an investor in less than one
percent of the outstanding stock of a corporation whose stock is
publicly traded) in or for the benefit of, any corporation,
partnership, trust, proprietorship, business or other entity whose
business is in competition with any business of the Company as then
conducted.
9. Confidential Information
Executive agrees that he shall not at any time during or
following the Employment Period disclose to any person, client,
employer, company or other party any confidential information
obtained by him incident to his employment by the Company relating
to the processes, products, machinery, apparatus, financial data,
business information or trade secrets of the Company, unless in
connection with the performance of his duties while employed
hereunder or, if after the termination of his employment or the
expiration of this Agreement, unless specifically authorized in
writing by the Board or successor Chief Executive Officer. Any
such information which the Company does not generally make
available to the public shall be considered confidential for
purposes of this Agreement, provided that any such information that
becomes public knowledge other than as a result of Executive's
breach of his obligations hereunder shall not be considered
confidential for purposes of this Agreement.
10. General Provisions
(a) Governing Law. Except as otherwise expressly provided
herein, this Agreement and the rights and obligations
hereunder shall be construed and enforced in accordance with
the laws of the Commonwealth of Massachusetts.
(b) Successor to the Company. This Agreement shall inure to the
benefit of and shall be binding upon and enforceable by the
Company and any successor thereto, including, without
limitation, any corporation or corporations acquiring
directly or indirectly all or substantially all of the
business or assets of the Company, whether by merger,
consolidation, sale or otherwise, but shall not otherwise be
assignable by the Company. Without limitation of the
foregoing sentence, the Company shall require any successor
(whether direct or indirect, by merger, consolidation, sale
or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form satisfactory to
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<PAGE> 5
the Executive, expressly, absolutely and unconditionally to
assume and to agree to perform this Agreement in the same
manner and to the same extent as the Company would have been
required to perform it if no such succession had taken place.
(c) Successor to the Executive. This Agreement shall inure to
the benefit of and shall be binding upon and enforceable by
the Executive and his personal and legal representatives,
executors, administrators, heirs, distributees and legatees
("Successors") but may not otherwise be assigned by
Executive.
(d) Notices. All notices provided for in this Agreement shall be
in writing. Notices to the Company shall be deemed given
when personally delivered or sent by certified or registered
mail or overnight delivery service to Wyman-Gordon Company,
244 Worcester Street, North Grafton, Massachusetts,
Attention: Company Clerk. Notices to the Executive shall be
deemed given when personally delivered or sent by certified
or registered mail or overnight delivery service to the last
address for the Executive shown on the records of the
Company. Either the Company or the Executive may, by notice
to the other, designate an address other than the foregoing
for the receipt of subsequent notices.
(e) Arbitration. All disputes arising under this Agreement which
cannot, after reasonable efforts, be resolved by the parties
shall be submitted to and settled by arbitration. Such
arbitration shall be effected by an arbitrator selected by
and shall be conducted in accordance with the Rules existing
at the date of such submission of the American Arbitration
Association. Any arbitration award shall be binding and
enforceable in any court of competent jurisdiction. Each of
the parties shall bear its own costs, expenses and attorneys'
fees in prosecuting, defending or enforcing any arbitration
hereunder.
(f) Waivers. No waiver of any provision of this Agreement shall
be valid unless approved in writing by the party giving such
waiver. No waiver of a breach under any provision of this
Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent
breach. No failure on the part of either the Company or the
Executive to exercise, and no delay in exercising, any right
or remedy conferred by law or this Agreement shall operate as
waiver of such right or remedy, and no exercise or waiver, in
whole or in part, of any right or remedy conferred by law or
herein shall operate as a waiver of any other right or
remedy.
(g) Severability. If any provision of this Agreement shall be
held invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall not affect any other
provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
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<PAGE> 6
(h) Counterparts. This Agreement may be executed in a number of
counterparts, each of which shall be deemed to be an original
but all of which together shall constitute a single
instrument.
(i) Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject
matter hereof. No amendment to this Agreement may be made
except in writing signed by both the Company and the
Executive.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/s/Wallace F. Whitney, Jr. By /s/John M. Nelson
Wallace F. Whitney, Jr. John M. Nelson
ATTEST:
/s/ Wallace F. Whitney, Jr. /s/David P. Gruber
Wallace F. Whitney, Jr. David P. Gruber
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<PAGE> 1
EXHIBIT 99.10
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into
effective March 4, 1994 by and between Wyman-Gordon Company, a
Massachusetts corporation with its principal place of business at
244 Worcester Street, North Grafton, Massachusetts 01536-8001 (the
"Company"), and J. Douglas Whelan of 15739 Tanya Circle, Houston,
Texas 77079-5060 (the "Executive").
WHEREAS, the Company wishes to retain the services of the
Executive as the President of its Forged Products Division; and
WHEREAS, the Executive is willing to serve the Company in such
capacity;
NOW THEREFORE, in consideration of the Executive's service to
the Company and the mutual agreements contained herein, the Company
and the Executive hereby agree as follows:
1. Employment
The Company agrees to employ the Executive, and the Executive
agrees to serve, as the President of the Company's Forged Products
Division (the "Office") on the conditions and subject to the
agreements expressed herein.
2. Extent of Service
Commencing May 1, 1994 Executive agrees to devote his full
time and best efforts to fulfilling the responsibilities of the
Office, as defined from time to time by the Company's Board of
Directors (the "Board"). In carrying out the duties of the Office,
Executive shall be responsible for consolidating and managing the
combined operations of the Company's Aerospace Forging Division
("AFD") and Cameron Forged Products Company ("Cameron") which the
Company proposes to acquire pursuant to a Stock Purchase Agreement
between the Company and Cooper Industries, Inc. dated January 10,
1994. In carrying out such duties, Executive shall be principally
located in Houston, Texas; provided, however, that he shall travel
regularly to the AFD's Massachusetts facilities; and provided,
further that if the Company does not complete the acquisition of
Cameron, Executive agrees to relocate, at the Company's expense in
accordance with its relocation policy, to the Worcester,
Massachusetts area.
3. Term of Employment
(a) The Executive's employment under this Agreement shall
commence on the date hereof and shall continue until December
31, 1996 (the "Employment Period").
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<PAGE> 2
(b) The Company shall be permitted to terminate the Executive's
employment during the Employment Period only in the event of
Executive's Disability or death or for Cause. For purposes
of this Agreement, "Disability" shall mean an illness or
injury that prevents Executive from performing his duties
hereunder (as they existed immediately before the illness or
injury) on a full-time basis for at least six consecutive
months and qualifies him for benefits under the Company's
Long-Term Disability Plan. The Company shall have "Cause" to
terminate the Executive's employment only if the Executive
(i) intentionally engages in a dishonest act or acts with
respect to the Company or its subsidiaries; (ii) is convicted
of a crime involving moral turpitude or (iii) willfully or
through gross negligence commits a material violation of his
responsibilities to the Company hereunder or refuses to
follow legitimate direction from the Board, which violation
or refusal continues or is not remedied for more than 30 days
after written notice to the Executive setting forth in
reasonable detail the nature of the violations, given
pursuant to a vote of a majority of the members of the Board
voting at a duly-held regular or special meeting.
4. Compensation
The Executive shall receive during the Employment Period a
monthly gross base salary paid at the rate of $204,000 per year or
such higher rate as the Board shall approve. In addition to his
base salary, the Company shall pay Executive $50,000 on May 1,
1994.
5. Benefits
(a) Stock Options
The Company's Management Resources and Compensation Committee
shall grant, at its first meeting following the date on which
Executive starts to provide services hereunder, options to
Executive to purchase 75,000 shares under the Company's
Long-Term Incentive Plan (the "Plan"), such grant to be on
customary terms and conditions relating to grants under the
Plan.
(b) Performance Bonus
The Company is currently devising an incentive
compensationplan for key Cameron and AFD employees
responsible for implementing the combination of Cameron with
the AFD. Executive shall participate in such incentive
compensation plan upon the same terms and conditions as are
applicable to other key Cameron and AFD employees. Such
incentive compensation program will be based on the annual
savings arising out of the combination and will be paid at
such time as the savings have been implemented. By way of
illustration, it is anticipated that such plan will pay out
approximately two times salary if $25 million of annual
savings are achieved.
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(c) Executive Severance Agreement
The Company and the Executive shall enter into an Executive
Severance Agreement in the standard form between the Company
and certain of its executive officers.
(d) Relocation Expenses
The Company agrees to pay for the cost of air freight
shipment of the Executive's household furnishings from
Milwaukee, Wisconsin to his home in Houston, Texas and the
cost of moving other household items out of storage into
Executive's Houston, Texas home. In addition, the Company
shall reimburse Executive or Ladish Co., Inc. ("Ladish") for
the cost of rental of the Executive's Milwaukee, Wisconsin
apartment and furniture incurred after the date of
Executive's termination of employment with Ladish.
(e) Indemnification
The Company agrees to indemnify and hold Executive harmless
from and against any claims by Ladish that the Executive
breached the terms of a letter agreement dated December 20,
1993 between the Executive and Ladish. In this regard
Executive shall not disclose, nor shall the Company require
Executive to disclose, any confidential or proprietary
information of Ladish.
(f) Post-Retirement Medical
The Company shall provide Executive post-retirement medical
coverage upon terms equivalent to those formerly offered to
Executive by Cooper Industries, Inc.
(g) Vacation
The Company shall give Executive credit for prior service
with Cameron for purposes of annual vacation entitlement.
(h) General
The Executive shall be entitled to receive, on the same basis
as the Company's other executive employees, all other
benefits maintained by the Company for its executive
employees generally, including medical, dental, life and
disability insurance, vacation, participation in the
Savings/Investment Plan, the Long-Term Incentive Plan, the
Retirement Income Plan and any other health and welfare
benefit plans and perquisites, as in effect from time to
time.
6. Benefits Upon Employment Termination
If the Company should terminate Executive's employment
hereunder during the Employment Period for reasons other than Cause
or Executive's death or Disability or if Executive should resign
his employment hereunder for Good Reason, as defined below, he
shall be entitled to the following:
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<PAGE> 4
(a) Payment of his base salary in effect at the time of
termination shall continue to be made during a period of two
years after such termination, or if such employment
terminates prior to December 31, 1994, until December 31,
1996 (the "post-termination period").
(b) All benefits including, without limitation, medical, dental
and life insurance, shall remain in effect during the
post-termination period or until the date on which Executive
first becomes eligible for insurance coverage of a similar
nature provided by a firm that employs him following such
termination of employment, whichever first occurs.
Notwithstanding the foregoing, nothing in this Agreement shall
require the Company to make any payment or to provide any benefit
to the Executive that the Company is otherwise required to provide
under any other contract, agreement, policy, plan or arrangement,
including, without limitation, the Executive Severance Agreement
referred to above in Section 5(c).
7. Termination for Good Reason
The Executive shall have a Good Reason for terminating his
employment with the Company only if one or more of the following
occurs:
(a) an involuntary change in the Executive's status or position
with the Company that represents a demotion from the
Executive's then current status or position;
(b) the assignment to the Executive by the Board of any duties or
responsibilities that are materially inconsistent with the
Executive's then current status or position;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of the
Executive's employment for Cause or as a result of the
Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's base salary,
other than in the case of reductions in salary with respect
to the Company's executive officers generally;
(e) any action or inaction by the Company that would adversely
affect the Executive's continued participation in any Benefit
Plan on at least as favorable a basis as was the case at the
time of such action or inaction, or that would materially
reduce the Executive's benefits in the future under the
Benefit Plan or deprive him of any material benefits that he
then enjoyed, except to the extent that such action or
inaction by the Company (i) is also taken or not taken, as
the case may be, in respect of covered employees generally,
(ii) is required by the terms of any Benefit Plan as in
effect immediately before such action or inaction, or (iii)
is necessary to comply with applicable law or to preserve the
qualification of any Benefit Plan under section 401(a) of the
Internal Revenue Code;
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(f) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company; and
(g) any material violation by the Company of any agreement
(including this Agreement) between it and the Executive.
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. For purposes of this Section 7, "Benefit
Plan" means any compensation plan, such as an incentive or stock
option plan, or any employee benefit plan, such as a thrift,
pension, profit-sharing, stock bonus, long-term performance award,
medical, disability, accident, or life insurance plan, or any other
plan, program or policy of the Company that is intended to benefit
employees.
8. Confidential Information
Executive agrees that he shall not at any time during or
following the Employment Period disclose to any person, client,
employer, company or other party any confidential information
obtained by him incident to his employment by the Company relating
to the processes, products, machinery, apparatus, financial data,
business information or trade secrets of the Company, unless in
connection with the performance of his duties while employed
hereunder or, if after the termination of his employment or the
expiration of this Agreement, unless specifically authorized in
writing by the Board or successor Chief Executive Officer. Any
such information which the Company does not generally make
available to the public shall be considered confidential for
purposes of this Agreement, provided that any such information that
becomes public knowledge other than as a result of Executive's
breach of his obligations hereunder shall not be considered
confidential for purposes of this Agreement.
9. General Provisions
(a) Governing Law. Except as otherwise expressly provided
herein, this Agreement and the rights and obligations
hereunder shall be construed and enforced in accordance with
the laws of the Commonwealth of Massachusetts.
(b) Successor to the Company. This Agreement shall inure to the
benefit of and shall be binding upon and enforceable by the
Company and any successor thereto, including, without
limitation, any corporation or corporations acquiring
directly or indirectly all or substantially all of the
business or assets of the Company, whether by merger,
consolidation, sale or otherwise, but shall not otherwise be
assignable by the Company. Without limitation of the
foregoing sentence, the Company shall require any successor
(whether direct or indirect, by merger, consolidation, sale
or otherwise) to all or substantially all of the business or
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<PAGE> 6
assets of the Company, by agreement in form satisfactory to
the Executive, expressly, absolutely and unconditionally to
agree to perform this Agreement in the same manner and to the
same extent as the Company would have been required to
perform it if no such successio had taken place.
(c) Successor to the Executive. This Agreement shall inure to
the benefit of and shall be binding upon and enforceable by
the Executive and his personal and legal representatives,
executors, administrators, heirs, distributees and legatees
("Successors") but may not otherwise be assigned by
Executive.
(d) Notices. All notices provided for in this Agreement shall be
in writing. Notices shall be deemed given when personally
delivered or sent by certified or registered mail or
overnight delivery service to a party at the address at the
beginning of this Agreement. Either the Company or the
Executive may, by notice to the other, designate an address
other than the foregoing for the receipt of subsequent
notices.
(e) Arbitration. All disputes arising under this Agreement which
cannot, after reasonable efforts, be resolved by the parties
shall be submitted to and settled by arbitration. Such
arbitration shall be effected by an arbitrator selected by
and shall be conducted in accordance with the Rules existing
at the date of such submission of the American Arbitration
Association. Any arbitration award shall be binding and
enforceable in any court of competent jurisdiction. Each of
the parties shall bear its own costs, expenses and attorneys'
fees in prosecuting, defending or enforcing any arbitration
hereunder.
(f) Waivers. No waiver of any provision of this Agreement shall
be valid unless approved in writing by the party giving such
waiver. No waiver of a breach under any provision of this
Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent
breach. No failure on the part of either the Company or the
Executive to exercise, and no delay in exercising, any right
or remedy conferred by law or this Agreement shall operate as
waiver of such right or remedy, and no exercise or waiver, in
whole or in part, of any right or remedy conferred by law or
herein shall operate as a waiver of any other right or
remedy.
(g) Severability. If any provision of this Agreement shall be
held invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall not affect any other
provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
(h) Counterparts. This Agreement may be executed in a number of
counterparts, each of which shall be deemed to be an original
but all of which together shall constitute a single
instrument.
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(i) Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject
matter hereof. No amendment to this Agreement may be made
except in writing signed by both the Company and the
Executive.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/s/Shirley A. Pero By /s/David P. Gruber
Shirley A. Pero David P. Gruber
ATTEST:
/s/Wallace F. Whitney, Jr. /s/J. Douglas Whelan
Wallace F. Whitney, Jr. J. Douglas Whelan
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<PAGE> 1
EXHIBIT 99.11
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), in consideration of services heretofore rendered and to
be rendered during the term of this Agreement, hereby issues and
transfers to David P. Gruber of 16 Carding Mill Road, Sudbury,
Massachusetts (the "Grantee"), President and Chief Executive
Officer of the Company, 150,000 shares (the "Shares") of the
Company's common stock, par value $1.00 per share, (the "Company
Common Stock") having a restricted period beginning on May 24, 1994
and ending on May 24, 1999 (the "Restricted Period") pursuant to
the terms and conditions set forth in the Wyman-Gordon Company
Long-Term Incentive Plan, as it may be amended from time to time in
accordance with its terms (the "Plan") and this Performance Share
Agreement, as it may be amended from time to time in accordance
with its terms (the "Agreement"). By execution of this Agreement,
the Grantee acknowledges receipt of a copy of the Plan and further
agrees to be bound thereby and by the actions, pursuant to the
Plan, of the Committee referred to in the Plan (the "Committee")
and of the Company's Board of Directors.
(1) The Grantee acknowledges receipt of a stock
certificate registered in his name for the Shares and bearing a
legend setting forth the restrictions set forth in Section (2) of
this Agreement. The Grantee agrees, concurrently with the
execution of this Agreement, to deposit such stock certificate with
the Company together with a stock power relating thereto endorsed
in blank.
(2) The Grantee acknowledges that the Shares may not be
sold, assigned, transferred, pledged or otherwise encumbered during
the Restricted Period except in accordance with the terms of this
Agreement. If the Grantee ceases to be employed by the Company
prior to the end of the Restricted Period, his rights to the Shares
shall thereupon be forfeited and revert to the Company.
Notwithstanding the foregoing if the Grantee's employment is so
terminated by Grantee's death or permanent disability, the
Restricted Period shall be deemed to have ended on the date of
Executive's death or permanent disability for the purposes of
determining the number of Shares, if any, as to which restrictions
would lapse in accordance with Section (3) below. The number of
shares as to which restrictions shall lapse under this Section (2)
in the event of such death or permanent disability shall be the
number of Shares determined in accordance with the previous
sentence multiplied by a fraction the numerator of which shall be
the full number of months the Executive has served as Chief
Executive Officer of the Company during the Restricted Period and
the denominator of which shall be 60. The restrictions contained
herein on the number of Shares as so determined shall be deemed
lapsed and terminated and such Shares shall not be forfeited and
shall vest in Grantee or Grantee's Beneficiary referred to in
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<PAGE> 2
Section (15) hereof. For example, if the price of the Shares
reaches $10.00 for the period specified in clause (ii) of the first
sentence of Section (3) and the Executive shall have served as
Chief Executive Officer of the Company for 28 months during the
Restricted Period, then the number of shares as to which
restrictions shall lapse shall be 100,000 shares multiplied by 28
and divided by 60 or 46,666 2/3 shares.
If an event of a Change of Control, as hereinafter
defined, shall occur, the Committee in its sole discretion may, but
need not, determine that the restrictions shall be deemed lapsed
and terminated with respect to some or all of the Shares and such
Shares, if any as determined by the Committee, shall not be
forfeited and shall vest in the Grantee.
(3) At the end of the Restricted Period, the Committee
shall determine the average closing price of the Company Common
Stock on the NASDAQ National Market System, or on any successor
market or exchange in which the Company Common Stock is publicly
traded, as quoted in the Wall Street Journal for each of the
following periods (i) the last 30 business days of the Restricted
Period and (ii) the period of 90 consecutive business days during
which the Company Common Stock had the highest average closing
price at any time during the Restricted Period. The higher of the
prices determined pursuant to the previous sentence shall be the
"Target Price." Restrictions on all or a portion of the Shares
will lapse at the conclusion of the Restricted Period only if the
Target Price has reached the amounts set forth below:
Portion of Shares on which
Target Price Restrictions will Lapse
Less than $10.00 None
$10.00 66 2/3%
More than $10.00 but Pro rata portion between
Less than $12.00 66 2/3% and 100%
$12.00 or More 100%
(4) Upon the expiration or termination of the
Restricted Period and the satisfaction of all other conditions
contained in this Agreement, including those set forth in Section 3
above, the restrictions applicable to the Shares shall lapse and a
stock certificate for the number of Shares with respect to which
the restrictions have lapsed shall be delivered to the Grantee,
free of all such restrictions except (i) any that may be imposed by
law and (ii) the further restriction that the Grantee shall retain
33 1/3% of such Shares for as long as he continues to serve as
Chief Executive Officer of the Company. Any Shares as to which the
restrictions shall not have lapsed hereunder shall be transferred
to the Company without any further action of the Grantee. The
Company shall not be required to deliver any fractional share of
Stock but will pay, in lieu thereof, the fair market value
(determined as of the date the restrictions lapse) of such
fractional share to the Grantee.
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<PAGE> 3
(5) The Grantee shall have all voting and dividend
rights with respect to the Shares, provided that dividends paid in
stock or other property shall be deposited with the Company
together with a stock power or other appropriate instrument of
transfer endorsed in blank and shall be subject to the same
restrictions as the Shares.
(6) The Shares have not been registered for resale
under the Securities Act of 1933, as amended, and may be offered
and sold only if registered pursuant to the provisions of that Act
or if an exemption from registration is available. The Grantee
hereby acknowledges that the Shares have not been so registered and
agrees to offer or sell same only if they have been registered
pursuant to the provisions of that Act or if an exemption from
registration is available. The Grantee understands that the
Company may place stop-transfer instructions with its transfer
agents with respect to the Shares and may cause all certificates
representing the Shares to be conspicuously legended to evidence
the fact that the Shares have not been registered under the
Securities Act of 1933, as amended, and may be offered or sold only
if registered pursuant to the provisions of that Act or if an
exemption from registration is available. The Grantee hereby
represents that he accepts the Shares for his own account for
investment and not with a view to, or for sale in connection with,
the distribution of any part thereof and the Grantee acknowledges
that he or his beneficiary may be required by the Committee to
repeat this representation in writing upon the delivery of shares
which are free of restrictions under this Agreement.
(7) If Grantee properly elects, within 30 days of the
date of this Agreement, to include in gross income for federal
income tax purposes an amount equal to the aggregate value of the
Shares subject to the Award based on the closing price of the Stock
on the date of this Agreement, Grantee shall make arrangements
satisfactory to the Committee to pay to the Company any federal,
state or local taxes required to be withheld with respect to such
Shares. If the Grantee shall fail to make such tax payments as are
required, the Company shall, to the extent permitted by law, have
the right to deduct from any payment of any kind otherwise due to
the Grantee any federal, state or local taxes of any kind required
by law to be withheld with respect to the Shares.
If the Grantee does not make the election
described above in this Section 7, Grantee shall, no later than the
date as of which the restrictions referred to in Section 3 and such
other restrictions as may have been imposed under this Agreement,
shall lapse, pay to the Company, or make arrangements satisfactory
to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld with respect to
the Shares, and the Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due
to the Grantee any federal, state or local taxes of any kind
required by law to be withheld with respect to the Shares. Any tax
withholding may be satisfied, at the discretion of the Committee,
by the Company's withholding Shares, otherwise deliverable to
Grantee hereunder with a Fair Market Value (as defined in the Plan)
equal to all or a portion of the amount to be withheld.
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<PAGE> 4
At the sole discretion of the Committee, the
Company may make a loan to Grantee in such amount as may be
required to discharge his federal income tax liability on account
of the lapsing of restrictions under Section (3) above assuming the
resulting income is taxable at the maximum applicable individual
federal income tax rate. Such loan shall have such maturity and
other terms and conditions as the Committee shall determine in its
sole discretion, and shall bear interest at the applicable federal
rate under Section 1274(d) of the Internal Revenue Code or any
successor provision thereto.
(8) The issuance of the Shares to Grantee shall be
subject to the condition that if at any time the Company shall
determine (in accordance with the provisions of the following
sentence) that it is necessary as a condition of, or in connection
with, such exercise (a) to satisfy withholding tax or other
withholding liabilities, (b) to effect the listing, registration,
or qualification on any securities exchange or under any state or
Federal law of any Shares otherwise deliverable in connection with
such exercise, or (c) to obtain the consent or approval of any
regulatory body, then in any such event such exercise shall not be
effective unless such withholding, listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company in
its reasonable and good faith judgment. Any such determination
(described in the preceding sentence) by the Company must be
reasonable, must be made in good faith, and must be made without
any intent to postpone or limit such exercise, grant or distribu-
tion beyond the minimum extent necessary and without any intent
otherwise to deny or frustrate the Grantee's rights in respect
thereof. In seeking to effect or obtain any such withholding,
listing, registration, qualification, consent or approval, the
Company shall act with all reasonable diligence.
(9) This Agreement is in all respects governed by the
terms of the Plan. All of the terms and provisions of the Plan are
hereby incorporated into this Agreement by reference and are made a
part of this Agreement. Each and every provision of this Agreement
shall be administered, interpreted, and construed so that this
Agreement shall conform to the provisions of the Plan. Any
provisions of this Agreement that cannot be so administered,
interpreted, or construed shall be disregarded, and, accordingly,
in the event of any conflict between this Agreement and the Plan,
the latter will govern. Any capitalized terms used herein and not
defined herein have the respective meanings ascribed to them in the
Plan. Whenever the word "Grantee" is used herein in a context
where the provision should logically be construed to apply to the
Grantee's Beneficiary, the word "Grantee" shall be deemed to
include such Beneficiary.
(10) In the event that there is any change in the
Company Common Stock through merger, consolidation, reorganization,
recapitalization, or otherwise; or if there shall be any dividend
on the Shares, payable in Shares, or an extraordinary cash dividend
or other extraordinary distribution; or if there shall be a stock
split, reverse stock split, combination of Shares, exercisability
of stock purchase rights received under the Company's Stockholder
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<PAGE> 5
Rights Plan, or other similar corporate transaction or event that
affects the Shares, such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of the rights of the Grantee or of the potential
benefits intended to be made available under this Agreement, the
number and kind of Shares and the other relevant provisions of this
Agreement shall be appropriately adjusted as provided in Section 13
of the Plan.
(11) For purposes of this Agreement, a Change in
Control shall be deemed to have occurred when and only when the
first of the following events occurs: (a) the acquisition
(including by purchase, exchange, merger or other business
combination, or any combination of the foregoing) by any
individuals, firms, corporations or other entities, other than a
Major Stockholder on the date of this Agreement, acting in concert
("Person"), together with all Affiliates and Associates of such
Person, of beneficial ownership of securities of the Company
representing 20 percent or more of the combined voting power of the
Company's then outstanding voting securities; or (b) members of the
Incumbent Board cease to constitute a majority of the Board of
Directors.
Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur pursuant to clause (a), above,
(i) solely because 20 percent or more of the combined voting power
of the Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Grantee is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Paragraph 11, the terms
"Affiliates" and "Associates" shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the 1934 Act; the terms "beneficial ownership" and "beneficially
owned" shall have the meaning set forth in section 13(d) of the
1934 Act, as amended, and in Rule 13d-3 promulgated thereunder; the
term "Major Stockholder" shall mean all Shares beneficially owned
by the Fuller Foundation, the Stoddard Charitable Trust, and
descendants of Harry G. Stoddard and their spouses; and the term
"Incumbent Board" shall mean (i) the members of the Board of
Directors on the date hereof, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual
who becomes a member of the Board of Directors after the date
hereof, if his election or nomination for election as a director
was approved by a vote of at least three quarters of the then
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the 1934
Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board of
Directors.
(12) Notices hereunder shall be mailed or delivered to
the Treasurer of the Company at its principal place of business at
Grafton, Massachusetts, and shall be mailed or delivered to Grantee
at his address set forth above or at such other address as he may
subsequently furnish the Treasurer of the Company in writing.
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(13) The Committee may not, without the written
consent of the Grantee, cause this Agreement to be revoked, and may
not without such written consent make or change any determination
or change any term, condition or provision hereunder if the
determination or change would reduce or adversely affect the
Grantee's rights hereunder.
(14) Notwithstanding anything herein to the contrary,
on or after the occurrence of a Change in Control, as defined
above, the Committee may not under any circumstances make or change
any determination or change any term, condition, or provision
affecting this Agreement if the determination or change would
reduce or adversely affect the Grantee's rights hereunder.
(15) The Grantee shall designate a Beneficiary in
writing and in such manner as is acceptable to the Company. If the
Grantee fails so to designate a Beneficiary, or if no such
designated Beneficiary survives the Grantee, the Grantee's
beneficiary shall be the Grantee's estate.
(16) Nothing in this Agreement shall confer upon the
Grantee the right to continue in the employment or service of the
Company or affect any right that the Company may have to terminate
the employment or service of (or to demote or to exclude from
future Awards under the Plan) the Grantee at any time for any
reason.
(17) So long as this Agreement shall remain in effect,
the Company shall furnish to the Grantee, as and when available, a
copy of any Prospectus issued with respect to the Shares covered
hereby, and also a copy of all material hereinafter distributed by
the Company to its stockholders generally.
(19) This Agreement is nontransferable by Grantee
other than by will or by the laws of descent and distribution.
This Agreement and the provisions thereof shall be binding upon,
and inure to the benefit of, any successor or successors of the
Company and the person or entity to whom his rights hereunder may
have been transferred by will, the laws of descent and distribu-
tion, or beneficiary designation hereunder.
(22) This Agreement shall be governed and its
provisions construed, enforced and administered in accordance with
the laws of the Commonwealth of Massachusetts except to the extent
that such laws may be superseded by any Federal law. It may not be
modified orally.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of May 24, 1994.
WYMAN-GORDON COMPANY
By: /s/ John M. Nelson
John M. Nelson, Chairman
/s/ David P. Gruber
David P. Gruber
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EXHIBIT 99.12
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated May 1, 1994, by and
between Wyman-Gordon Company, a Massachusetts corporation (the
"Company"), and J. Douglas Whelan (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to have the services of the
Executive as its President, Forged Products Division; and
WHEREAS, the Executive is willing to serve the Company as
its President, Forged Products Division, but desires assurance that
he will not be materially disadvantaged by a change in control of
the Company;
NOW, THEREFORE, in consideration of the Executive's
service to the Company and the mutual agreements herein contained,
the Company and the Executive hereby agree, as follows:
ARTICLE I
ELIGIBILITY FOR BENEFITS
Section 1.1 Qualifying Termination. The Company shall
not be required to provide any benefits to the Executive pursuant
to this Agreement unless a Qualifying Termination occurs before the
Agreement expires in accordance with Section 6.1 hereof. For
purposes of this Agreement, a Qualifying Termination shall occur
only if
(a) a Change in Control occurs, and
(b) within three years after the Change in Control,
(i) The Company terminates the Executive's
employment other than for Cause; or
(ii) the Executive terminates his employment with
the Company for Good Reason;
provided, that a Qualifying Termination shall not occur if the
Executive's employment with the Company terminates by reason of the
Executive's Disability, death, or retirement. For the purposes
hereof "retirement" shall mean any termination of employment which
occurs at or after age 65.
Section 1.2 Change in Control. Except as provided a
below, a Change in Control shall be deemed to occur when and only
when the first of the following events occurs:
(a) the acquisition (including by purchase, exchange,
merger or other business combination, or any combination
of the foregoing) by any individuals, firms, corporations
or other entities, other than a Major Stockholder on the
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date of this Agreement, acting in concert ("Person"),
together with all Affiliates and Associates of such
Person, of beneficial ownership of securities of the
Company representing 20 percent or more of the combined
voting power of the Company's then outstanding voting
securities; or
(b) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur pursuant to paragraph (a), above, (i) solely
because 20 percent or more of the combined voting power of the
Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Executive is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Section 1.2, the terms
"Affiliates" and "Associates shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934 (the Exchange Act"); the terms
"beneficial ownership" and "beneficially owned" shall have the
meaning set forth in section 13(d) of the Exchange Act, as amended,
and in Rule 13d-3 promulgated thereunder, the term "Major
Stockholder" shall mean all shares beneficially owned by the Fuller
Foundation, the Stoddard Charitable Trust, and descendants of Harry
G. Stoddard and their spouses; the term "Board of Directors" shall
mean the Board of Directors of the Company and the term "Incumbent
Board" shall mean (i) the members of the Board of Directors on the
date hereof, to the extent that they continue to serve as members
of the Board of Directors, and (ii) any individual who becomes a
member of the Board of Directors after the date hereof, if his
election or nomination for election as a director was approved by a
vote of at least three quarters of the then Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors.
Section 1.3. Termination for Cause. The Company shall have
Cause to terminate the Executive's employment with the Company for
purposes of Section 1.1 hereof only if the Executive (a) engages in
unlawful acts intended to result in the substantial personal
enrichment of the Executive at the Company's expense or (b) engages
(except (i) by reason of incapacity due to illness or injury or
(ii) in connection with an actual or anticipated termination of
employment by the Executive for Good Reason) in a material
violation of his responsibilities to the Company that results in a
material injury to the Company.
Section 1.4 Termination for Good Reason. The Executive
shall have a Good Reason for terminating employment with the
Company only if one or more of the following occurs after a Change
in Control:
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<PAGE> 3
(a) a change in the Executive's status or position
(including for this purpose a change in the principal
place of the Executive's employment on a basis that does
not conform with the Company's present policies for
executive relocation, but excluding required travel on
the Company's business to an extent substantially
consistent with the Executive's present business travel
obligations) with the Company that, in the Executive's
reasonable judgment, represents an adverse change from
the Executive's status or position in effect immediately
before the Change in Control;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable
judgment, are inconsistent with the Executive's status or
position in effect immediately before the Change in
Control;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of
the Executive's employment for Cause or as a result of
the Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in
Control (which shall be deemed, for this purpose, to be
equal to his base salary plus the most recent award that
he has earned under the Company's Incentive Compensation
Plan, as amended from time to time, or any successor
thereto (the "ICP")) or as the same may be increased
from time to time;
(e) the failure by the Company to continue in effect any
Plan in which the Executive is participating at the time
of the Change in Control (or plans or arrangements
providing the Executive with substantially equivalent
benefits) other than as a result of the normal expiration
of any such Plan in accordance with its terms as in
effect at the time of the Change in Control;
(f) any action or inaction by the Company that would
adversely affect the Executive's continued participation
in any Plan on at least as favorable a basis as was the
case at the time of the Change in Control, or that would
materially reduce the Executive's benefits in the future
under the Plan or deprive him of any material benefits
that he enjoyed at the time of the Change in Control,
except to the extent that such action or inaction by the
Company is required by the terms of the Plan as in effect
immediately before the Change in Control, or is necessary
to comply with applicable law or to preserve the
qualification of the Plan under section 401(a) of the
Internal Revenue Code, and except to the extent that the
Company provides the Executive with substantially
equivalent benefits;
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<PAGE> 4
(g) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company as provided by
Section 6.3 hereof;
(h) any material violation by the Company of any agreement
(including this Agreement) between it and the Executive; or
(i) the failure by the Company, without the Executive's
consent, to pay to him any portion of his current
compensation, or to pay to the Executive any portion of any
deferred compensation, within 30 days of the date the
Executive notifies the Company that any such compensation
payment is past due.
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. A Good Reason shall not be deemed to be
waived by reason of the Executive's continued employment as long as
the termination of the Executive's employment occurs within the
time prescribed by Section 1.1(b) hereof. For purposes of this
Section 1.4, "Plan" means any compensation plan, such as an
incentive or stock option plan, or any employee benefit plan, such
as a thrift, pension, profit-sharing, stock bonus, long-term
performance award, medical, disability, accident, or life insurance
plan, or any other plan, program or policy of the Company that is
intended to benefit employees.
Section 1.5 Disability. For purposes of this Agreement,
"Disability" shall mean illness or injury that prevents the
Executive from performing his duties (as they existed immediately
before the illness or injury) on a full-time basis for six
consecutive months.
Section 1.6 Notice. If a Change in Control occurs, the
Company shall notify the Executive of the occurrence of the Change
in Control within two weeks after the Change in Control.
ARTICLE II
BENEFITS AFTER A QUALIFYING TERMINATION
Section 2.1 Basic Severance Payment. If the Executive
incurs a Qualifying Termination following a Change in Control that
occurs on or before termination of this Agreement as provided in
Section 6.1 hereof, the Company shall pay within 30 days after the
date of the Qualifying Termination to the Executive a single lump
sum cash amount equal to his Total Annual Compensation multiplied
by the lesser of (a) 2.50 or (b) .0833 multiplied by the number of
full months remaining between termination and his attaining age 65.
"Total Annual Compensation" shall mean the sum of annual base
salary in effect immediately preceding termination or the Change of
Control, whichever is higher, and annual incentive compensation
earned under the "ICP" (annualized in the case of less than a full
year's service) in the last full fiscal year immediately preceding
termination or the Change of Control, whichever is higher.
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Section 2.2 Insurance. If the Executive incurs a Qualifying
Termination following a Change in Control that occurs on or before
termination of this Agreement as provided in Section 6.1 hereof,
the Company shall provide the Executive, at the Company's expense,
for a period beginning on the date of the Qualifying Termination,
the same medical, accident, disability, life and any other
insurance coverage as was provided to him by the Company
immediately before the Change in Control (or, if greater, as in
effect immediately before the Qualifying Termination occurs); such
coverage shall end upon the earlier of (a) the expiration of 24
months after the Qualifying Termination or (b) with respect to each
coverage, the date on which the Executive first becomes eligible
for insurance coverage of a similar nature provided by a firm that
employs his following the Qualifying Termination.
Section 2.3 Executive Long-Term Incentive Program. If
the Executive incurs a Qualifying Termination following a Change in
Control that occurs on or before termination of this Agreement as
provided in Section 6.1 hereof, all of the options to purchase
common stock of the Company (and the alternative common stock
appreciation rights) granted to the Executive prior to termination
of this Agreement as provided in Section 6.1 hereof, under the
Executive Long-Term Incentive Program shall become exercisable in
accordance with the terms set forth in the applicable Certificate
of Grant except that such options (and the alternative common stock
appreciation rights) shall be exercised within three years after
the Qualifying Termination.
Section 2.4 Nonduplication. Nothing in this Agreement
shall require the Company to make any payment or to provide any
benefit or service credit that the Company is otherwise required to
provide under any other contract, agreement, policy, plan, or
arrangement.
ARTICLE III
EFFECT OF SEVERANCE POLICY
Section 3.1 Effect on Severance Policy. If the
Executive becomes entitled to receive benefits hereunder, the
Executive shall not be entitled to any benefits under any other
Company severance policy.
ARTICLE IV
TAX MATTERS
Section 4.1 Withholding. The Company may withhold from
any amount payable to the Executive hereunder all federal, state or
other taxes that the Company may reasonably determine are required
to be withheld pursuant to any applicable law or regulation.
Section 4.2 Certain Additional Payments by the Company.
Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by
the Company to or for the benefit of the Executive that is
considered paid or payable or distributed or distributable in
connection with a Change in Control (a "Payment"), would be subject
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to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") or any interest or penalties
are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, being
collectively the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by the Executive of all taxes on
the Gross-Up Payment (including, without limitation, any income
taxes and Excise Tax imposed upon the Gross-Up Payment and any
interest or penalties imposed with respect to such taxes), the
Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments (as determined without regard
to the Gross-Up Payment). All determinations required to be made
under this Section 4.2, including whether a Gross-Up Payment is
required and the amount of such Gross-Up Payment, shall be made by
a nationally recognized independent accounting firm selected by the
Company (the "Accounting Firm") which shall provide detailed
supporting calculations to the Company and the Executive within 30
business days following the date of the Qualifying Termination, if
applicable, or such earlier time as the Company may request. All
fees and expenses of the Accounting Firm shall borne by the
Company. The Gross-Up Payment; if any, as determined pursuant to
this Section 4.2, shall be paid to the Executive within ten days
following receipt by the Company of the Accounting Firm's
determination. The Accounting Firm shall either make the
determination that a Payment is subject to the Excise Tax or it
shall furnish the Executive with an opinion that failure to report
the Excise Tax on the Executive's applicable Federal income tax
return would not result in the imposition of a negligence or
similar penalty, and, in the latter case (subject to the last
sentence of this paragraph), no Gross-Up Payment shall be required.
Any determination by the Accounting Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the
applicable of Section 4999 of the Code, it is possible that Gross-
Up Payments which will not have been made by the Company should
have been made (an "Underpayment") or that Gross-Up Payments which
have been made by the Company should not have been made (an
"Overpayment") or that Gross-Up Payments which have been made by
the Company should not have been made (an "Overpayment"),
consistent with the calculations required to be made hereunder.
The Accounting firm shall determine the amount of any Underpayment
or Overpayment that has occurred and (i) an amount equal to any
such Underpayment shall be promptly paid by the Company to or for
the benefit of the Executive and (ii) any amount refunded to the
Executive as a result of such Overpayment shall be promptly paid by
the Executive to the Company in an amount which will result in the
Executive being made whole on an after-tax basis.
ARTICLE V
COLLATERAL MATTERS
Section 5.1 Nature of Payments. All payments to the
Executive under this Agreement shall be considered either payments
in consideration of his continued service to the Company or
severance payments in consideration of his past services thereto.
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Section 5.2 Legal Expenses. The Company shall pay all
legal fees and expenses that the Executive may incur as a result of
the Company's contesting the validity, the enforceability or the
Executive's interpretation of, or determinations under, this
Agreement.
Section 5.3 Mitigation. The Executive shall not be
required to mitigate the amount of any payment provided for in this
Agreement either by seeking other employment or otherwise. The
amount of any payment provided for herein shall not be reduced by
any remuneration that the Executive may earn from employment with
another employer or otherwise following his Qualifying Termination.
Section 5.4 Authority. The execution of this Agreement
has been authorized by the Board of Directors of the Company.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Term of Agreement. This Agreement shall be
come effective on the date hereof and shall continue in effect
until the earliest of (a) December 31, 1996 if no Change in Control
has occurred before that date; provided, however, that commencing
on January 1, 1997 and each January 1 thereafter, the term of this
Agreement shall automatically be extended for an additional year
unless, not later than January 30 of the same year, the Company
shall have given notice that it does not wish to extend this
Agreement; (b) the termination of the Executive's employment with
the Company for any reason prior to a Change in Control; (c) the
Company's termination of the Executive's employment for Cause, or
the Executive's resignation for other than Good Reason, following a
Change in Control and the Company's and the Executive's fulfillment
of all of their obligations hereunder; and (d) the expiration
following a Change in Control of three years and the fulfillment by
the Company and the Executive of all of their obligations
hereunder. Furthermore, nothing in this Article VI shall cause
this Agreement to terminate before both the Company and the
Executive have fulfilled all of their obligations hereunder.
Section 6.2 Governing Law. Except as otherwise
expressly provided herein, this Agreement and the rights and
obligations hereunder shall be construed and enforced in accordance
with the laws of The Commonwealth of Massachusetts.
Section 6.3 Successor to the Company. This Agreement
shall inure to the benefit of and shall be binding upon and
enforceable by the Company and any successor thereto, including,
without limitation, any corporation or corporations acquiring
directly or indirectly all or substantially all of the business or
assets of the Company, whether by merger, consolidation, sale or
otherwise, but shall not otherwise be assignable by the Company.
Without limitations of the foregoing sentence, the Company shall
require any successor (whether direct or indirect, by merger,
consolidation, sale or otherwise) to all of substantially all of
the business or assets of the Company, by agreement in form
satisfactory to the Executive, expressly, absolutely and
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unconditionally to assume and to agree to perform this Agreement in
the same manner and to the same extent as the Company would have
been required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
heretofore defined and any successor to all or substantially all of
its business or assets that executes and delivers the agreement
provided for in this Section 6.3 or that becomes bound by this
Agreement either pursuant to this Agreement or by operation of law.
Section 6.4 Successor to the Executive. This Agreement
shall inure to the benefit of and shall be binding upon and
enforceable by the Executive and his personal and legal
representatives, executors, administrators, heirs, distributees,
legatees and, subject to the Section 6.6 hereof, his designees
("Successors"). If the Executive should die while amounts are or
may be payable to him under this Agreement, references hereunder to
the "Executive" shall, where appropriate, be deemed to refer to
this Successors; provided that nothing in this Section 6.5 shall
supersede the terms of any plan or arrangement (other than this
Agreement) that is affected by this Agreement.
Section 6.5 Nonalienability. No right of or amount
payable to the Executive under this Agreement shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment,
pledge, hypothecation, encumbrance, charge, execution, attachment,
levy or similar process or to setoff against any obligations or to
assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately
preceding sentence shall be void. However, this Section 6.6 shall
not prohibit the Executive from designating one or more persons, on
a form satisfactory to the Company, to receive amounts payable to
him under this Agreement in the event that he should die before
receiving them.
Section 6.6 Notices. All notices provided for in this
Agreement shall be in writing. Notices to the Company shall be
deemed given when personally delivered or sent by certified or
registered mail or overnight delivery services to Wyman-Gordon
Company, 244 Worcester Street, No. Grafton, Massachusetts 01613,
Attention: Company Clerk. Notices to the Executive shall be
deemed given when personally delivered or sent by certified or
registered mail or overnight delivery service to the last address
for the Executive shown on the records of the Company. Either the
Company or the Executive may, be notice to the other, designate an
address other than the foregoing for the receipt of subsequent
notices.
Section 6.7 Amendment. No amendment to this Agreement shall
be effective unless in writing and signed by both the Company and
the Executive.
Section 6.8 Waivers. No waiver of any provision of this
Agreement shall be valid unless approved in writing by the party
giving such waiver. No waiver of a breach under any provision of
this Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent breach. No
failure on the part of either the Company or the Executive to
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exercise, and no delay in exercising, any right or remedy conferred
by law or this Agreement shall operate as waiver of such right or
remedy, and no exercise or waiver, in whole or in part, or any
right or remedy conferred by law or herein shall operate as a
waiver of any other right or remedy.
Section 6.9. Severability. If any provision of this
Agreement shall be held invalid or unenforceable in whole or in
part, such invalidity or unenforceability shall not affect any
other provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
Section 6.10. Captions. The captions to the respective
articles and sections of this Agreement are intended for
convenience of reference only and have no substantive significance.
Section 6.11. Counterparts. This Agreement may be
executed in a number of counterparts, each of which shall be deemed
to be an original but all of which together shall constitute a
single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/s/ Shirley A. Pero By: /s/ John M. Nelson
Shirley A. Pero John M. Nelson, Chairman
and Chief Executive
Officer
ATTEST:
/s/ Wallace F. Whitney, Jr. /s/ J. Douglas Whelan
Wallace F. Whitney, Jr. J. Douglas Whelan
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