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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 10, 1999
CLARCOR Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-11024 36-0922490
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2323 Sixth Street, P.O. Box 7007, Rockford, Illinois 61125
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 815-962-8867
N/A
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 10, 1999, CLARCOR Inc. ("CLARCOR") entered into a Purchase
Agreement dated September 10, 1999 (the "Purchase Agreement") with Mark IV
Industries, Inc., a Delaware corporation, Facet Holding Co., Inc., a Delaware
corporation, Purolator Products Air Filtration Company, a Delaware corporation,
George W. Dahl Company, Inc., a Delaware corporation, and Mantronics Limited, a
corporation organized under the laws of the United Kingdom (collectively, the
"Sellers"). Pursuant to the terms and conditions of the Purchase Agreement, on
September 10, 1999, CLARCOR acquired substantially all of the assets used by
Sellers in the design, manufacture, marketing and distribution of a complete
line of specialty filters and filtration products primarily for residential,
commercial and industrial use in a wide range of market segments which include
original equipment manufacturers, aftermarket distributors, retail distributors,
contractors and aerospace, marine and military markets. CLARCOR, through its
subsidiaries, intends to continue these businesses to augment its other filter
businesses.
For financial and accounting purposes the acquisition was deemed to
have occurred on September 1, 1999. The purchase price for such assets was
$136,250,000 plus approximately $8 million from an increase in the net assets of
the businesses acquired (approximately $4,300,000 of which was cash). The
initial purchase price of $136,250,000 was based on the net assets of the
businesses acquired as shown on a February 28, 1999 balance sheet for such
businesses. The purchase price will be subject to a final adjustment based on
the net assets of the businesses shown on a final balance sheet.
The foregoing description of the Purchase Agreement does not purport to
be complete and is qualified in its entirety by reference to the Purchase
Agreement, a copy of which is filed as Exhibit 2 hereto.
The purchase price was paid in cash with the proceeds of loans obtained
by CLARCOR pursuant to a Multicurrency Credit Agreement dated as of September 9,
1999 among CLARCOR, Firstar Bank Milwaukee, National Association, Bank One,
Illinois, NA, Amcore Bank N.A., The Northern Trust Company, U.S. Bank National
Association, Suntrust Bank and Associated Bank, Illinois, N.A., Firstar Bank
Milwaukee, National Association, as Agent, and Bank One, Illinois, NA and Amcore
Bank N.A., as Co-agents. Borrowings under the Credit Agreement are unsecured,
but are guaranteed by certain of CLARCOR's subsidiaries. Reference is made to
Exhibit 4 to this Form 8-K for a copy of such Credit Agreement for further
information with respect to the loans thereunder.
The additional information required to be included in this report
pursuant to the disclosure requirements set forth in Item 2 of Form 8-K is
described in the Press Release filed as Exhibit 99 hereto and is incorporated by
reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) The financial statements required to be filed as a part of this report
pursuant to the requirements of Item 7 of Form 8-K are not included
herein and will be filed within the period of time permitted by Item 7
of Form 8-K.
(b) The pro forma financial statements required to be filed as a part of
this report pursuant to the requirements of Item 7 of Form 8-K are not
included herein and will be filed within the period of time permitted
by Item 7 of Form 8-K.
(c) Exhibits
2 Purchase Agreement dated September 10, 1999 by and among CLARCOR
Inc., Mark IV Industries, Inc., Facet Holding Co., Inc., Purolator
Products Air Filtration Company, George W. Dahl Company, Inc. and
Mantronics Limited.
4 Multicurrency Credit Agreement dated as of September 9, 1999 among
CLARCOR Inc., Firstar Bank Milwaukee, National Association, Bank
One, Illinois, NA, Amcore Bank N.A., The Northern Trust
Company, U.S. Bank National Association, Suntrust Bank and
Associated Bank, Illinois, N.A., Firstar Bank Milwaukee, National
Association, as Agent, and Bank One, Illinois, NA and Amcore
Bank N.A., as Co-agents.
99 Press Release issued by CLARCOR Inc. on September 13, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CLARCOR INC.
Date: September 17, 1999
By: /s/ Bruce A. Klein
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Bruce A. Klein
Vice President-Finance and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
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2 Purchase Agreement dated September 10, 1999 by and among CLARCOR
Inc., Mark IV Industries, Inc., Facet Holding Co., Inc., Purolator
Products Air Filtration Company, George W. Dahl Company, Inc. and
Mantronics Limited.
4 Multicurrency Credit Agreement dated as of September 9, 1999
among CLARCOR Inc., Firstar Bank Milwaukee, National Association,
Bank One, Illinois, NA, Amcore Bank N.A., The Northern Trust
Company, U.S. Bank National Association, Suntrust Bank and
Associated Bank, Illinois, N.A., and Firstar Bank Milwaukee,
National Association, as Agent, and Bank One, Illinois, NA and
Amcore Bank N.A., as Co-agents.
99 Press Release issued by CLARCOR Inc. on September 13, 1999.
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EXHIBIT 2
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PURCHASE AGREEMENT
BETWEEN
MARK IV INDUSTRIES, INC.,
FACET HOLDING CO., INC.
PUROLATOR PRODUCTS AIR FILTRATION COMPANY
GEORGE W. DAHL COMPANY, INC. and
MANTRONICS LIMITED
AND
CLARCOR INC.
Dated: September 10, 1999
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EXHIBIT 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE 1 TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES..........................................................6
1.01 Assets to be Sold..........................................................................................6
1.02 Excluded Assets...........................................................................................13
1.03 Assumed Liabilities.......................................................................................15
1.04 Disputed Assumed Liabilities..............................................................................18
1.05 Excluded Liabilities......................................................................................19
ARTICLE 2 PURCHASE PRICE.......................................................................................22
2.01 Purchase Price............................................................................................22
2.02 Payment of Purchase Price.................................................................................23
2.03 Definitions Relating to Purchase Price Adjustments........................................................23
2.04 Calculation of Estimated Purchase Price...................................................................26
2.05 Pre-Closing Deliveries of Financial Information...........................................................27
2.06 Post-Closing Adjustments..................................................................................27
2.07 Calculation of Closing Net Assets.........................................................................29
ARTICLE 3 CLOSING..............................................................................................33
3.01 Time and Place of Closing.................................................................................33
3.02 Deliveries by Sellers.....................................................................................34
3.03 Deliveries by Buyer.......................................................................................36
3.04 Joint Deliveries by Buyer, Sellers and/or Transferred Subsidiaries........................................36
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLERS............................................................37
4.01 Organization of Sellers...................................................................................37
4.02 Organization of the Transferred Subsidiaries..............................................................37
4.03 Authorization by Sellers..................................................................................38
4.04 Ownership of Transferred Subsidiary Equity Interests......................................................39
4.05 Options or Other Rights...................................................................................39
4.06 Organizational Documents..................................................................................40
4.07 Binding Agreements........................................................................................41
4.08 No Violation..............................................................................................41
4.09 Financial Statements......................................................................................43
4.10 Absence of Certain Changes................................................................................43
4.11 Title to Personal Property; Encumbrances; Etc.............................................................48
4.12 Real Property.............................................................................................49
4.13 Leases of Personal Property...............................................................................52
4.14 Patents, Trademarks, Trade Names, Etc.....................................................................53
4.15 Litigation................................................................................................55
4.15 Banks and Brokers, Letter of Credit and Bond..............................................................56
4.17 Employee Benefit Plans....................................................................................56
4.18 Consents and Approvals....................................................................................62
4.19 Environmental Protection..................................................................................63
4.20 Insurance.................................................................................................67
4.21 Contracts and Commitments.................................................................................68
4.22 Tax Matters...............................................................................................71
4.23 Labor Relations...........................................................................................77
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<TABLE>
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4.24 Customers and Suppliers...................................................................................78
4.25 Compliance with Law.......................................................................................78
4.26 Brokers and Finders.......................................................................................79
4.27 Product Warranties........................................................................................80
4.28 Potential Conflicts of Interest...........................................................................80
4.29 Year 2000.................................................................................................81
4.30 Availability of Assets....................................................................................82
4.31 Disclosure................................................................................................82
4.32 Representations and Warranties on the Closing Date; Disclosure............................................83
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER..............................................................83
5.01 Organization..............................................................................................84
5.02 Authorization by Buyer....................................................................................84
5.03 Binding Agreements........................................................................................84
5.04 No Violation..............................................................................................85
5.05 Litigation................................................................................................86
5.06 Consents and Approvals....................................................................................86
5.07 Brokers and Finders.......................................................................................86
ARTICLE 6 COVENANTS OF SELLERS.................................................................................87
6.01 Access Pending the Closing Date...........................................................................87
6.02 Conduct of Business Prior to the Closing..................................................................87
6.03 Termination of Benefit Accruals Under Defined Benefit Plans and Defined Contribution Plans................88
6.04 Names.....................................................................................................89
6.05 No Solicitation...........................................................................................89
6.06 Non-Competition...........................................................................................90
6.07 Collection of Receivables.................................................................................92
6.08 Transfer of Non-Filter Businesses.........................................................................92
6.09 Audited Financial Statements..............................................................................93
ARTICLE 7 COVENANTS OF BUYER...................................................................................94
7.01 Employees and Employee Benefit Plans......................................................................94
7.02 Insurance Coverage........................................................................................98
7.03 Letters of Credit, Performance Bonds, etc.................................................................99
ARTICLE 8 ADDITIONAL COVENANTS OF BUYER AND SELLER............................................................100
8.01 Consents and Conditions..................................................................................100
8.02 Filings..................................................................................................101
8.03 Access After the Closing Date............................................................................101
8.04 Record Retention.........................................................................................102
8.05 Tax Matter Covenants.....................................................................................103
8.06 Tax Allocation...........................................................................................120
8.07 Confidentiality..........................................................................................121
8.08 Cooperation Regarding Defined Benefit Plan Administration................................................123
8.09 Disposition of 401(k) Plan Assets........................................................................123
8.10 Public Announcements.....................................................................................124
8.11 Employee Bonuses Due on Sale.............................................................................124
8.12 Transfer Taxes and Expenses..............................................................................124
</TABLE>
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<TABLE>
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8.13 Title Insurance; Surveys.................................................................................125
8.14 Post-Closing Environmental Remediation...................................................................125
8.15 Post-Closing Cooperation.................................................................................127
ARTICLE 9 CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS...................................................127
9.01 Representations and Covenants............................................................................127
9.02 Government Consents; Filings.............................................................................128
9.03 Third Party Consents.....................................................................................128
9.04 Bonds or Letters of Credit...............................................................................129
9.05 Litigation...............................................................................................129
9.06 Facet License Agreement..................................................................................129
9.07 Certificate of Buyer.....................................................................................129
ARTICLE 10 CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER....................................................130
10.01 Representations and Covenants............................................................................130
10.02 Government Consents; Filings.............................................................................131
10.03 Third Party Consents.....................................................................................131
10.04 Litigation...............................................................................................131
10.05 Certificate as to Authorization..........................................................................132
ARTICLE 11 SURVIVAL OF REPRESENTATIONS; INDEMNIFICATIONS......................................................132
11.01 Survival of Representations..............................................................................132
11.02 Statements as Representations............................................................................133
11.03 Indemnification by Sellers...............................................................................133
11.04 Indemnification by Buyer.................................................................................136
11.05 Conditions of Indemnification............................................................................138
11.06 Termination of Indemnification Obligations...............................................................140
11.07 Litigation Cooperation...................................................................................141
11.08 Environmental Claim......................................................................................142
11.09 Remedies Cumulative......................................................................................142
ARTICLE 12 MISCELLANEOUS PROVISIONS...........................................................................142
12.01 Termination..............................................................................................142
12.02 Amendment and Modification...............................................................................144
12.03 Waiver of Compliance.....................................................................................144
12.04 Notices..................................................................................................144
12.05 Certain Terms............................................................................................145
12.06 Assignment...............................................................................................146
12.07 Governing Law and Jurisdiction...........................................................................146
12.08 Counterparts.............................................................................................146
12.09 Headings.................................................................................................147
12.10 Entire Agreement.........................................................................................147
12.11 Third Parties............................................................................................147
12.12 Severability.............................................................................................147
</TABLE>
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SCHEDULES
1.01 Assets to be Sold
1.03(c) Letters of Credit; Performance Bonds.
1.03(d) Severance, Employment and Incentive Pay Obligations of Sellers
1.03(i) Labor Agreements of Sellers
2.03(e) Accounting Principles; Valuation Criteria
4.04(a) Ownership of Transferred Subsidiaries Equity Interests
4.08 No Violation
4.09 Income Data Accounting Principles
4.10 Absence of Changes
4.11 Title to Personal Property; Encumbrances, Etc.
4.12 Leasehold Interests
4.12(a) Real Property Addresses
4.12(b) Real Property Liens
4.12(c) Lease Defaults
4.12(d) Real Property Compliance
4.12(e) Real Property Condemnation
4.13 Personal Property Leases
4.14(a) Patents and Trademarks
4.14(b) Patent and Trademark Infringement
4.15 Litigation
4.16 Banks and Brokers
4.17(a) U.S. Employee Benefit Plans
4.17(b) Foreign Employee Benefit Plans
4.18 Consents and Approvals
4.19(a) Environmental Permits and Consents
4.19(b) Non-compliance with Environmental Permits and Consents
4.19(c) Environmental Notices
4.19(d) Environmental Litigation
4.19(e) PRP Status
4.20 Insurance
4.21(a) Contracts and Commitments
4.21(c) Contract Validity
4.21(d) Contract Defaults
4.22 Tax Matters
4.23 Labor Matters
4.24 Customers and Suppliers
4.25 Compliance with Law
4.26 Brokers and Finders
4.27 Warranties
4.28 Conflicts
4.29 Year 2000
4.30 Availability of Assets
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4.31 Disclosure
5.07 Brokers and Finders
6.08 Transfers of Non-Filter Businesses
7.03 Letters of Credit, Performance Bonds, Etc.
8.06 Tax Allocation
8.11 Employee Bonuses Due on Sale
9.03 Third Party Consents
10.03 Third Party Consents
12.05 Knowledge
EXHIBITS
Exhibit A Facet Sublicense Agreement
Exhibit B Facet License Agreement
ii
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PURCHASE AGREEMENT
This Agreement (the "Agreement") is made on this 10th day of September,
1999, by and among the following corporations:
MARK IV INDUSTRIES, INC., a Delaware corporation with offices at One
Towne Centre, 501 John James Audubon Parkway, Amherst, New York, 14228 ("Mark
IV"),
FACET HOLDING CO., INC., a Delaware corporation with offices at One
Towne Centre, 501 John James Audubon Parkway, Amherst, New York, 14228
("Facet"),
PUROLATOR PRODUCTS AIR FILTRATION COMPANY, a Delaware corporation with
offices at One Towne Centre, 501 John James Audubon Parkway, Amherst, New York,
14228 ("PPAFC"),
GEORGE W. DAHL COMPANY, INC., a Delaware corporation with offices at
One Towne Centre, 501 John James Audubon Parkway, Amherst, New York, 14228 ("G W
Dahl"), and
MANTRONICS LIMITED, a corporation organized under the laws of the
United Kingdom which has an office at Treforest Industrial Estate, Treforest,
Mid Glamorgan CF 37 5YL ("Mantronics") (Mark IV, Facet, PPAFC, G W Dahl and
Mantronics being hereinafter collectively referred to as the "Sellers" or
separately, as the case may be, as a "Seller"); and
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CLARCOR INC., a Delaware corporation with offices at 2323 Sixth Street,
Rockford, Illinois 61125 (hereinafter referred to as the "Buyer").
RECITALS:
WHEREAS, Mark IV is the owner of all of the issued and outstanding
capital stock of Facet and all the issued and outstanding equity interests
(other than minority nominee ownership interests required under the laws of
Switzerland) of Facet International, S.A., a corporation organized under the
laws of Switzerland which has an office at Rue de l'Avenir 4, 2800 Delemont,
Switzerland ("Facet S.A."); and
WHEREAS, Facet is the owner of one hundred percent (100%) of the issued
and outstanding capital stock of Mantronics and Mantronics is the owner of one
hundred percent (100%) of the issued and outstanding capital stock of Facet
Industrial U.K. Ltd., a corporation organized under the laws of the United
Kingdom which has an office at Treforest Industrial Estate, Treforest, Mid
Glamorgan CF37 5YL ("Facet UK"); and
WHEREAS, Facet is the owner of, among other things, all the issued and
outstanding capital stock of PPAFC, G W Dahl and GS Costa Mesa, Inc., a Delaware
corporation with offices at One Towne Centre, 501 John James Audubon Parkway,
Amherst, New York,
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14228 ("GS Costa Mesa"), (which in turn owns all the issued and outstanding
capital stock of FACET USA Inc., a Delaware corporation with offices at One
Towne Centre, 501 John James Audubon Parkway, Amherst, New York, 14228 ("FACET
USA")), (each of Facet, PPAFC, GS Costa Mesa, FACET USA and G W Dahl being
hereinafter referred to individually as a "U.S. Subsidiary" and collectively as
the "U.S. Subsidiaries"); and
In addition, Facet owns all the issued and outstanding equity interests
(other than minority nominee ownership interests in those jurisdictions in which
more than one shareholder is required by law) in:
Facet Industrial B.V., a corporation organized under the laws
of the Netherlands which has an office at Draaibrugweg 10, NL-1332 AD Almere -
De Vaart, Netherlands ("Facet B.V."), which in turn owns seventy percent (70%)
of the issued and outstanding equity interest in Purolator Filter GmbH, a
corporation organized under the laws of Germany which has an office at St.
Huberter Strasse 21, D-47906 Kempen, Germany ("Purolator GmbH"), with the
remaining thirty percent (30%) of such equity interest owned by Facet; and
Facet Italiana S.p.A., an Italian corporation which has an
office at Via Quarto 10, I-10042 Nichelino, Turino, Italy ("Facet Italiana"),
which in turn owns seven and three-tenths percent (7.3%) of the issued and
outstanding equity interest of
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Fact Iberica (as hereinafter defined) and eighty percent (80%) of the issued and
outstanding equity interest in Facet FCE SARL, a French corporation ("Facet
FCE"), with the remaining twenty percent (20%) of such equity interests owned by
Facet UK (as hereinafter defined); and
WHEREAS, Facet owns less than a one hundred percent (100%) equity
interest in the following corporations:
Eighty-Three and Thirty-Six Hundredths percent (83.36%) of the issued
and outstanding equity interests in Facet Iberica, S.A., a corporation organized
under the laws of Spain which has an office at Apartado, E-150080 La Coruna,
Spain ("Facet Iberica"), with the remaining Nine and Thirty-Four Hundredths
percent (9.34%) equity interest owned by Facet UK and Seven and Three-Tenths
percent (7.3%) equity interest owned by Facet Italiana, as more particularly set
forth on Schedule 4.04 (Facet S.A., Facet UK, Facet Iberica, Purolator GmbH,
Facet BV, Facet Italiana and Facet FCE being hereinafter referred to
individually as a "Foreign Subsidiary" and collectively as the "Foreign
Subsidiaries"); and
WHEREAS, Facet, through its filter products group, the U.S.
Subsidiaries and the Foreign Subsidiaries are, collectively, engaged in the
design, manufacture, marketing and distribution of a complete line of specialty
filters and filtration products primarily for residential, commercial and
industrial use in a
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wide range of market segments which include original equipment manufacturers,
aftermarket distributors, retail distributors, contractors and aerospace, marine
and military markets (hereinafter the "Filter Business"); and
WHEREAS, the Sellers desire to sell the Filter Business to the Buyer
and the Buyer desires to purchase the Filter Business from the Sellers with the
following structure all in accordance with the terms and provisions of this
Agreement:
A. Purchase by Buyer of the assets related to the Filter Business from
Facet, PPAFC and G W Dahl and the assumption by Buyer of certain
related liabilities; and
B. Purchase by Buyer of all the capital stock of Facet Iberica and
Purolator GmbH owned by Facet; and
C. Purchase by Buyer from the applicable Seller of one hundred percent
(100%) of the issued and outstanding capital stock of Facet S.A.,
GS Costa Mesa, Facet B.V., Facet UK and Facet Italiana (thereby
acquiring indirectly all of the outstanding capital stock of Facet
FCE, FACET USA, Facet Iberica and Purolator GmbH) (Facet S.A., GS
Costa Mesa, Facet BV, Facet UK, Facet Iberica, Purolator GmbH,
Facet Italiana, Facet
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FCE and FACET USA being sometimes referred to herein collectively
as the "Transferred Subsidiaries"); and
WHEREAS, prior to the Closing (as hereinafter defined) Sellers shall
take all required actions to transfer all assets and liabilities of the
Non-Filter Businesses (as such term is defined in Section 6.08) of Purolator
GmbH, Facet UK and GS Costa Mesa (other than the capital stock of FACET USA) to
Sellers or their affiliates and to declare and pay certain dividends from Facet
Iberica to its shareholders all in accordance with the provisions of Section
6.08 of this Agreement;
CONSIDERATION:
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements hereinafter set forth, the Sellers and the Buyer hereby agree as
follows:
ARTICLE 1 TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES
1.01 Assets to be Sold. Subject to the terms and conditions of this
Agreement, at the closing provided for in Section 3.01 hereof, (the "Closing" or
"Closing Date"), Sellers will sell, convey, assign, transfer and deliver to
Buyer (or to such subsidiary or affiliate of Buyer as Buyer may identify in
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writing to the Sellers not later than five (5) business days prior to the
Closing Date), and Buyer (or such subsidiary or affiliate) will purchase,
acquire and accept from Sellers, all right, title and interest of Sellers at the
time of the Closing Date, free of all liens and encumbrances except Permitted
Liens (as hereinafter defined) in and to every property and asset of the
Sellers, of every kind, nature and description, real personal or mixed, tangible
or intangible and wherever situated, which are used by Sellers primarily in the
conduct of the Filter Business except for the Excluded Assets (as hereinafter
defined) (such assets, other than the Excluded Assets, being hereinafter
referred to as the "Assets"). The Assets shall include all of the assets of the
Sellers shown or reflected on the unaudited February 28, 1999 balance sheet of
the Sellers attached hereto as Schedule 1.01 (the "February 28 Balance Sheet")
subject to changes thereafter in the ordinary course of business between the
February 28 Balance Sheet and the Closing Date (but excluding the Excluded
Assets) and shall include, without limitation, the following as the same shall
exist on the Closing Date:
(a) all right, title and interest of Mark IV in and to one hundred
percent (100%) of the issued and outstanding capital stock and other equity
interests of Facet S.A.;
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(b) all right, title and interest of Facet in and to one hundred
percent (100%) of the issued and outstanding capital stock of GS Costa Mesa;
(c) all right, title and interest of Mantronics in and to one
hundred percent (100%) of the issued and outstanding capital stock of Facet UK;
(d) all right, title and interest of Facet in and to one hundred
percent (100%) of the issued and outstanding capital stock and other equity
interests in Facet B.V. and Facet Italiana, 83.36% of the equity interests in
Facet Iberica and 30% of the equity interest in Purolator GmbH;
(e) all machinery and equipment, furniture and furnishings, tools,
molds, tooling, dies, jigs and patterns, lab equipment, supplies and
accessories, automobiles, trucks, vehicles and other tangible assets of the
Sellers, wherever located, which are used by the Sellers primarily in the
conduct of the Filter Business;
(f) all inventories of the Sellers wherever located, which have
been produced or acquired by Sellers in connection with the conduct by Sellers
of the Filter Business, including, without limitation, all finished goods, work
in progress, raw materials, spare parts, packaging and supplies;
(g) all receivables of the Sellers which are attributable to the
Filter Business including, without
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limitation, accounts receivable and insurance proceeds receivable;
(h) all office supplies, production supplies, spare parts,
advertising and promotional materials and supplies, other miscellaneous
supplies, and other tangible property of the Sellers of any kind, wherever
located, which are used by the Sellers primarily in the conduct of the Filter
Business;
(i) all leasehold interests of the Sellers in all manufacturing
facilities, distribution facilities, warehouse facilities, sales offices and all
other facilities owned or leased by Seller as are necessary for the conduct of
the Filter Business (including, without limitation, the leasehold interests
listed in Schedule 4.12) and used by the Sellers primarily in the conduct of the
Filter Business and all right, title, and interest of the Sellers in the
leasehold improvements and fixtures located therein and all appurtenances
thereto;
(j) all leasehold interests of the Sellers arising under all
leases or rental agreements covering machinery, equipment, computer hardware,
tools, supplies, furniture and fixtures, automobiles and trucks, fixed assets
and other tangible assets used by the Sellers primarily in the conduct of the
Filter Business including, without limitation, those listed on Schedule 4.13;
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(k) all of the real property owned by any of the Sellers and used
in the conduct of the Filter Business as listed on Schedule 4.12(a);
(l) all of the rights and benefits accruing to the Sellers under
all sales orders, sales contracts, supply contracts, distributor agreements,
agency agreements, employment agreements, purchase orders and purchase
commitments made by the Sellers in the conduct of the Filter Business;
(m) all operating, transportation and other licenses (including
licenses of computer software) and permits of every kind and variety issued to
or relied upon by the Sellers with respect to the Filter Business;
(n) all confidentiality agreements and, more generally, all other
agreements to which any of the Sellers is a party or by which any of the Sellers
is bound and all other claims, choses in action, causes of action, rights of
recovery, rights of set-off and other rights of every kind to the extent such
rights and benefits are primarily related to the Filter Business;
(o) all operating data and records, whether printed or electronic,
which are used by the Sellers primarily with respect to the Filter Business,
including, without limitation, customer lists, financial accounting and credit
reports, personnel files, records pertaining to suppliers, distributors,
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customers and governmental agencies, correspondence, budgets and all other
files, documents and records of or pertaining to the Filter Business;
(p) all proprietary rights and intellectual property owned by the
Sellers with respect to the Filter Business or used by the Sellers primarily in
the conduct of the Filter Business, including, but not limited to: (i) all
names, marks, slogans, caricatures, logos, sales brochures, instruction manuals
and promotional graphics used by the Sellers in the conduct of the Filter
Business including, without limitation, the right to use the name "Facet" and "G
W Dahl" and any corporate symbols or logos incorporating "Facet" or "G W Dahl";
(ii) all patents, patent applications and invention disclosures used by Sellers
primarily in the conduct of the Filter Business; (iii) all trademarks (whether
registered or unregistered)and trademark applications used by Sellers primarily
in the conduct of the Filter Business; (iv) all copyright registrations and
applications used by Sellers primarily in the conduct of the Filter Business;
(v) all technical specifications and manufacturing and process information,
trade secrets, research and development data, routing sheets, work standards,
formulae (secret or otherwise), compound formulations, inventions, shop rights,
know-how, confidential information, engineering and technical designs and
drawings, discoveries, improvements,
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production processes, operating rights; (vi) all licenses for any of the above
described intellectual property; and (vii) all other licenses and other similar
intangible property and rights of the Sellers relating to the products,
production processes or business of the Filter Business;
(q) all transferable licenses, permits and authorizations issued
or granted to Sellers by any governmental or other public agencies or
authorities or by private parties, in each case, relating to the use or
operation of the above described Assets or the conduct of the Filter Business,
including, without limitation, all rights of Facet under a certain Trademark
License Agreement dated February 26, 1999 by and between Purolator Products
Company, a subsidiary of Arvin Industries, Inc. and Facet (the "Trademark
License Agreement") and all rights of Facet under certain patent license
agreements dated February 26, 1999 by and between Purolator Products Company and
Facet (the "Purolator Patent License Agreement and the "Facet Patent License
Agreement"), provided, however, that the Trademark License Agreement and the
Purolator Patent License Agreement shall be subject to a certain sublicense of
the rights to use the trademarks and patents referred to therein to Motor
Components, LLC, whose membership interest is one hundred percent (100%) owned
by Facet in the form attached hereto as Exhibit A (the "Facet Sublicense
Agreement").
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(r) all prepaid items and deferred charges of the Sellers other
than prepaid insurance premiums and any associated insurance coverage but
including prepaid rentals, security deposits, taxes (other than prepaid income
taxes) and other unbilled charges and deposits relating to the operation of the
Filter Business; and
(s) all goodwill and going concern value of the Filter Business.
1.02 Excluded Assets. Notwithstanding anything contained in this
Agreement, the parties acknowledge that the Assets to be sold to Buyer pursuant
to Section 1.01 do not include the following assets (all of which are
hereinafter referred to as the "Excluded Assets"):
(a) all assets of every kind, nature and description, real,
personal or mixed, tangible or intangible and wherever situated owned directly
by Mark IV, excepting only all the issued and outstanding equity interests of
Mark IV in Facet S.A.;
(b) all assets of every kind, nature and description, real,
personal or mixed, tangible or intangible and wherever situated of Facet that
are not related to the Filter Business, including, without limitation, assets
which are used primarily in the business conducted by its Fitzsimons Division;
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(c) all the issued and outstanding capital stock and other equity
interest owned, directly or indirectly by Facet UK in Dayco Europe Ltd., Dayco
PTI Ltd. and Caplugs Ltd. which will be distributed to Mantronics on or before
the Closing as provided in Section 6.08;
(d) all cash and cash equivalents and short-term investments of
Facet and the U.S. Subsidiaries, including without limitation, bank accounts,
certificates of deposit and treasury bills, together with all accrued interest
thereon, except to the extent reflected on the Closing Balance Sheet (as
hereinafter defined);
(e) prepaid insurance premiums and any insurance coverage relating
thereto (except as provided in Section 7.02) together with all other policies of
insurance issued with respect to the Filter Business and its facilities;
(f) insurance proceeds receivable with respect to the Filter
Business in connection with damages suffered by destruction or theft of tangible
personal property of the Filter Business but only if such tangible personal
property has been repaired or replaced and the costs and expenses of such repair
or replacement have been paid in full prior to the Closing Date;
(g) prepaid income taxes and reserves, if any, attributable to the
Excluded Assets or Excluded Liabilities (as hereinafter defined);
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(h) refunds of Taxes, the responsibility for which is allocated to
Sellers pursuant to Sections 6.08, 8.05 and 8.12;
(i) the rights to use the name Facet and various patents and
trademarks associated with the Filter Business in connection with certain
retained businesses of Sellers conducted by Motor Components, LLC as more
specifically set forth in a certain license agreement between Buyer and Sellers
in the form attached hereto as Exhibit B (the "Facet License Agreement");
(j) any amounts that may be received or collected under the
accounts receivable collection actions initiated by any Seller or Transferred
Subsidiary as set forth on Schedule 4.15 to the extent such amounts are not
included as assets on the Closing Balance Sheet; and
(k) any assets of any of the Sellers or the Transferred
Subsidiaries which are part of or used in the Non-Filter Businesses.
1.03 Assumed Liabilities. Subject to the limitations contained in
Section 1.05 hereof, Buyer agrees to and will on the Closing Date assume and
agree to pay, discharge or perform when lawfully due, all of the following
liabilities (all of which are hereinafter collectively referred to as the
"Assumed Liabilities" or separately as an "Assumed Liability"):
(a) all liabilities and obligations of the Sellers, whether known
or unknown, absolute or contingent, accrued or
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unaccrued or otherwise, to the extent that any such liabilities and obligations
(i) arise from the conduct by Sellers or the Transferred Subsidiaries of the
Filter Business in the ordinary course prior to the Closing Date with respect to
matters set forth in subparagraphs (b) through (i) hereof (except to the extent
that any such liabilities are specifically identified in Section 1.05 below as
"Excluded Liabilities"), or (ii) are reflected in the Closing Balance Sheet;
(b) all liabilities and obligations of the Sellers which relate to
periods or events after the Closing Balance Sheet Date (as hereinafter defined)
pursuant to Leases and Personal Property Leases referred to in Sections 1.01(i)
and 1.01(j);
(c) all liabilities and obligations of the Sellers with respect to
the letters of credit or performance bonds related to the Filter Business set
forth in Schedule 1.03(c) and subject to the provisions of Section 7.03 of this
Agreement;
(d) all liabilities and obligations of Sellers (i) for payment of
any severance pay or other termination benefits arising under the terms of any
applicable laws and under the terms of any severance plan, policy or arrangement
maintained by Sellers for the benefit of employees of the Filter Business
(hereinafter referred to as the "Severance Obligations") which are described on
Schedule 1.03(d); (ii) arising under the terms
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of certain employment and severance contracts listed on Schedule 1.03(d) for
those employees of the Filter Business listed therein, except to the extent of
any stay bonus obligations for such employees arising solely from the
consummation of the transactions provided for in this Agreement; and (iii) for
payment of incentive compensation arising under the terms of the incentive
compensation plans described in Schedule 1.03(d);
(e) all liabilities and obligations arising under the terms of all
sales contracts, supply contracts, distributor agreements, agency agreements,
purchase orders, purchase commitments, sales orders, confidentiality agreements
and, more generally, all other agreements of the Sellers pertaining to the
Filter Business (except agreements or contracts relating primarily to the
Excluded Assets or Excluded Liabilities);
(f) any and all liabilities and obligations arising in connection
with warranty claims, product replacement or recall claims with respect to any
products of the Filter Business manufactured or sold prior to or after the
Closing Balance Sheet Date;
(g) any and all liabilities and obligations arising in connection
with medical, dental or disability claims and related administrative costs for
services incurred after the Closing Balance Sheet Date arising out of the Filter
Business in respect of conditions existing either prior to or after the
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Closing Balance Sheet Date, other than any liabilities and obligations for
in-patient care incurred with respect to a continuous period that commences
prior to the Closing Balance Sheet Date, but only in respect of active employees
of the Filter Business on the Closing Balance Sheet Date, in each case including
associated claims handling charges;
(h) all obligations of Facet under the Trademark License
Agreement, the Facet Sublicense Agreement, the Purolator Patent License
Agreement and the Facet Patent License Agreement; and
(i) all obligations of any Seller arising after the Closing
Balance Sheet Date under the terms of the labor agreements listed on Schedule
1.03(i) (the "Collective /Bargaining Agreements").
1.04 Disputed Assumed Liabilities. Buyer may dispute any Assumed
Liability with the third party to whom such Assumed Liability is owed, in good
faith, by appropriate proceedings. Buyer's election to dispute any Assumed
Liability shall not in any way affect the obligations of Buyer, pursuant to
Section 11.04 to indemnify Sellers and their affiliates against Damages (as
defined in Section 11.03) sustained or incurred by any of them arising out of or
relating to such Assumed Liability, including by reason of Buyer's disputing
such Assumed Liability.
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1.05 Excluded Liabilities. The Assumed Liabilities shall exclude and
Buyer shall not assume or be liable for any of the following liabilities,
contracts, commitments and other obligations of the Sellers as the same shall
exist at the Closing Date (all of which liabilities, contracts, commitments and
obligations are hereinafter referred to as the "Excluded Liabilities"):
(a) any obligations and liabilities of Sellers arising under this
Agreement;
(b) any obligations of Sellers or the Transferred Subsidiaries for
expenses incurred in connection with the sale of the Assets pursuant hereto or
other transactions contemplated hereby, including without limitation, the fees
and expenses of counsel, investment advisors and independent auditors;
(c) any liabilities or obligations of Sellers or a Transferred
Subsidiary to Mark IV or any of its subsidiaries or affiliates, except as may be
provided in any transition services agreement necessary to implement the
provisions of this Agreement;
(d) any liability or obligation of Sellers or the Transferred
Subsidiaries for borrowed money or any notes, bonds, indentures, mortgages or
other contracts or agreements representing or evidencing such indebtedness or
any guarantees thereof;
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(e) any liability of the Sellers not otherwise assumed by the
Buyer pursuant to Section 1.03 hereof arising out of any actions, inactions,
transactions by Sellers or events occurring after the Closing Date;
(f) any liability arising out of the litigation or potential
litigation described in Schedule 4.15, the defense or prosecution of which and
all liability for damages, costs, fines and remedies related thereto shall be at
the sole cost and liability of the Sellers;
(g) all governmental liabilities and obligations arising prior to
the Closing Date related to, associated with or arising out of the Sellers' or
the Transferred Subsidiaries' ownership, operation, use or control of their
respective assets and properties, whether arising under Environmental Laws or
common law principles, including, but not limited to, any action by any
governmental authority or any third party which seeks to impose or recover costs
relating to the discharge, disposal, release, threatened release or escape of
any Regulated Materials at, on or from (i) any real property now or previously
owned or operated by Sellers or the Transferred Subsidiaries, including surface
water, soil and groundwater thereon, thereunder or adjacent thereto; or (ii) any
real property at which Regulated Materials (as defined in Section 4.19)
generated by operations
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of Sellers or the Transferred Subsidiaries were sent or came to be present;
(h) any liability, obligation or commitment relating to the
Excluded Assets;
(i) claims or obligations of Sellers or Transferred Subsidiaries
with respect to workers' compensation or similar worker's protection
arrangements with respect to illness or any injury occurring on or prior to the
Closing Date;
(j) any and all liabilities and obligations arising in connection
with medical, dental or long-term disability and other claims arising and
related administrative costs in respect of retired employees of the Filter
Business on the Closing Balance Sheet Date or employees of the Filter Business
who are not actively employed by the Filter Business on the Closing Balance
Sheet Date;
(k) any obligation for Taxes the responsibility for which is
allocated to Sellers pursuant to Sections 6.08, 8.05 and 8.12;
(l) any liability or obligation of any of the Sellers or the
Transferred Subsidiaries arising in connection with any Non-ERISA Plan,
Compensation Commitment or Plan (each as defined in Section 4.17) (except for
the Severance Obligations, the employee contract obligations and incentive
compensation obligations described in Schedule 1.03(d)); and
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(m) any liability or obligation of any of the Sellers or any of
the Transferred Subsidiaries (arising under any law, incorporation document or
by-law) to indemnify or hold harmless any present or former director, officer or
employee of any of the Sellers or Transferred Subsidiaries in respect of
breaches or alleged breaches of any duty owed by such director, officer or
employee to any Seller or Transferred Subsidiary or any shareholder thereof.
ARTICLE 2 PURCHASE PRICE
2.01 Purchase Price. The aggregate purchase price to be paid by the
Buyer to the Sellers for the Assets shall be equal to One Hundred Thirty Six
Million Two Hundred Fifty Thousand Dollars ($136,250,000) (the "Initial Purchase
Price"), adjusted as described in this Article 2. For purposes of determining
the amount which is payable by the Buyer to the Sellers at the Closing, the
Initial Purchase Price shall be adjusted in the manner provided for in Section
2.04 hereof (the Initial Purchase Price, as adjusted pursuant to Section 2.04
hereof, being hereinafter referred to as the "Estimated Purchase Price"). The
Estimated Purchase Price shall be adjusted in the manner provided by Section
2.06 hereof for purposes of determining the amount, if any, which is payable by
Buyer to Sellers or by Sellers to Buyer after the determination of the amount of
the
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Closing Net Assets (as hereinafter defined) is made (the Estimated Purchase
Price as adjusted pursuant to Section 2.06 hereof being hereinafter referred to
as the "Final Purchase Price").
2.02 Payment of Purchase Price. At the Closing, the Buyer shall pay or
cause to be paid the Estimated Purchase Price (determined by adjusting the
Initial Purchase Price in the manner provided for by Section 2.04 hereof) to the
Sellers by wire transfer of immediately available funds to such account or
accounts as are specified by Mark IV in writing not less than three (3) business
days prior to the Closing Date. Any adjustments to the Estimated Purchase Price
provided for by Section 2.06 to reflect the Final Purchase Price shall be paid
by the Buyer to the Sellers or by the Sellers to the Buyer (as the case may be)
as provided for in Section 2.06 hereof.
2.03 Definitions Relating to Purchase Price Adjustments. For purposes
of calculating the adjustments to the Initial Purchase Price and the adjustments
to the Estimated Purchase Price provided for by this Article 2 and for purposes
of this Agreement, the following terms shall have the following meanings:
(a) Closing Balance Sheet means an unaudited statement as of
August 31, 1999 (the "Closing Balance Sheet Date") prepared in the manner
described on Schedule 2.03(e) and
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Section 2.07 hereof, by Mark IV, delivered to Buyer in accordance with the
provisions of 2.07 hereof and containing a written statement, in balance sheet
format, of the Closing Net Assets, accompanied by a certification by the Chief
Financial Officer of Mark IV that the Closing Balance Sheet presents fairly, in
all material respects, the Net Assets of the Filter Business as of the Closing
Balance Sheet Date on the basis of the accounting principles described in
Schedule 2.03(e) of this Agreement;
(b) Closing Net Assets means, subject to Section 2.07 hereof, the
Net Assets of the Filter Business determined, as of the Closing Balance Sheet
Date, according to the principles set forth in Schedule 2.03(e) hereof and shall
include any cash on hand as of the Closing Balance Sheet Date;
(c) Closing Net Cash Balance means a statement as of the Closing
Date prepared in accordance with the provisions of Section 2.03(e) and 2.07
hereof, accompanied by a certification by the Chief Financial Officer of Mark IV
that the Closing Net Cash Balance presents fairly, in all material respects, the
Net Cash Balance with respect to the Filter Business for the period beginning
September 1, 1999 through the Closing Date;
(d) Estimated Balance Sheet means an unaudited statement as of the
Closing Balance Sheet Date, prepared by Mark IV and delivered to Buyer prior to
the Closing Date, and
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containing a written statement, in balance sheet format, of Estimated Net
Assets;
(e) Estimated Net Assets means the Net Assets of the Filter
Business determined according to the principles set forth in Schedule 2.03(e)
hereof, as of the Closing Balance Sheet Date and set forth in the Estimated
Balance Sheet;
(f) Estimated Net Cash Balance means the Net Cash Balance with
respect to the Filter Business determined as provided in Section 2.03(h) for the
period beginning September 1, 1999 through the Closing Date;
(g) Net Assets means the aggregate net assets of the Filter
Business calculated, as of a specified date, in accordance with generally
accepted accounting principles consistent with past practice; provided, however,
that notwithstanding anything to the contrary contained herein, for purposes of
determining the amount of the Net Assets as of any specified date, the
accounting principles and valuation criteria set forth in Schedule 2.03(e) shall
be utilized for purposes of determining the amounts of the asset and liability
categories set forth in such Schedule;
(h) Net Cash Balance means the difference between the aggregate
amount of loans, advances or other disbursements of cash or cash equivalents,
directly or indirectly made with respect to the Filter Business by Mark IV for
the period
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beginning September 1, 1999 though the Closing Date and the aggregate amount of
the repayments, withdrawals, dividends, loans advances or other disbursements of
cash made, directly or indirectly, to Mark IV with respect to the Filter
Business for the period beginning September 1, 1999 through the Closing Date.
and
(i) Preliminary Net Assets means an amount equal to One Hundred
Fifty Three Million Eight Hundred Thousand Dollars ($153,800,000).
2.04 Calculation of Estimated Purchase Price. The Estimated Purchase
Price shall be calculated as of the Closing Date by adjusting the amount of the
Initial Purchase Price as follows:
(a) if the Estimated Net Assets is: (i) greater than the
Preliminary Net Assets, the Initial Purchase Price shall be increased, on a
dollar-for-dollar basis, by the amount of any such excess; or (ii) less than
Preliminary Net Assets, the Initial Purchase Price shall be reduced, on a
dollar-for-dollar basis, by the amount of such difference; and
(b) if the Estimated Net Cash Balance is: (i) a positive number,
the Initial Purchase Price shall be increased, on a dollar-for-dollar basis, by
the amount of the Estimated Net Cash Balance; or (ii) a negative number, the
Initial Purchase
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Price shall be decreased, on a dollar-for-dollar basis, by the amount of the
Estimated Net Cash Balance.
2.05 Pre-Closing Deliveries of Financial Information. Mark IV shall
provide Buyer a copy of the Estimated Balance Sheet prior to the Closing. In
addition, beginning September 1, 1999, Mark IV shall provide to Buyer, on a
daily basis, a written statement of the Estimated Net Cash Balance. Mark IV
shall also, promptly following a request from Buyer, provide to Buyer copies of
such additional documents as may reasonably be requested by Buyer for the
purpose of verifying the amount of the Estimated Net Assets as contained in the
Estimated Balance Sheet which is delivered to the Buyer or for the purpose of
verifying the statements of the Net Cash Balance which are provided to the
Buyer.
2.06 Post-Closing Adjustments.
(a) The Final Purchase Price shall be based upon adjustments to
the Estimated Purchase Price as set forth below. If the Closing Net Assets, (as
determined as provided in Section 2.07) plus or minus the Closing Net Cash
Balance (determined as provided in Section 2.07): (i) exceeds the Estimated Net
Assets plus or minus the Estimated Net Cash Balance (the "Closing Excess"), then
the Final Purchase Price shall be equal to: (A) the Estimated Purchase Price
plus (B) the Closing Excess; or (ii) is less than the Estimated Net Assets plus
or minus the
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Estimated Net Cash Balance (the "Closing Deficiency"), then the Final Purchase
Price shall be equal to: (A) the Estimated Purchase Price minus (B) the Closing
Deficiency.
(b) If the Final Purchase Price as calculated pursuant to the
provisions of Section 2.06(a) above exceeds the Estimated Purchase Price, the
amount by which the Final Purchase Price exceeds the Estimated Purchase Price
shall be paid by Buyer to the Sellers. If the Final Purchase Price as calculated
pursuant to Section 2.06(a) above is less than the Estimated Purchase Price, the
amount by which the Estimated Purchase Price exceeds the Final Purchase Price
shall be paid by the Sellers to the Buyer.
(c) All payments required to be made pursuant to Section 2.06(b)
above shall be paid to the party entitled to receive the same in cash or
immediately available U.S. funds promptly, but in no event later than ten (10)
business days following the determination of the Closing Net Assets as
contemplated in Section 2.07 below, by delivery to such account as the party
entitled to payment shall specify in writing, of an amount equal to the sum of
any such payment together with interest thereon from, and including the Closing
Date to, but excluding, the date of such payment at a variable rate per annum
equal to the rate announced publicly by Bank of America National Trust and
Savings Association from time to time as its "base
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rate". The date on which such payment shall occur is referred to herein as the
"Supplemental Closing".
2.07 Calculation of Closing Net Assets and Closing Net Cash Balance.
(a) As soon as practicable, but in no event later than ninety (90)
days following the Closing Date, Mark IV shall prepare and deliver to Buyer a
proposed unaudited balance sheet containing a statement of the Closing Net
Assets and Closing Net Cash Balance, determined according to the principles set
forth in this Agreement (hereinafter the "Proposed Closing Balance Sheet" and
the "Proposed Closing Net Cash Balance").
(b) The Proposed Closing Balance Sheet and the Proposed Closing
Net Cash Balance shall be subject to verification and examination by Buyer and,
in order to facilitate such verification and examination, Mark IV shall, at such
reasonable times and places as may be requested by Buyer, deliver copies of all
supporting documents to Buyer and its representatives and provide to Buyer and
its representatives the right to examine or take copies of any work papers used
by Mark IV in the preparation of the Proposed Closing Balance Sheet and the
Proposed Closing Net Cash Balance.
(c) Buyer shall have a period of forty five (45) days after
delivery of the Proposed Closing Balance Sheet and the Proposed Closing Net Cash
Balance to Buyer to object to the
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Proposed Closing Balance Sheet and the Proposed Closing Net Cash Balance in
accordance with Section 2.07(d). If no objections are raised within such forty
five (45) day period, the Proposed Closing Balance Sheet and the Proposed
Closing Net Cash Balance shall be deemed to be accepted and approved by Buyer,
the Closing Net Assets as contained in the Proposed Closing Balance Sheet and
the Proposed Closing Net Cash Balance shall be deemed to be the Closing Net
Assets and the Closing Net Cash Balance and any amounts required to be paid by
Section 2.06(a) hereof shall be paid by Sellers or Buyer, as the case may be, at
a Supplemental Closing held at the same place as is provided in Section 3.01
hereof, ten (10) business days following the expiration of such forty-five (45)
day period, or at such other place and at such other time and date as may be
mutually agreed upon in writing by Buyer and Mark IV.
(d) If Buyer shall disagree as to the accuracy of the Closing Net
Assets or the Closing Net Cash Balance as contained in the Proposed Closing
Balance Sheet and the Proposed Closing Net Cash Balance, Buyer shall present a
written notice of such disagreement to Mark IV within the forty five (45) day
period described in Section 2.07(c) specifying such disagreement. Following
receipt of such notice by Mark IV, Buyer and Mark IV shall use their best
efforts to promptly resolve the matter or matters in disagreement. If Mark IV
and Buyer resolve the
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matter or matters in disagreement, Mark IV and Buyer shall either confirm or
revise the original Proposed Closing Balance Sheet and the Closing Net Assets
and/or the Proposed Closing Net Cash Balance, whereupon the statement of the
Closing Net Assets and the Closing Net Cash Balance of the Filter Business as
contained in the confirmed or revised Proposed Closing Balance Sheet and
Proposed Closing Net Cash Balance, shall be deemed to be final and binding upon
the parties hereto and any amounts required to be paid by Section 2.06(a) hereof
shall be paid by Sellers or Buyer, as the case may be, at a Supplemental Closing
held at the same place as is provided in Section 3.01 hereof, ten (10) business
days following the date Buyer and Mark IV resolve their disagreement with
respect to the Proposed Closing Balance Sheet or the Proposed Closing Net Cash
Balance or at such other place and at such other time and date as may be
mutually agreed upon in writing by Buyer and Mark IV.
(e) If Mark IV and Buyer are unable to resolve the matter or
matters in disagreement within ninety (90) days following Mark IV's receipt of
written notice from Buyer of Buyer's disagreement with the accuracy of the
Closing Net Assets or the Proposed Closing Balance Sheet or the Proposed Closing
Net Cash Balance, then the Buyer and Mark IV shall select a mutually acceptable,
neutral, independent accounting firm (the "Arbitrator"), and submit such
disputes to arbitration. The
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Arbitrator shall decide all points in dispute according to the principles set
forth in Section 2.03 above and provide written notice of its decision (which
need not assert the basis therefor) within thirty (30) days of its appointment,
and its determinations shall be final, conclusive and binding on Buyer and
Sellers with respect to the final determination of the Closing Net Assets and
the Closing Net Cash Balance. The fees and expenses of the Arbitrator shall be
shared equally by Buyer and Sellers.
(f) Notwithstanding anything to the contrary contained in this
Section 2.07, during the period that the determination of the Closing Net Assets
or the Closing Net Cash Balance shall remain in dispute, neither party shall be
required to pay to the other party the amount that would otherwise be payable
hereunder if no such disagreement were to exist, provided, however, that in the
event a net amount in excess of any amount in dispute hereunder shall be due
from one party to the other, such net amount shall be payable pursuant to this
Section as if no such disagreement were to exist.
(g) During and with respect to the audit and reviews referred to
in this Section 2.07, Sellers and Buyer shall: (i) fully cooperate with all
reasonable requests of Mark IV or Buyer as the case may be; and (ii) upon
reasonable request make available to Mark IV or Buyer, as the case may be, all
work
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papers (excluding proprietary programs and information of Sellers and Buyer),
supporting schedules, documents and other information (including access to all
appropriate knowledgeable personnel of Sellers) upon which the Closing Balance
Sheet is prepared and the Closing Net Assets and the Closing Net Cash Balance is
determined.
(h) All fees and expenses of Sellers relating to the matters
described in this Section 2.07 shall be borne by Sellers, and all fees and
expenses of the Buyer relating to the matters described in this Section 2.07
shall be borne by Buyer.
ARTICLE 3 CLOSING
3.01 Time and Place of Closing. Unless this Agreement has been
terminated pursuant to the provisions of Section 12.01, the closing of the sale
and purchase of the Assets as contemplated by this Agreement (the "Closing")
shall take place at the offices of Lippes, Silverstein, Mathias & Wexler LLP,
700 Guaranty Building, 28 Church Street, Buffalo, New York, on the date hereof
or at such other place, date and time as Mark IV and the Buyer may agree. For
purposes of this Agreement, the date on which the Closing occurs is referred to
as the "Closing Date". Sellers and Buyer agree that for the purposes of
financial reporting and accounting (but not for Income Taxes),
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the transactions contemplated in this Agreement shall be deemed to have occurred
on August 31, 1999.
3.02 Deliveries by Sellers. At the Closing, Sellers will deliver to
Buyer (unless previously delivered):
(a) duly executed deeds (with transfer or documentary stamps
attached thereto or submitted therewith), warranty bills of sale, endorsements,
assignments, powers of attorney and other instruments, in such form as in each
case is reasonably satisfactory to the parties hereto and their legal counsel
and as shall be sufficient to vest in Buyer all of Sellers' right, title and
interest in the Assets, without representation, warranty or recourse except as
provided in this Agreement;
(b) duly executed assignment and assumption agreements providing
for the assignment of the Assumed Liabilities by the Sellers to the Buyer and
for the assumption of the Assumed Liabilities by Buyer (such agreements being
hereinafter the "Assignment and Assumption Agreements");
(c) with respect to each Lease, a lessor consent and estoppel
certificate duly executed and delivered by the lessor under each such Lease,
substantially in form and substance acceptable to the parties hereto and their
legal counsel;
(d) to the extent applicable, a completed FIRPTA affidavit
substantially in form and substance acceptable to the parties hereto and their
legal counsel, executed by each Seller
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with respect to each parcel of owned Real Property, in favor of Buyer;
(e) such other documents and instruments as are set forth in the
Deed and Money Escrow Instructions/New York Style Closing Escrow Instructions,
and as are reasonably required to effectuate the Closing contemplated under this
Agreement, including, without limitation, any and all ALTA Statements, GAP
Undertakings, 1099 Solicitations, affidavits and any such other title clearance
documentation.
(f) stock certificates and duly executed stock powers or
equivalent documents under the laws of the applicable jurisdiction providing for
the transfer of ownership of all the issued and outstanding stock of each of the
Transferred Subsidiaries to Buyer or its nominee;
(g) corporate minute books and stock ledgers, or the equivalent
for each Transferred Subsidiary;
(h) the written resignations of the officers and directors of each
of the Transferred Subsidiaries;
(i) the documentation identified in Article 10 hereof which is
required to be delivered to Buyer in satisfaction of the conditions to the
Buyer's obligation to close the transactions contemplated by this Agreement and
any other documentation reasonably requested by Buyer; and
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(j) the duly executed Facet License Agreement and a duly executed
agreement providing for the assignment and assumption of the Facet Sublicense
Agreement by Buyer.
3.03 Deliveries by Buyer. At the Closing, Buyer will deliver, or cause
to be delivered, to Sellers (unless previously delivered):
(a) an amount equal to the Estimated Purchase Price, by wire
transfer of immediately available funds to such account or accounts as may be
designated by Mark IV in writing not less than three (3) business days prior to
the Closing Date;
(b) duly executed Assignment and Assumption Agreements;
(c) the documentation identified in Article 9 hereof which is
required to be delivered to Sellers in satisfaction of the conditions to the
obligation of Sellers to close the transactions contemplated by this Agreement
and any other documentation reasonably requested by Mark IV; and
(d) a duly executed Facet License Agreement and a duly executed
agreement providing for the assignment and assumption of the Facet Sublicense
Agreement by Buyer.
3.04 Joint Deliveries by Buyer, Sellers and/or Transferred
Subsidiaries. At Closing, each party shall deliver to the other party the
following documents in form and substance reasonably satisfactory to the other
party:
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(a) with respect to each parcel of owned Real Property being
transferred, Sellers shall prepare, and each party shall execute and deliver to
the other party, real estate transfer and transaction tax declarations for each
state, county and municipality (if and as required in each jurisdiction); and
(b) Deed and Money Escrow Instructions/New York Style Escrow
Instructions.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLERS
Each of the Sellers hereby, jointly and severally, represents and
warrants to Buyer as follows:
4.01 Organization of Sellers. Each of the Sellers is a corporation,
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power and authority to
carry on its business as presently conducted. Each of the Sellers is qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the failure of such Seller to be so qualified would have a
Material Adverse Effect (as hereinafter defined).
4.02 Organization of the Transferred Subsidiaries. Each of the
Transferred Subsidiaries is a corporation, duly incorporated and validly
existing under the laws of the jurisdiction in which it was incorporated and has
the corporate
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power and authority to carry on its business as presently conducted. Each of GS
Costa Mesa and FACET USA is qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the failure of such
Transferred Subsidiary to be so qualified would have a Material Adverse Effect.
4.03 Authorization by Sellers. Each of the Sellers has full corporate
power and authority to enter into, execute and deliver this Agreement and each
of the other documents and instruments to be executed and delivered by each of
such Sellers pursuant to this Agreement and to carry into effect the
transactions contemplated hereunder and thereunder. The execution, delivery and
performance of this Agreement and each of the other documents and instruments to
be executed and delivered by each of the Sellers pursuant to this Agreement and
the consummation of the transactions contemplated hereunder and thereunder have
been duly authorized by all necessary corporate action on the part of each such
Seller and its shareholders. No other corporate act or proceeding on the part of
the Sellers or any shareholders of any of the Sellers is necessary to authorize
the execution and delivery of this Agreement and each of the other documents and
instruments to be executed and delivered by each of the Sellers pursuant to this
Agreement, or the
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consummation by each of the Sellers of the transactions contemplated hereby and
thereby.
4.04 Ownership of Transferred Subsidiary Equity Interests.
(a) Schedule 4.04(a) attached hereto contains a statement of: (i)
the total number, class and par value of each class of capital stock which each
Transferred Subsidiary is authorized to issue; and (ii) the total number, class
and par value of each class of capital stock of each Transferred Subsidiary
which is issued and outstanding together with the identity of the owner (or
owners) of all the issued and outstanding shares of each class of capital stock
of each such Transferred Subsidiary;
(b) Except as otherwise set forth in Schedule 4.04(a) attached
hereto, each person or entity listed in Schedule 4.04(a) as owning any issued
and outstanding capital stock of any Transferred Subsidiary is the owner of and
has good and marketable title to such issued and outstanding capital stock of
each of the Transferred Subsidiaries as set forth on Schedule 4.04(a), free and
clear of all liens, claims, encumbrances or other restrictions or limitations of
any kind or nature.
4.05 Options or Other Rights. There is no existing subscription,
option, warrant, call, commitment or other agreement entitling any third party
to and there are no convertible or exchangeable securities of any of the Sellers
or
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any of the Transferred Subsidiaries outstanding which, upon conversion or
exchange would require the issuance of: (a) any additional shares of capital
stock or other equity interests in or indebtedness of any of the Transferred
Subsidiaries; or (b) any other securities convertible into or exchangeable for
shares of capital stock or other equity interests in any of the Transferred
Subsidiaries. None of the Transferred Subsidiaries is a party to any agreement
which would require such Transferred Subsidiary to repurchase, redeem or
otherwise acquire any of the issued and outstanding shares of capital stock or
other equity interests of such Transferred Subsidiary. None of the shares of the
Transferred Subsidiaries is subject to any first refusal, repurchase or similar
right.
4.06 Organizational Documents. With respect to each Transferred
Subsidiary, Mark IV has heretofore delivered or made available to the Buyer true
and complete copies of the Certificate of Incorporation (or any other
substantially equivalent documentation which has been filed, in connection with
the organization of any such Transferred Subsidiary, with the governmental
authorities of the jurisdiction in which any such Transferred Subsidiary has
been incorporated or organized) (such Certificate of Incorporation or
substantially equivalent documentation being referred to herein as
"Incorporation Documents") and the By-Laws (or any other substantially
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equivalent documentation regulating the internal affairs of such Transferred
Subsidiary) (such By-Laws or substantially equivalent documentation being
referred to herein as the "By-Laws"). At Closing, Sellers will deliver to Buyer
the original minute books of each Transferred Subsidiary, which shall contain
all formal proceedings of the shareholders and directors of each such entity.
4.07 Binding Agreements. This Agreement constitutes and, when
executed and delivered on the Closing Date, each of the other documents to be
executed and delivered by Sellers to Buyer pursuant to this Agreement will
constitute, valid and binding obligations of each of the Sellers, enforceable
against each Seller in accordance with their respective terms, except that: (a)
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting the
enforcement of creditor's rights; and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
4.08 No Violation. Except as set forth in Schedule 4.08 attached
hereto, neither the execution and delivery of this Agreement nor the
consummation by any of the Sellers of the transactions contemplated hereby will:
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(a) violate any statute or law, or any rule or regulation of any
governmental authority; or
(b) violate any order, writ, injunction or decree of any court or
governmental agency which is applicable to any of the Sellers, the Transferred
Subsidiaries or the Assets; or
(c) violate or conflict with or constitute a default under (or an
event which, with notice or lapse of time, or both, would constitute a default
under), or will result in the termination of, or accelerate the performance
required by, or result in the creation of any lien, security interest, charge or
encumbrance upon or trigger any first refusal, repurchase or similar right with
respect to any of the Assets under any term or provision of: (i) the certificate
of incorporation and by-laws of each of the Sellers; (ii) the Incorporation
Documents and the By-Laws of any of the Transferred Subsidiaries; or (iii) any
lease, contract, commitment, license, permit, authorization, understanding,
arrangement, agreement or restriction of any kind or character: (A) to which any
of the Sellers or any of the Transferred Subsidiaries is a party or may be
bound; (B) to which the Assets may be subject, and (C) which, by its terms,
cannot be terminated on less than ninety (90) days written notice without
penalty or premium, except to the extent that the existence of any violation
described in Sections 4.08(a), (b), or (c), above and the existence of any
conflict, default,
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termination, acceleration of performance or creation of any lien, security
interest, charge or encumbrance as described in Section 4.08(c), above would not
have a Material Adverse Effect.
4.09 Financial Statements. Mark IV has heretofore delivered to
Buyer the unaudited February 28 Balance Sheet and Consolidated Income Statement
Data for the three (3) fiscal years ending on February 28, 1999 (the "Income
Data"). The February 28 Balance Sheet has been prepared in accordance with
accounting principles consistent with past practice and the accounting
principles set forth on Schedule 2.03(e) and fairly presents the assets and
liabilities and financial condition of the Filter Business as of February 28,
1999. The February 28 Balance Sheet does not reflect any Excluded Assets or
Excluded Liabilities. The Income Data has been prepared in accordance with the
accounting principles set forth on Schedule 2.03(e) and Schedule 4.09 consistent
with past practice and fairly presents the results of operations of the Filter
Business in all material respects for the periods presented.
4.10 Absence of Certain Changes. Except for the pre-closing
transfer of assets as more particularly described in Section 6.08 hereof and
except as and to the extent set forth in Schedule 4.10 attached hereto, from
February 28, 1999 through the date hereof and through the Closing Date the
operations of the Filter Business have been conducted in the ordinary course
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consistent with past practice and none of the Transferred Subsidiaries
has or will have:
(a) amended its certificate of incorporation or by-laws or, if
applicable, its Incorporation Documents or its By-Laws; or
(b) merged with or into or consolidated with any other person,
firm, corporation or other entity; or
(c) subdivided or reclassified any shares of its capital stock; or
(d) issued, sold, purchased or redeemed or issued options or
rights to subscribe to, or entered into any contracts or commitments to issue,
sell, purchase or redeem any shares of its capital stock or other equity
interests or any securities convertible into or exchangeable for any of its
shares of capital stock or other equity interests;
(e) declared or paid any dividends or declared or made any
distributions of any kind (other than cash distributions) to its stockholders or
other owners of any of its outstanding equity interests or made any direct or
indirect redemption, retirement, purchase or other acquisition of any shares of
its capital stock or other equity interests or acquired any equity securities or
options or rights to acquire equity securities of any person except for cash
receipts remitted to Mark IV in connection with the ordinary cash
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management practices of Mark IV and any such transactions which may be engaged
in by Mark IV with respect to the issued and outstanding stock of Mark IV, none
of which transactions will adversely affect the Buyer's ownership of the Assets,
or, directly or indirectly, of all the issued and outstanding stock and other
equity interests of the Transferred Subsidiaries or the ability of any Seller to
perform its obligations under this Agreement;
and, except as set forth on Schedule 4.10, none of the Sellers nor any of the
Transferred Subsidiaries has or will have:
(f) incurred any indebtedness for borrowed money (except for
borrowings from Mark IV in the ordinary course of business and pursuant to Mark
IV's ordinary cash management policies) or created or suffered to be created any
liens, mortgages or encumbrances on any of the Assets other than Permitted
Liens;
(g) terminated or permitted to lapse any governmental consent,
approval or license used in connection with the Filter Business, the absence of
which would have a Material Adverse Effect;
(h) entered into any material agreement for the sale of filter
products, the purchase of inventory or supplies or in
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respect to the distribution of filter products which is not terminable by the
Buyer after the Closing Date on not more than 90 days notice without penalty,
except ordinary course agreements entered into prior to the date of this
Agreement and those agreements between the date hereof and the Closing Date that
have been approved in writing by Buyer;
(i) entered into or amended any written employment agreement with
any employee of the Filter Business; entered into or amended any agreement with
any labor union or association representing any employee of the Filter Business
or entered into or amended in any material respect (except as contemplated by
this Agreement), any employee benefit plan or arrangement relating to any
employees of any of the Filter Business;
(j) suffered any adverse change in its financial condition,
assets, liabilities or business other than changes which arise as a result of
changes in the economy in general and changes which individually and in the
aggregate do not have a Material Adverse Effect;
(k) sold, transferred or otherwise disposed of any Assets,
properties, or rights of the Filter Business other than in the ordinary course
of the conduct of its business or canceled any claims which are material to the
Filter Business;
(l) disposed of or permitted to lapse any patent, patent
application, trademark, trademark registration, trademark
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application, assumed name, service mark, trade name or copyright application,
copyright registration or license which is used in the Filter Business (all of
the foregoing being sometimes hereinafter referred to as "Intellectual Property
Rights"), or permitted to lapse or is in breach of (or with notice, lapse of
time or both will be in breach of or permit to lapse) any agreement under which
it has any right or license to use any Intellectual Property Rights other than
any of the foregoing which would not have a Material Adverse Effect;
(m) made any single capital expenditure with respect to the Filter
Business in excess of Twenty Five Thousand Dollars ($25,000.00) or made any
commitment to make capital expenditures with respect to the Filter Business in
excess of Twenty Five Thousand Dollars ($25,000.00), except for commitments to
make such capital expenditures which have been made in the ordinary course of
the business;
(n) made any material change in any method of accounting or
accounting practice or policy or in its manner of keeping its books, accounts or
records with respect to the Filter Business;
(o) made any material changes in the product warranty or return
policies of the Filter Business;
(p) granted any general increase in the compensation or benefits
of any of its officers or employees with respect to
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the Filter Business other than in the ordinary course of business, (including
any such increase pursuant to any bonus, pension, profit sharing, severance,
medical and welfare or other plan or commitment);
(q) made any loan or advance to any of its officers, directors or
employees with respect to the Filter Business other than advances of expenses
made in the ordinary course of its business;
(r) sold or contracted to sell all or any portion of the Real
Property; or
(s) agreed, whether in writing or otherwise, to take any of the
actions set forth in this Section 4.10.
4.11 Title to Personal Property; Encumbrances; Etc. Except as set forth
in Schedule 4.11 attached hereto, each of the Sellers has good and valid title
to the personal property which it uses in connection with the conduct of the
Filter Business and purports to own and, on the Closing Date, will have good and
valid title to the personal property which it uses in connection with the
conduct of the Filter Business and purports to own in each case, free and clear
of any liens, charges or encumbrances other than Permitted Liens (as hereinafter
defined). Except as set forth in Schedule 4.11 attached hereto, each of the
Transferred Subsidiaries has good and valid title to the personal property which
it purports to own and, on the
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Closing Date, will have good and valid title to the personal property which it
purports to own in each case, free and clear of any liens, charges or
encumbrances other than Permitted Liens.
4.12 Real Property.
(a) Schedule 4.12(a) hereto contains a list of the common street
address of each parcel of real property owned, used or held for use by the
Sellers and the Transferred Subsidiaries in the conduct of the Filter Business
(hereinafter the "Real Property") and includes a statement of: (i) whether such
Real Property is owned or leased; (ii) in the case of any Real Property which is
owned by any of the Sellers or any of the Transferred Subsidiaries, the identity
of the record title owner of such Real Property; and (iii) in the case of any
Real Property which is leased by any of the Sellers or any of the Transferred
Subsidiaries from any third party, the identity of the lessee and the lessor of
such Real Property.
(b) Each of the Sellers and each of the Transferred Subsidiaries
that is identified in Schedule 4.12(a) as the owner of any Real Property has or
will have at the Closing Date good, marketable and insurable record title to the
Real Property, which such Seller or such Transferred Subsidiary is identified as
the owner of, free and clear of all liens, adverse claims, charges, covenants,
conditions, restrictions and other
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encumbrances (collectively "Liens"), except: (i) certain Liens disclosed on
Schedule 4.12(b), but only such Liens as are approved in writing by Buyer upon
review by Buyer; (ii) Liens for taxes, assessments and other governmental
charges relating to the ownership of real property which are not yet due and
payable, or due but not delinquent or being contested in good faith by
appropriate proceedings; and (iii) Liens which arise by operation of law, such
as materialmen's, mechanics', carriers', workmen's and repairmen's liens and
other similar Liens; and (iv) Liens which do not materially impair or detract
from the value of any of the Real Property or other Assets (collectively,
"Permitted Liens").
(c) With respect to each parcel of Real Property which is
identified in Schedule 4.12(a) as being leased by any of the Sellers or any of
the Transferred Subsidiaries, the Seller or the Transferred Subsidiary that is
identified in Schedule 4.12(a) as the lessee of such Real Property has or will
have at the Closing Date a valid and enforceable leasehold interest in such Real
Property pursuant to a valid executed lease and, except as otherwise set forth
in Schedule 4.12(c) attached hereto, there are no defaults (or events or
conditions which, with notice, lapse of time or both would constitute a default)
by any Seller or any Transferred Subsidiary under the terms of any lease of any
Real Property or, to the knowledge of
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the Sellers and the Transferred Subsidiaries, with respect to the obligations
of the lessor of such Real Property other than any defaults which would not,
individually or in the aggregate, have a Material Adverse Effect. Prior to the
date hereof, Sellers have delivered to Buyer true, correct and complete copies
of each lease of any Real Property ("Leases") listed in Schedule 4.12(a) as
leased.
(d) Except as otherwise set forth in Schedule 4.12(d) attached
hereto, the use, occupancy and ownership (or leasing) by any of the Sellers and
any of the Transferred Subsidiaries of any buildings, structures or other
improvements located at any Real Property which is identified in Schedule
4.12(a) is in compliance with all applicable laws, including, without
limitation, any zoning ordinances or any other codes or regulations other than
any noncompliance which would not impair the ability of the Seller, the
Transferred Subsidiary, or the Buyer (as the case may be) to use such Real
Property in a manner which is consistent with past practice and which would not
have a Material Adverse Effect.
(e) Except as otherwise set forth in Schedule 4.12(e) attached
hereto, none of the Real Property is subject to any pending or, to the knowledge
of Sellers, threatened condemnation or similar proceeding by any public or
quasi-public agency or other authority which would materially impair the right
or
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ability of the Seller or the Transferred Subsidiary that (as described in
Schedule 4.12(a) attached hereto) is the owner or lessee of any such Real
Property, to use such Real Property in a manner which is consistent with past
practice.
4.13 Leases of Personal Property. Schedule 4.13 attached hereto
contains a list of each lease relating to any personal property used by any of
the Sellers and any of the Transferred Subsidiaries in the conduct of the Filter
Business which provides for annual lease payments in excess of Fifteen Thousand
Dollars ($15,000.00) whose term is in excess of one (1) year and which is not
cancelable upon thirty (30) or fewer days notice without any liability, penalty
or premium (other than nominal cancellation fee or charge) (the "Personal
Property Leases"). Prior to the date hereof, Sellers have delivered to Buyer
true and complete copies of the Personal Property Leases including all
amendments thereof and all modifications thereto. Except as set forth in
Schedule 4.13 attached hereto, no default (or event or condition which with
notice, lapse of time, or both would constitute a default) has occurred under
the terms of any of the Personal Property Leases with respect to the obligations
of any of the Sellers or any of the Transferred Subsidiaries or, to the
knowledge of Sellers, any other parties to such Personal Property Leases other
than any defaults which would not,
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individually or in the aggregate, have a Material Adverse Effect.
4.14 Patents, Trademarks, Trade Names, Etc.
(a) Schedule 4.14(a) attached hereto contains a complete list and
a general description of all patents, trademarks, service marks, trademark
registrations, mask works, mask works registrations, trade names, assumed names,
copyrights, copyright registrations and in each case applications therefore, and
license agreements (other than license agreements relating to commercial
off-the-shelf software) presently owned, held or used by the Sellers (in the
conduct by the Sellers of the Filter Business) or owned, held or used by any of
the Transferred Subsidiaries or with respect to which the Sellers (in the
conduct by the Sellers of the Filter Business) or any of the Transferred
Subsidiaries owns or holds any license (hereinafter collectively the "Patents
and Trademarks"). Except as set forth in Schedule 4.14(a), the use by the
Sellers and the Transferred Subsidiaries of the Patents and Trademarks or any
other intellectual property in the Filter Business does not violate any
provision of applicable law or infringe upon the rights of any person, firm,
corporation or other entity in any way which individually or in the aggregate
would have a Material Adverse Effect and none of the Sellers or
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the Transferred Subsidiaries has received notice of any claim of any such
violation or infringement.
(b) Except as set forth in Schedule 4.14(b) attached hereto: (i)
the Patents and Trademarks constitute all of the intellectual property rights
which are capable of being registered and which are: (A) owned by the Sellers or
the Transferred Subsidiaries; or (B) used in the Filter Business; (ii) the
entire right, title and interest in and to such Patents and Trademarks is owned
by either the Sellers or the Transferred Subsidiaries; (iii) the Patents and
Trademarks are sufficient to conduct the business and operations of the Filter
Business as presently conducted in all material respects; (iv) there are no
pending, or to the knowledge of any Seller or Transferred Subsidiary, threatened
interferences, reexaminations, oppositions or protests and neither the Sellers
nor any of the Transferred Subsidiaries knows of any basis for any such
interference; (v) there are no disputes pending or, to the knowledge of Sellers,
threatened with former or present employees of the Filter Business involving
rights to any of the Patents and Trademarks or any other intellectual property
rights used in the Filter Business by any Seller or Transferred Subsidiary; and
(vi) to the knowledge of Sellers, no person is infringing upon or has
misappropriated any of the Patents and Trademarks, or any other intellectual
property rights used by
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any Seller or Transferred Subsidiary in the conduct of the Filter Business.
Notwithstanding anything above contained to the contrary, Sellers make no
representations or warranties hereunder as to the availability to and use by
Buyer of the Purolator Marks in the Trademark License Agreement with respect to
new products or products not currently manufactured or sold in the Filter
Business.
4.15 Litigation. Except as set forth in Schedule 4.15 attached
hereto with respect to the Filter Business, there are no actions, suits or
written claims (including without limitation, product liability claims or claims
that any of the Sellers or Transferred Subsidiaries has breached or otherwise
failed to perform its obligations under any product or service warranties
described in Section 4.27 hereof) or legal, administrative, equitable or
arbitration proceedings or outstanding orders, judgments, injunctions, awards or
decrees of any court, any governmental or regulatory body or any arbitration
tribunal pending or, to the knowledge of Sellers or the Transferred
Subsidiaries, threatened against or involving any of the Sellers, any of the
Transferred Subsidiaries or any of the Assets which: (a) seek to prevent the
consummation of the transactions contemplated by this Agreement; or (b) relate
to any of the Sellers or Transferred Subsidiaries and which, if adversely
decided, would have a Material Adverse Effect.
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4.16 Banks and Brokers, Letter of Credit and Bond. Schedule 4.16
attached hereto sets forth with respect to the Filter Business the name of each
bank, trust company, securities or other broker or other financial institution:
(a) with which the Sellers have any account, lock box, safe deposit box or vault
for the exclusive purpose of providing or maintaining banking or other financial
services to any of the Sellers; (b) with which any of the Transferred
Subsidiaries has any account, lock box, safe deposit box or vault; and (c) with
which any of the Sellers or Transferred Subsidiaries has an outstanding bond or
letter of credit.
4.17 Employee Benefit Plans.
(a) U.S. Plans.
(i) Schedule 4.17(a) sets forth a list of each of the
following to which each Seller or Transferred Subsidiary is a party or
by which it is bound or pursuant to which it may be required to make
any payment at any time with respect to current employees in the Filter
Business located in the United States:
(A) other than those described in Schedule 4.17(b), each
written retirement, savings, thrift, deferred compensation,
severance, stock ownership, stock purchase, stock option,
performance, bonus, incentive,
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vacation or holiday pay, hospitalization or other medical,
disability, life or other insurance, or other welfare,
retiree welfare or benefit plan, policy, trust,
understanding or arrangement of any kind, (the "Non-ERISA
Plans"); and
(B) other than the Non-ERISA Plans and other than those
described in Schedule 4.17(b), each written agreement,
commitment, understanding, plan, policy or arrangement of
any kind with or for the benefit of any current officer,
director, employee (including, without limitation, each
employment, compensation, deferred compensation, severance,
supplemental pension, life insurance, termination or
consulting agreement or arrangement and any agreements or
arrangements associated with a change in control) (the
"Compensation Commitments").
True and complete copies of all written Non-ERISA Plans and
Compensation Commitments and of all related insurance and annuity
policies and contracts and other documents with
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respect to each Non-ERISA Plan and Compensation Commitment have been
delivered or made available to Buyer.
(ii) Schedule 4.17(a) attached hereto sets forth a list, for each
Seller or Transferred Subsidiary with respect to employees located in
the United States in the Filter Business of:
(A) each plan, fund or program constituting an "employee
welfare plan" (hereinafter the "Employee Welfare Plans")
within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), including, without limitation, basic and
supplemental life insurance, health insurance (including
medical, dental and hospitalization), accidental death and
dismemberment insurance, business travel and accident
insurance and long term disability insurance programs; and
(B) each "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA (the "Employee Pension Plans")
including, without limitation, pension, profit sharing, and
401(k) retirement plans;
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which is maintained, assumed or contributed to by any of the Sellers or
Transferred Subsidiary for the benefit of any of its current or former
employees in the Filter Business (individually and collectively, the
"Plans").
(iii) Except as otherwise set forth in Schedule 4.17(a) attached
hereto, Sellers have previously delivered to Buyer: (A) complete copies
of all plan documents which set forth the terms of each of the Plans
and where applicable, complete copies of any related trusts and
insurance or annuity contracts or policies, if any; (B) a general
description of any of the Plans with respect to which no formal plan
document has been adopted; and (C) where applicable, the most recent
Form 5500, as filed with the Internal Revenue Service ("IRS") together
with all attachments thereto, relating to the Plans.
(iv) To the knowledge of Sellers and the Transferred Subsidiaries,
each of the Plans which is intended to qualify under Section 401(a) of
the Internal Revenue Code of 1986, as amended, (the "Code") or
otherwise conform to the requirements of the Code and ERISA is in
compliance with the applicable requirements of the Code and ERISA and,
to the knowledge of Sellers, has been administered in substantial
compliance with the applicable requirements of the Code and ERISA.
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(v) Except as set forth in Schedule 4.17(a) attached hereto, (A)
to the knowledge of Sellers, there has been no prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) with respect to any of the Plans; (B) to the knowledge of
Sellers, neither the Sellers nor any of the Transferred Subsidiaries
have incurred, directly or indirectly, any liability under Title IV of
ERISA (other than, in the case of Mark IV, liability for premium
payments to the Pension Benefit Guaranty Corporation arising in the
ordinary course for which Buyer will have no liability); (C) to the
knowledge of Sellers, no reportable event (within the meaning of
Section 4043 of ERISA) has occurred at any time during the last five
(5) years or is expected to occur with respect to any of the Plans
which are subject to Title IV of ERISA (except for plan mergers which
have occurred with respect to certain of the employee pension plans
which mergers have not had any material adverse effect on the ability
of such Plans to pay to employees in the Filter Business that are
participants in such Plans, the amount that employees in the Filter
Business have accrued under such Plans); (D) none of the Plans has
incurred an accumulated funding deficiency (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether
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or not waived, as of the most recently ended plan year of such Plan;
(E) none of the assets of the Sellers or any of the Transferred
Subsidiaries is the subject of any lien arising under Section 302(f) of
ERISA or Section 412(n) of the Code; (F) none of the Sellers and none
of the Transferred Subsidiaries have been required to post any security
under Section 307 of ERISA or Section 401(a)(29) of the Code; (G) none
of the Plans is a multi-employer plan (within the meaning of Sections
3(37) or 4001(a)(3) of ERISA) or a single employer pension plan (within
the meaning of Section 4001(a)(15) of ERISA) for which the Sellers or
any of the Transferred Subsidiaries could incur liability under
Sections 4063 or 4064 of ERISA or (H) to the knowledge of Sellers none
of the Sellers or Transferred Subsidiaries have incurred any liability
resulting from a violation of the health care requirements of Part 6 of
Title I of ERISA or Section 4980B of the Code with respect to any
current or former employees of the Filter Business.
(b) Foreign Plans. With respect to the supplementary pension plans
for employees of Facet UK and any other non-governmental foreign pension plan
maintained by the Transferred Subsidiaries or any of their affiliates,
reasonable reserves have been or will be established on the Closing Balance
Sheet in accordance with United States generally accepted accounting
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principles. The aggregate unfunded liabilities after giving effect to such
reserves for such liabilities, with respect to such plans, will not result in a
material unrecorded liability on the Closing Balance Sheet Date. Except as set
forth in Schedule 4.17(b), Sellers have previously delivered or made available
to Buyer (i) information relating to statutory employee benefits and (ii) copies
of all other written employee benefit plans and programs maintained or
contributed to in respect of any foreign employee (the "Foreign Employee Benefit
Plans") of any of the Sellers or any of the Transferred Subsidiaries. To the
knowledge of Sellers, each Foreign Employee Benefit Plan is in compliance in all
material respects with all laws, regulations and rules applicable thereto and
the respective requirements of the governing documents for such plan. There are
no actions, suits or claims (other than routine claims for benefits) pending or,
to the knowledge of Sellers, threatened against the Sellers, any Transferred
Subsidiary or any of their affiliates with respect to any Foreign Employee
Benefit Plan.
4.18 Consents and Approvals. Except for consents listed in Schedule
4.18 and 4.19(a) attached hereto, including, without limitation, any consents
that may be applicable under the laws of any foreign jurisdiction and for the
filing of pre-merger notification documentation under the HSR Act and the
expiration
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of all applicable waiting periods thereunder, no permit, consent, approval or
authorization of, or declaration, filing or registration with, any governmental
agency or authority or any other person, firm or corporation is necessary or
required to be obtained in connection with the execution and delivery by Sellers
of this Agreement or the consummation by Sellers of the transactions
contemplated hereby or the operation of the Filter Business by Buyer or its
designees on the Closing Date, except where the failure to obtain any such
permit, consent, approval or authorization or where the failure to make any such
declaration, filing or registration would not have a Material Adverse Effect.
Schedule 4.18 attached hereto also contains a list of all such consents,
approvals, authorizations, declarations, filings, or registrations ("Permits and
Consents") which, to the knowledge of Sellers, are required to be obtained by
any of the Sellers or any of the Transferred Subsidiaries from any governmental
agency or authority in connection with their conduct of the Filter Business.
4.19 Environmental Protection.
(a) Except as set forth in Schedule 4.19(a) attached hereto, each
Seller and each Transferred Subsidiary with respect to the conduct of the Filter
Business has obtained all permits, licenses and other authorizations which: (i)
are required to be obtained by any such Seller or Transferred Subsidiary under
all
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federal, state, local and foreign laws relating to human health, safety,
pollution or protection of the environment, (hereinafter referred to as
"Environmental Laws"), including, without limitation, laws relating to
emissions, discharges, releases or threatened releases into the environment
(including, without limitation, ambient air, surface water, ground water or
land) of any substances identified in any such Environmental Laws (such
substances being hereinafter referred to as "Regulated Materials"); and (ii)
relate to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of Regulated Materials, except for those
permits, licenses or other authorizations required to be obtained by any Seller
or Transferred Subsidiary under the terms of the Environmental Laws which, if
not obtained, would not have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.19(b) attached hereto, to
the knowledge of Sellers, each Seller and each Transferred Subsidiary with
respect to the conduct of the Filter Business, is in compliance with: (i) all
terms and conditions of all permits, licenses and authorizations required under
the terms of any Environmental Laws; (ii) all other limitations, restrictions,
conditions, standards, prohibitions, requirements and obligations contained in
any of the Environmental Laws as applicable to such Seller or Transferred
Subsidiary; and (iii)
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all plans, orders, decrees, judgments, injunctions, notices or demand letters
applicable to such Seller or Transferred Subsidiary and issued, entered,
promulgated or approved under any of the Environmental Laws except for failures
to comply which do not have a Material Adverse Effect.
(c) Except as set forth in Schedule 4.19(c) attached hereto,
neither Sellers nor any of the Transferred Subsidiaries has, with respect to the
Filter Business, received any written notice that any past or present
conditions, circumstances, activities, practices, incidents or actions of any
Seller or any Transferred Subsidiary relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of any
Regulated Material or relating to any emission, discharge, release or threatened
release into the environment of any Regulated Material: (i) will interfere with
or prevent compliance or continued compliance by any of the Sellers or any of
the Transferred Subsidiaries with any of the Environmental Laws or any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder; (ii) will give rise
to any common law or legal liability; or (iii) will otherwise form the basis of
any claim, action, demand, suit, proceeding, hearing, study or investigation,
unless the alleged violation or noncompliance with any Environmental Laws which
forms the basis of any notice
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described above in this Section 4.19(c), if uncured or unsettled, could not
reasonably be expected to have a Material Adverse Effect.
(d) Except as set forth in Schedule 4.19(d) attached hereto, with
respect to the Filter Business there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice or demand letter, notice of
violation, investigation or proceeding pending or, to the knowledge of Sellers,
threatened against any Seller or any Transferred Subsidiary and relating in any
way to any violation of any of the Environmental Laws or any regulation, code,
plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder.
(e) None of the Real Property, or any real property formerly owned
or operated by Sellers or any Transferred Subsidiary with respect to the Filter
Business, is listed on or, to the knowledge of Sellers, has been proposed for
listing on the National Priorities List, the CERCLIS or any similar list of
sites of suspected or known environmental contamination including the release of
any Regulated Material maintained by any governmental agency. Except as set
forth on Schedule 4.19(e), no Seller or any Transferred Subsidiary with respect
to the Filter Business has been named as a "potentially responsible party" with
respect to, or received any request or demand from
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any party concerning, its potential involvement in or at any site at which
conditions exist which may give rise to remedial action under any applicable
Environmental Laws.
4.20 Insurance. Schedule 4.20 attached hereto, to the knowledge of
Sellers, contains a general description (including the amount of
any applicable deductibles) of all policies of fire, liability, workmen's
compensation and other forms of insurance owned or held by Sellers or any
Transferred Subsidiary and issued with respect to or covering risks associated
with the assets, properties or business of the Filter Business. Except as set
forth in Schedule 4.20, all such policies are in full force and effect, all
premiums with respect thereto covering all periods up to and including the
Closing Date have been or will be paid when due, no notice of cancellation or
termination has been received with respect to any such policy. Except as set
forth in Schedule 4.20, neither Sellers nor any Transferred Subsidiary has any
reason to believe that any events have occurred which will cause any such
cancellation or any increase in premium costs with respect to such policies.
Such policies are valid, outstanding and enforceable policies, will remain in
full force and effect through the respective dates set forth in Schedule 4.20
without the payment of additional premiums and will not, with respect to all
periods up to and including the Closing Date, in any way be affected by, or
terminate or lapse
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by reason of, the transactions contemplated by this Agreement except to the
extent set forth in Schedule 4.20.
4.21 Contracts and Commitments.
(a) Except for leases required to be disclosed pursuant to
Sections 4.12 and 4.13 hereof, Plans or Foreign Benefit Plans required to be
disclosed pursuant to Section 4.17 hereof and insurance policies required to be
disclosed by Section 4.20 hereof, Schedule 4.21(a) attached hereto contains a
list of each contract, subcontract, agreement, commitment, option, note, bond,
mortgage, indenture, deed of trust, guarantee, franchise or license applicable
to the Filter Business which:
(i) (A) requires aggregate payments in excess of One Hundred
Thousand Dollars ($100,000.00); (B) contains the terms and conditions:
(I) upon which any person is employed or engaged as an officer,
employee, general manager, or consultant; or (II) upon which any
severance or other termination payments are payable; (C) provides
preferential rights to purchase any material quantity of any assets;
(D) limits the freedom of any party to engage in any business in any
geographic area; (E) contains any "change in control", provision which
would be breached by the consummation of the transactions contemplated
by this Agreement; (F) contains the terms of any guaranty of the
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payment or performance of any liabilities or obligations, the cost of
the payment or performance of which liabilities or obligations exceeds,
in the aggregate, an amount equal to One Hundred Thousand Dollars
($100,000); (G) creates any lien, claim or encumbrance on or with
respect to any Asset or any property or asset of any of the Transferred
Subsidiaries other than Permitted Liens; or (H) restricts the ability
of any Transferred Subsidiary to pay dividends or to make any other
distributions to the holders of its equity securities; and to which
(ii) any Seller or any Transferred Subsidiary is a party to
or the beneficiary of (hereinafter individually referred to as a
"Filter Business Contract" and collectively as the "Filter Business
Contracts");
(b) Prior to the date hereof Sellers have delivered or otherwise
made available to Buyer, true and complete copies of the Filter Business
Contracts including all amendments thereof and modifications thereto;
(c) Except as set forth in Schedule 4.21(c) attached hereto, to
the knowledge of Sellers, each of the Filter Business Contracts are valid,
binding and in full force and effect and enforceable in accordance with its
terms except to the extent that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
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or hereafter in effect relating to creditors rights; (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought and (iii) the inability to effect such
enforcement would not individually or in the aggregate have a Material Adverse
Effect;
(d) Except as set forth in Schedule 4.21(d) attached hereto, none
of the Sellers or Transferred Subsidiaries is in default (and no event or
condition exists which, with notice, lapse of time or both would constitute a
default) with respect to the obligations of any Seller or Transferred Subsidiary
under any of the Filter Business Contracts and, to the knowledge of Sellers,
there is no basis for any claim that any other party to any of the Filter
Business Contracts is in default with respect to its obligations under such
Filter Business Contracts, except for defaults which would individually or in
the aggregate not have a Material Adverse Effect; and
(e) To the knowledge of Sellers, all other agreements,
arrangements and understandings which any of the Sellers or Transferred
Subsidiaries is a party to are in full force and effect and are valid and
binding obligations of the applicable Transferred Subsidiary, except to the
extent that the
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failure of any such contract to be valid and binding would not individually or
in the aggregate have a Material Adverse Effect.
4.22 Tax Matters.
(a) Except as set forth in Schedule 4.22 attached hereto:
(i) each of the Sellers: (x) has filed or caused to be filed
with the appropriate governmental agencies all Tax Returns (as
hereinafter defined) required to be filed by such entity prior to the
date hereof with respect to the respective operations and assets
related to the Filter Business for all periods ending on or prior to
the date hereof, (y) has timely paid, or caused to be paid in full, all
Taxes (as hereinafter defined) due and payable with respect to such Tax
Returns (or has provided for all such Taxes in its February 28 Balance
Sheet or the Closing Balance Sheet), and (z) to the knowledge of
Sellers, with respect to any period for which Tax Returns have not yet
been filed or for which Taxes are not yet due and owing, has made due
and sufficient current accruals for such Taxes in such financial
statements. Each of the Transferred Subsidiaries: (x) has filed or
caused to be filed with the appropriate governmental agencies all Tax
Returns required to be filed by such entity prior to the date hereof
with respect to all of its operations and assets for all periods
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ending on or prior to the date hereof, (y) has timely paid, or caused
to be paid in full, all Taxes due and payable with respect to such Tax
Returns (or has provided for all such Taxes in its February 28 Balance
Sheet or the Closing Balance Sheet), and (z) to the knowledge of
Sellers with respect to any period for which Tax Returns have not yet
been filed or for which Taxes are not yet due and owing, has made due
and sufficient current accruals for such Taxes in such financial
statements. None of the Sellers file any Tax Returns with respect to
the operations of the Filter Business in any jurisdiction other than
those set forth in Schedule 4.22. None of the Transferred Subsidiaries
file any Tax Returns in any jurisdiction other than those
set forth in Schedule 4.22.
(ii) No issue relating to any Transferred Subsidiary has been
raised in writing by any taxing authority in any audit or examination
which, by application of the same or similar principles, could
reasonably be expected to result in a material deficiency for any
subsequent period (including periods subsequent to the Closing Date).
To the knowledge of Sellers, there are no outstanding agreements,
waivers or arrangements extending the statutory period of limitation
applicable to any claim for, or the period for the collection or
assessment of,
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Taxes due from or with respect to any Transferred Subsidiary for any
taxable period, and no power of attorney granted by or with respect to
any Transferred Subsidiary relating to Taxes is currently in force.
Sellers have previously delivered to Buyer true and complete copies of
(y) all audit reports issued within the last three years relating to
the United States federal, state, local or foreign Taxes with respect
to the Transferred Subsidiaries and (z) that portion of the
consolidated United States federal Income Tax Returns and those state,
local and foreign Income Tax Returns for each of the last three taxable
years, pertaining to any of the Transferred Subsidiaries.
(iii) To the knowledge of Sellers, no audit or other
proceeding by any court, governmental or regulatory authority, or
similar person is pending with respect to any Taxes due from or with
respect to any Transferred Subsidiary or any Tax Return filed by or
with respect to any Transferred Subsidiary. No assessment of Tax has
been proposed in writing against any Transferred Subsidiary or any of
their respective assets or properties.
(iv) There are no Liens for Taxes with respect to the
Transferred Subsidiaries, or, in the case of the Sellers, upon the
assets of the Filter Business, except for
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Liens relating to current Taxes not yet due and payable or Liens for
Taxes being contested in good faith (which contests are described in
Schedule 4.22).
(v) None of the Sellers with respect to the Filter Business
or the Transferred Subsidiaries is a party to any joint venture,
partnership or other arrangement or contract which is treated as a
partnership for Tax purposes.
(vi) No consent to the application of section 341(f)(2) of
the Code (or any predecessor provision) or any similar provision of any
state, local, or foreign law has been made or filed by or with respect
to any Transferred Subsidiary or any of their respective assets or
properties. None of the assets or properties of the Sellers or any
Transferred Subsidiary is an asset or property that is or will be
required to be treated as being (y) owned by any person (other than
such Seller or such Transferred Subsidiary) pursuant to the provisions
of section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately before the enactment of the Tax Reform Act of
1986 or any similar provision of any state, local, or foreign law, or
(z) tax-exempt use property within the meaning of section 168(h)(l) of
the Code or any similar provision of any state, local, or foreign law.
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(vii) To the knowledge of Sellers, each of the Transferred
Subsidiaries has duly and timely withheld and paid over to the
appropriate taxing authorities all Taxes required to be so withheld and
paid over (or has provided for such Taxes in the February 28th Balance
Sheet or the Closing Balance Sheet) for all periods prior to the
Closing Date under all applicable laws and regulations.
(viii) As of the Closing no Transferred Subsidiary shall be a
party to, be bound by or have any obligation under, any Tax sharing
agreement or similar contract or arrangement with Mark IV or any of
Mark IV's subsidiaries or affiliates.
(ix) Except as may be included among the Severance
Obligations and employee contract obligations set forth on Schedule
1.03(d), there is no contract or agreement, plan or arrangement by the
Sellers or any Transferred Subsidiary covering any Person that,
individually or collectively, could give rise to the payment of any
amount that would not be deductible by the Buyer or any Transferred
Subsidiary by reason of section 28OG of the Code or any similar
provision of any state, local, or foreign law.
(x) To the knowledge of Sellers, there are no Tax rulings,
requests for rulings, closing agreements or
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settlements with applicable taxing authorities relating to the Sellers
or any Transferred Subsidiary which could affect the liability of the
Buyer or its affiliates (including the Transferred Subsidiaries) for
Taxes for any period after the Closing Date.
(b) For the purposes of this Agreement: (i) "Taxes" shall mean all
taxes, charges, fees, levies or other assessments, including, without
limitation, income, excise, property, turnover, sales and franchise taxes
(including any interest, penalties or additions attributable to or imposed on or
with respect to any such assessment) imposed by the United States or any foreign
jurisdiction, and any state, province, county, local or other government, taxing
authority, or subdivision thereof; (ii) "Income Taxes" shall mean all taxes
(including any interest, penalties or additions attributable or imposed on or
with respect to such taxes) imposed by the United States or any other
jurisdiction or by any state, province, county, local or other government,
taxing authority or subdivision thereof, solely with respect to any income or
gains of any Seller or any of the Transferred Subsidiaries excluding,
specifically, any sales taxes, transfer taxes, real or personal property taxes;
and (iii) "Tax Return" shall mean any return, report, information return or
other document (including any related or supporting information) filed or
required to be filed
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with any governmental entity or other authority in connection with the
determination, assessment or collection of any Taxes (whether or not such Taxes
are imposed on any Seller or a Transferred Subsidiary) or the administration of
any laws, regulations or administrative requirements relating to any Taxes.
4.23 Labor Relations; Employees. Schedule 4.23 attached hereto contains
a list of each contract or other agreement between any Seller or Transferred
Subsidiary and any labor union or other association representing any United
States or foreign employees of the Filter Business (each such contract being
hereinafter referred to as a "Labor Agreement"). Prior to the date hereof,
Sellers have delivered to the Buyer true and complete copies of each Labor
Agreement listed in Schedule 4.23 attached hereto. Except as set forth in
Schedule 4.23 attached hereto, with respect to the Filter Business, none of the
Sellers or Transferred Subsidiaries has, at any time during the last three (3)
years, experienced any labor disputes or any work stoppage, slow down, picketing
or lockout. In addition, except to the extent set forth in Schedule 4.23
attached hereto, with respect to the Filter Business in the United States: (a)
there is no unfair labor practice charge, or complaint or other action against
any of the Sellers or Transferred Subsidiaries pending or, to the knowledge of
Sellers, threatened before the National
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Labor Relations Board, and none of the Sellers or Transferred Subsidiaries is
subject to any order to bargain by the National Labor Relations Board and with
respect to United States and foreign employees in the Filter Business; (b) there
is no, and during the past three (3) years there has not been any, labor strike,
slow down, picketing or lockout or work stoppage actually pending or, to the
knowledge of Sellers, threatened against or affecting any Seller or Transferred
Subsidiary; (c) no question concerning representation is pending or, to
knowledge of the Seller or the Transferred Subsidiaries, is threatened
respecting employees of any of the Sellers or Transferred Subsidiaries; and (d)
no written grievance which might have a Material Adverse Effect is pending.
4.24 Customers and Suppliers. Except as disclosed in Schedule 4.24, to
the knowledge of Sellers, none of the Sellers or any of the Transferred
Subsidiaries is engaged in any dispute with any material customer or supplier
associated with the Filter Business except for disputes which occur in the
ordinary course of business and disputes between customers or suppliers of any
of the Sellers or Transferred Subsidiaries which, individually or in the
aggregate, will not have a Material Adverse Effect.
4.25 Compliance with Law. Except for matters pertaining to the Plans
which are disclosed on Schedule 4.17 and matters
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pertaining to Environmental Laws which are disclosed on Schedule 4.19, the
Filter Business is being operated in accordance with all applicable laws,
regulations and other requirements of all national governmental authorities, and
of all states, municipalities and other political subdivisions, domestic and
foreign, and agencies thereof, having jurisdiction over the Filter Business,
including, without limitation, such laws, regulations and requirements relating
to employment of unauthorized aliens, antitrust, consumer protection, currency
exchange, foreign corrupt practices, equal opportunity, health, occupational
safety, pension and securities, except for deviations from such laws arising
from the operations of the Sellers or the Transferred Subsidiaries which,
individually or in the aggregate, would not have a Material Adverse Effect.
Except as set forth in Schedule 4.25 attached hereto, none of the Sellers or
Transferred Subsidiaries has received any written notification of any asserted
failure by any of the Sellers or Transferred Subsidiaries to comply with any
such laws, rules or regulations applicable to the Filter Business.
4.26 Brokers and Finders. Except as set forth in Schedule 4.26 attached
hereto, neither Sellers nor any of their officers, directors or employees, as
the case may be, nor any of the Transferred Subsidiaries, has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or
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finders, fees in connection with the transactions contemplated by this
Agreement. Sellers will be solely responsible for the fees payable to any
persons listed on Schedule 4.26.
4.27 Product Warranties. The standard product or service warranties,
indemnifications and guarantees which each of the Sellers and Transferred
Subsidiaries extends to its customers in the ordinary course of the conduct of
the Filter Business, copies of which have been delivered to Buyer, are
identified in Schedule 4.27 attached hereto. Schedule 4.27 also contains a
general description of any product or service warranties extended by any of the
Sellers or Transferred Subsidiaries to any customer of the Filter Business, the
terms of which are materially different from the standard product or service
warranties otherwise described in Schedule 4.27 attached hereto. No warranties
are now in effect or outstanding with respect to products or services
manufactured, produced or performed by any of the Sellers or Transferred
Subsidiaries in the ordinary course of conduct of the Filter Business, except
for warranties implied by law and warranties of the types identified in Schedule
4.27 attached hereto.
4.28 Potential Conflicts of Interest. Except as set forth in Schedule
4.28 attached hereto, the Filter Business does not involve any contract,
agreement or arrangement (excluding employment agreements and rights arising
under any of the Plans)
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providing for the purchase or sale of any goods or services or relating to any
interest in any property, whether real or personal, or tangible or intangible
between (a) any Seller and any Transferred Subsidiary; (b) any Seller and any
officer, director or shareholder of any Transferred Subsidiary, or (c) any
Transferred Subsidiary and any officer, director or shareholder of any
Transferred Subsidiary. Except as set forth in Schedule 4.28 attached hereto,
none of the officers or directors of Sellers and none of the shareholders,
officers or directors of any Transferred Subsidiary has any cause of action or
other claim whatsoever against any Transferred Subsidiary or the Filter
Business.
4.29 Year 2000. Except as set forth on Schedule 4.29 attached hereto,
Sellers reasonably believe that the software and computer equipment
(collectively the "Systems") used in the Filter Business (including, without
limitation, manufacturing, HVAC, telephone and other communication equipment and
other machinery and equipment with embedded computer chips or other computer
devices) are Y2K Compliant (as defined below) except to the extent that the
failure of such Systems would not have a Material Adverse Effect. Sellers have
described to Buyer the steps Sellers have taken to make the material Systems
used in the Filter Business Y2K Compliant. Sellers make no representations
hereunder that the Systems of any customers,
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suppliers, vendors or outside manufacturers of the Filter Business are Y2K
Compliant. For purposes of this Agreement, Y2K Compliant means with respect to a
System that such System will not malfunction, will not cease to function, will
not generate incorrect data, and will not produce incorrect results when
processing, providing or receiving (i) date-related data into and between the
year 1999 and years thereafter and (ii) date-related data in connection with any
valid date in 1999 and such subsequent years.
4.30 Availability of Assets. Except as set forth in Schedule 4.30 and
except for the Excluded Assets, the Assets and the assets owned or leased by the
Transferred Subsidiaries constitute all the assets used in the Filter Business
(including, but not limited to, all books, records, computers and computer
programs and data processing systems).
4.31 Disclosure.
(a) None of the representations or warranties of Seller contained
herein, and none of the information contained in Schedule 4.31 or in the other
Schedules referred to in this Article 4, is false or misleading in any material
respect or omits to state a fact herein or therein necessary to make the
statements herein or therein not misleading in any material respect.
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(b) Except as expressly set forth in this Agreement, Buyer
acknowledges that Sellers have not made any representation or warranty, express
or implied, (including those referred to in Section 2-312 of the NYS Uniform
Commercial Code or in any statute applicable to real property) regarding
Sellers, the Assets or the Assumed Liabilities, and except as set forth in this
Agreement Sellers will not have or be subject to any liability to Buyer
resulting from the distribution to Buyer, or Buyer's use, of any information not
contained in this Agreement, or contained or referred to in the Schedules
hereto.
4.32 Representations and Warranties on the Closing Date; Disclosure.
The representations and warranties contained in this Article 4 shall be true and
complete on and as of the Closing Date with the same force and effect as though
made on the Closing Date. Disclosure of any fact or information in any Schedule
required by this Article 4 shall be deemed for purposes of this Agreement to be
disclosure on any other Schedule required by any Section of this Agreement on
which such item could have been listed pursuant to this Agreement.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
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5.01 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, and has the corporate
power and authority to carry on its business as presently conducted.
5.02 Authorization by Buyer. The Buyer has full corporate power and
authority to enter into, execute and deliver this Agreement and each of the
other documents and instruments to be executed and delivered by Buyer pursuant
to this Agreement and to carry into effect the transactions contemplated
hereunder and thereunder. The execution and delivery of this Agreement and each
of the other documents and instruments to be executed and delivered by the Buyer
pursuant to this Agreement and the consummation of the transactions contemplated
hereunder and thereunder have been duly authorized by all necessary corporate
action on the part of Buyer. No other corporate act or proceeding on the part of
Buyer or its stockholders is necessary to authorize the execution and delivery
of this Agreement and each of the other documents and instruments to be executed
and delivered by Buyer pursuant to this Agreement or the consummation of the
transactions contemplated hereby and thereby.
5.03 Binding Agreements. This Agreement constitutes, and, when executed
and delivered on the Closing Date, each of the other documents and instruments
to be executed and delivered by
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Buyer to Sellers will constitute valid and binding obligations of Buyer,
enforceable against Buyer in accordance with its terms except that: (a) such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights generally; and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
5.04 No Violation. Neither the execution and delivery of this
Agreement, nor the consummation by Buyer of the transactions contemplated hereby
will: (a) violate any statute or law, or any rule or regulation of any
governmental authority; (b) violate any order, writ, injunction or decree of any
court or governmental authority; or (c) violate or conflict with or constitute a
default under (or an event which, with notice or lapse of time, or both, would
constitute a default under) or will result in the termination of, or accelerate
the performance required by, or result in the creation of any material lien,
security interest, charge or encumbrance upon any of the material assets of
Buyer under any term or provision of: (i) the Certificate of Incorporation or
By-Laws of Buyer; or (ii) any material lease, contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character
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to which Buyer is a party or by which Buyer or any of its assets or properties
may be bound or affected.
5.05 Litigation. There are no actions, suits or claims or legal,
administrative, equitable or arbitration proceedings or outstanding orders,
judgments, injunctions, awards or decrees of any court, any governmental or
regulatory body or arbitration tribunal pending, or, to the knowledge of Buyer,
threatened against or involving Buyer which seek to prevent the consummation of
the transactions contemplated by this Agreement.
5.06 Consents and Approvals. Except for the filing of pre-merger
notification documentation under the HSR Act and the expiration of all
applicable waiting periods thereunder and any consent that may be applicable
under the laws of any foreign jurisdiction, no permit, consent, approval or
authorization of, or declaration, filing or registration with, any governmental
agency or authority or any other person, firm or corporation is necessary or
required to be obtained by Buyer in connection with the execution and delivery
by Buyer of this Agreement or the consummation by Buyer of the transactions
contemplated hereby.
5.07 Brokers and Finders. Except as set forth in Schedule 5.07, neither
Buyer, nor any of its officers, directors or employees, as the case may be, has
employed any broker or finder or incurred any liability for any brokerage fees,
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commissions or finders fees in connection with the transactions contemplated by
this Agreement.
ARTICLE 6 COVENANTS OF SELLERS
6.01 Access Pending the Closing Date. Sellers will: (a) grant to Buyer
and its counsel, accountants and other representatives, reasonable access during
normal business hours to the facilities relating to the Filter Business and each
parcel of Real Property which is used by the Sellers or Transferred Subsidiaries
in the conduct of the Filter Business and to all properties, books, contracts,
commitments and records of Sellers relating to the Filter Business and each of
the Transferred Subsidiaries; and (b) furnish Buyer and its representatives all
such information as Buyer or its representatives may reasonably request
concerning the Filter Business and the business and assets of the Sellers and
Transferred Subsidiaries in the Filter Business.
6.02 Conduct of Business Prior to the Closing. During the period
commencing on the date hereof and ending on the Closing Date: (a) Sellers have
not taken any action; and (b) in the case of the Transferred Subsidiaries,
Sellers will take any and all action necessary to prevent each of the
Transferred Subsidiaries from taking any action that would, in any such
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case, cause any of the representations and warranties contained in Article 4 to
be untrue as of the Closing Date. In addition, during the period beginning on
the date hereof and ending on the Closing Date: (w) Sellers will use their
reasonable best efforts and (x) in the case of the Transferred Subsidiaries,
Sellers will take such action as may be necessary with respect to the Filter
Business to cause each Transferred Subsidiary to use its reasonable best efforts
to keep intact the business organization and reputation of each such Transferred
Subsidiary and to preserve for the Buyer the goodwill of the suppliers,
customers, distributors, sales representatives, employees and others having
business relations with the Filter Business.
6.03 Termination of Benefit Accruals Under Defined Benefit Plans and
Defined Contribution Plans. Mark IV agrees that, prior to the Closing Date or as
soon as practicable thereafter, Mark IV shall amend the terms of the master
defined benefit pension plan maintained by Mark IV and known as the Mark IV
Industries, Inc. and Subsidiaries Employees Retirement Income Fund (hereinafter
the "Master Defined Benefit Plan"): (a) to provide that participants therein who
are employees of the Filter Business immediately prior to the Closing Date
("Filter Participants") shall cease to accrue benefits thereunder for any
purpose on the Closing Date (or such earlier date as Mark IV and Buyer may
subsequently agree to in writing), (b) to provide that
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each Transferred Subsidiary participating in the Master Defined Benefit Plan
shall cease participating as of the Closing Date, and (c) to provide that Filter
Participants shall be fully vested (i.e., one hundred percent (100%) vested) in
their accrued benefits under the Master Defined Benefit Plan. Mark IV agrees to
take, or cause each of the Transferred Subsidiaries to take, prior to the
Closing Date, any and all actions (including, without limitation, the delivery
of any notices required under ERISA and the Code and the timely filing of all
required filings with any government agency), which are necessary or reasonably
required to effectuate the intent of this Section 6.03.
6.04 Names. On or prior to the Closing Date or as promptly thereafter
as may be required, each of Facet, PPAFC and G W Dahl shall take all steps
necessary to change its corporate name to a name which does not contain the word
"Facet", "Purolator", "G W Dahl" or any words or phrases confusingly similar to
such words.
6.05 No Solicitation. Sellers shall not and shall take any and all
action necessary to prevent any of their respective directors, officers,
employees or agents and any directors, officers, employees or agents of the
Transferred Subsidiaries from directly or indirectly, encouraging, soliciting,
initiating or entering into any discussions or negotiations concerning any
disposition of all or any material portion of the Filter
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Business by a sale of capital stock, assets or otherwise (other than pursuant
to this Agreement), or any proposal therefor, or from furnishing or causing to
be furnished any information concerning the Filter Business to any party in
connection with any transaction involving the acquisition of all or any material
portion of the Filter Business by any person other than the Buyer.
6.06 Non-Competition. As a part of the inducement to Buyer to enter
into this Agreement, Sellers hereby agree that for a period of three (3) years
(the "Covenant Term") from the date hereof, Sellers shall not, nor shall any
division of any of the Sellers or any corporation which Mark IV directly or
indirectly controls the management of or owns more than fifty percent (50%) of
the total number of outstanding shares entitled to vote, or their successors and
assigns (hereinafter referred to as "Sellers' Affiliates"), without the prior
express written consent of the Buyer, own, manage, operate, or control, directly
or indirectly, any business, firm or corporation which is engaged anywhere in
the world in the manufacture or sale of any products which are manufactured and
sold by the Filter Business prior to the Closing Date (hereinafter the
"Products"). Notwithstanding the foregoing, nothing herein shall be deemed to
limit or otherwise restrict the rights of any division, subsidiary or affiliate
of Mark IV which is not engaged in the
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Filter Business from continuing, after the Closing Date, to conduct its business
in the same manner as such business was conducted prior to the Closing Date.
Ownership or purchase by Mark IV or any of its direct or indirect subsidiaries
at or after the time of Closing, of less than five percent (5%) of the issued
and outstanding capital stock of any enterprise engaged in the production or
sale of Products, the securities of which are listed on a national securities
exchange or included in the national list of over-the-counter securities, shall
not be deemed a violation of this Section 6.06. In addition, Sellers shall not
be deemed to be in violation of this Section 6.06 in the event that, following
the Closing Date, Sellers or any of Sellers' Affiliates acquires substantially
all the assets of any person, firm or corporation or a majority of the issued
and outstanding capital stock of any corporation and, following such
acquisition, less than fifteen percent (15%) of the total annual sales of any
such acquired company is attributable to sales of Products. Upon breach by
Sellers or Sellers' Affiliates of any provision of this Section 6.06, Buyer
shall be entitled to injunctive relief, both preliminarily and permanently,
since the remedy at law would be inadequate and insufficient. Additionally,
Buyer will be entitled to all such other legal and equitable remedies as may be
available to it. In the event any of the provisions of this Section 6.06 are
determined by a court
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of competent jurisdiction to be contrary to any applicable statute, law or rule,
or for any reason to be unenforceable as written, such court may modify any of
such provisions so as to permit enforcement thereof as thus modified.
6.07 Collection of Receivables. Following the Closing Date, Sellers
shall take or cause to be taken any action that is reasonably necessary to
assist Buyer in the collection of the accounts receivable of the Filter Business
included within the Assets, including, but not limited to, the endorsement to
Buyer of checks made payable to any Seller, the transfer to Buyer of control of
any of the Filter Business lock boxes for the collection and receipt of payments
made to Sellers arising exclusively from the accounts receivable included within
the Assets and the prompt payment to Buyer of all money received by Sellers with
respect to such accounts receivable. In the same manner, following the Closing
Date Buyer shall promptly remit to Sellers any receivables of Sellers that are
not related to the Filter Business in the event such receivables are received by
Buyer after the Closing Date.
6.08 Transfer of Non-Filter Businesses. Sellers and Buyer acknowledge
that certain of the Transferred Subsidiaries now own and operate or have in the
past owned and operated certain businesses and the assets and liabilities
associated therewith that are not related to the Filter Business (the
"Non-Filter
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Businesses") which are generally described on Schedule 6.08. Sellers agree, on
or prior to the Closing of the transactions contemplated by this Agreement, at
their expense, to take any and all action necessary to cause the Non-Filter
Businesses currently owned by such Transferred Subsidiaries and any and all
assets and liabilities associated therewith, to be transferred to an affiliate
of Sellers without recourse, representation or warranty. In addition, Sellers
agree, on or prior to Closing, to take any and all actions necessary to cause
Facet Iberica to transfer certain cash assets of Facet Iberica by dividend to
its shareholders as described on Schedule 6.08. For all purposes of this
Agreement, including, but not limited to, the calculations set forth in Article
2 of this Agreement, all transactions contemplated in this Section shall be
deemed to have occurred prior to the close of business on August 31, 1999 and
shall be taken into account in determining Closing Net Assets for purposes of
the calculations set forth in said Article 2. Except to the extent taken into
account in determining Closing net Assets, all Taxes (including Transfer Taxes)
resulting from the transfers and dividends contemplated by this Section 6.08
shall be paid by Sellers.
6.09 Audited Financial Statements. Sellers shall take such actions as
shall be necessary at Sellers' expense to prepare audited consolidated balance
sheets and statements of operations
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of the Filter Business (the "Audited Financial Statements") for the three fiscal
years ending February 28, 1999. The Audited Financial Statements shall comply
with the requirements of Regulation S-X promulgated by the Securities and
Exchange Commission. The Audited Financial Statements shall be delivered to
Buyer not later than 45 days after the Closing and Buyer agrees to cooperate to
the extent reasonably necessary after the Closing in the preparation of such
statements.
ARTICLE 7 COVENANTS OF BUYER
7.01 Employees and Employee Benefit Plans.
(a) Subject to the obligations of Buyer which arise under the
Collective Bargaining Agreements, Buyer shall offer employment (at the base
compensation and wage levels as Buyer shall determine) to each of the employees
of the filter division of Facet and of PPAFC, who is actively employed as of the
Closing Date (the "Filter Division Employees"). Each of the employees of the
Transferred Subsidiaries on the Closing Date shall continue in the employment of
the applicable Transferred Subsidiary. Those Filter Division Employees who
accept Buyer's offer of employment and employees of the Transferred Subsidiaries
as of the Closing Date are referred to herein as "Transferred Employees."
Notwithstanding anything herein to the contrary, nothing in this Agreement shall
create any obligation
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on the part of Buyer to continue the employment of any employee for any definite
period following the Closing. Buyer shall offer employment to any individual who
was an employee of the Filter Business and who is either (i) receiving
sick-leave or short-term disability benefits under Seller's sick-leave or
short-term disability program or who is on an approved leave of absence as of
the Closing and (ii) is entitled to reinstatement under applicable federal or
state law, in each case under clause (i) or (ii) subject to the following
conditions (except to the extent that such conditions are not applicable to the
reason for such person's absence): (i) such individual is released by his or her
physician to return to active employment; (ii) such individual actually returns
to active employment immediately upon such release and (iii) such release is
prior to such individual's becoming eligible for long-term disability benefits
under Seller's long-term disability program, provided, however, that no
individual shall be offered employment under this provision after six months
following the Closing or any applicable period as required by law, if longer.
Any employee who accepts Buyer's offer of employment pursuant to the immediately
preceding sentence shall not become an employee of the Buyer until such employee
actually returns to active employment.
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(b) The Buyer hereby agrees that, at all times during the one (1)
year period following the Closing Date (the "Benefit Continuation Period"), the
Buyer shall take such action as may be necessary to maintain and provide for the
United States and foreign employees of the Filter Business, benefits under
personnel practices, employee welfare plans and employee pension plans which in
the aggregate are reasonably comparable to the employee welfare plans, the
employee pension plans and the foreign benefit plans, as applicable which were
provided to such employees of the Filter Business on the Closing Date as more
particularly set forth in Schedule 4.17(a) and Schedule 4.17(b) attached hereto,
including, without limitation, certain supplementary pension policies for
employees of Facet UK, provided, that Buyer shall have the right to make any
amendment to or adjustment in any such employee benefits as may be necessary, in
Buyer's judgment, either to be in accord with any existing employee welfare plan
or employee pension plan that may be applicable to other employees of the Buyer
or to comply with any applicable law.
(c) Buyer shall credit Transferred Employees with any amounts paid
under Seller's Plans prior to the Closing Date toward satisfaction of the
applicable deductible amounts and copayment minimums under the corresponding
welfare plans of Buyer, but only to the extent such payments would be taken into
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account under the welfare plans maintained by Buyer with respect to similarly
situated employees.
(d) No provision of this Section 7.01 shall create any third-party
beneficiary rights in any employee or former employee (including any beneficiary
or dependent thereof) of Sellers or the Transferred Subsidiaries, any of their
respective affiliates, Buyer or any affiliates of Buyer in respect of continued
employment (or resumed employment) for any specified period of any nature or
kind whatsoever, and no provision of this Section 7.01 shall create such
third-party beneficiary rights in any such persons in respect of any benefits
that may be provided, directly or indirectly, under any employee benefit plan or
arrangement, including the currently existing Non-ERISA Plans, Compensation
Commitments, Plans and Foreign Employee Benefit Plans.
(e) Anything herein to the contrary notwithstanding, no employee
of any of the Sellers shall become an employee of Buyer or any of its affiliates
until the Closing Date and, until the Closing Date and the consummation of the
transactions called for by this Agreement, neither the Buyer nor any of its
affiliates shall have any liability with respect to any such employees, except
with respect to any payroll expense (including Taxes thereon) and any employee
benefit and pension expense
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allocable to the period between the Closing Balance Sheet Date and the Closing
Date.
7.02 Insurance Coverage. Buyer acknowledges that the insurance coverage
which Sellers maintain with respect to the Filter Business including, without
limitation, general liability, product liability, auto liability, property,
commercial umbrella, excess umbrella, aircraft products, fiduciary liability,
crime liability, workers compensation and medical stop loss insurance coverage
is maintained by Mark IV under policies with respect to which Mark IV is the
named insured and the other Sellers and the Transferred Subsidiaries are
additional insureds. Buyer acknowledges that, effective as of the Closing Date,
Mark IV intends to remove the Filter Business from the insurance coverage
provided by such insurance policies. Accordingly, Buyer acknowledges that
Sellers' insurance protection shall not be available to Buyer with respect to
any injury, loss or damage which Buyer, any of the Transferred Subsidiaries, the
Filter Business or any third party may suffer as a result of any event,
occurrence or circumstance existing or occurring with respect to the Filter
Business at any time on or after the Closing Date. Sellers confirm and
acknowledge that Sellers' insurance protection, subject to any policy
limitations and deductibles contained therein, shall be
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available with respect to events, occurrences or circumstances exiting or
occurring at any time prior to the Closing Date.
7.03 Letters of Credit, Performance Bonds, etc. Buyer shall promptly
after Closing deliver to Sellers replacement letters of credit for those letters
of credit or bonds set forth on Schedule 7.03 and shall use its reasonable
efforts to deliver to Sellers replacement performance bonds, payment bonds, bid
bonds, guarantees and similar instruments, in an aggregate principal amount and
with terms and from banks or other financial institutions or surety companies in
each case reasonably satisfactory to both parties hereto, to replace (or, to the
extent required as described above, to collateralize) any performance bonds,
payment bonds, bid bonds, guarantees and similar instruments of Sellers or any
of the Transferred Subsidiaries relating to the Filter Business. If the
beneficiary thereof will not permit replacement, Buyer shall indemnify and hold
Sellers harmless from any liability (other than any liability not in the
ordinary course arising from an action or inaction by any of the Sellers or by
the Transferred Subsidiaries prior to the Closing Date) arising from any such
performance bonds, payment bonds, bid bonds, letters of credit, guarantees and
similar instruments of Sellers or any of the Transferred Subsidiaries relating
to the Filter Business (except for those letters of credit set forth on Schedule
7.03, which
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must be replaced or collateralized by Buyer prior to or at the Closing) referred
to in this Section 7.03.
ARTICLE 8 ADDITIONAL COVENANTS OF BUYER AND SELLER
8.01 Consents and Conditions. Sellers will use their best efforts, at
their own cost and expense, to seek to obtain any required stockholder,
third-party and governmental consents to the transactions contemplated hereunder
(including, without limitation, the execution and delivery of any novation
agreements applicable to the transfer of government contracts) in order to
permit the continuance of the Filter Business after the Closing Date by the
Buyer and to cause each of the conditions to the obligations of Buyer to close
the transactions contemplated hereunder (as more particularly set forth in
Article 10 hereof) to be satisfied. Buyer will cooperate with Sellers and take
such action as Sellers may reasonably request (including, without limitation,
the execution and delivery of any novation agreements applicable to the transfer
of government contracts)in connection with the efforts of Sellers to obtain at
the expense of Sellers any consent from any third party to the consummation of
the transactions contemplated by this Agreement.
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8.02 Filings. Prior to the date hereof Sellers and Buyer shall have
made any and all filings required under the HSR Act. In addition and to the
extent any further filings or information may be necessary under the HSR Act,
Sellers shall furnish to the Buyer and Buyer shall furnish to Sellers: (a) such
information and reasonable assistance as may reasonably be requested in
connection with the preparation by such other party of any necessary filings or
submissions to any U.S. or foreign governmental agency; and (b) copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or its representatives, on the one hand,
and the Federal Trade Commission, the Antitrust Division of the U.S. Department
of Justice or any other U.S. or foreign governmental agency or authority or
members of their respective staffs, on the other hand, with respect to this
Agreement or the transactions contemplated hereby.
8.03 Access After the Closing Date. Sellers agree with Buyer that, on
and after the Closing Date, each, upon reasonable advance notice from the other,
will permit the other and their respective representatives (including their
counsel and auditors), during normal business hours for a reasonable business
purpose, to have access to and examine and make copies of all books and records
of the other which pertain to the Filter Business or to the business and assets
of any of the
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Transferred Subsidiaries including, but not limited to, correspondence,
memoranda, books of account, payroll records computer records and the like. The
out-of-pocket costs of reviewing and photocopying any such material (excluding
the compensation and related payroll taxes of employees engaged in the copying
of any such materials) shall be borne by the party requesting such review or
photocopies. Any obligations under this Section shall terminate as to either
party to the extent any matter for which information is requested hereunder is
subject to a statute of limitations which has expired.
8.04 Record Retention. For a period of ten (10) years after the date
hereof, or, in the case of books or records pertaining to Taxes, for a period
until the expiration of all applicable statutes of limitation, Buyer and Sellers
agree that, prior to the destruction or disposition of any books or records
pertaining to the Filter Business or the business or assets of any of the
Transferred Subsidiaries, each party shall provide not less than forty five (45)
nor more than ninety (90) days prior written notice to the other of any such
proposed destruction or disposal. If the recipient of such notice desires to
obtain any of such documents, it may do so by notifying the other party in
writing at any time prior to the scheduled date for such destruction or
disposal. Such notice must specify the documents which the requesting party
wishes to
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obtain. The parties shall then promptly arrange for the delivery of such
documents. All out-of-pocket costs associated with the delivery of the requested
documents (excluding the compensation and related payroll taxes of employees
engaged in the preparation, copying or delivery of any such documents) shall be
paid by the requesting party.
8.05 Tax Matter Covenants
(a) Indemnification by Sellers. For purposes of this section,
Taxes taken into account in determining Closing Net Assets for purposes of the
calculations set forth in Article 2 hereof shall be deemed to be paid by
Sellers. Sellers jointly and severally shall be responsible for, shall pay or
cause to be paid, and shall indemnify and hold harmless Buyer and its affiliates
in the manner described in this Section 8.05 from and against (and shall be
entitled to any refund of) each of the following:
(i) to the extent not previously paid, any and all Taxes with
respect to any taxable period of Sellers or any Transferred Subsidiary
(or any predecessor) ending on or before the Closing Date, but
excluding all transactions entered into by any Transferred Subsidiary
occurring on the Closing Date and after the Closing which are not
related to the transactions contemplated by this Agreement ("Excluded
Transactions");
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(ii) without duplication, to the extent not previously paid,
any and all Income Taxes resulting from the Sellers or any Transferred
Subsidiary having been (or ceasing to be) included in any affiliated,
consolidated, combined or unitary Tax Return or tax group that included
the Sellers or any Transferred Subsidiary for any taxable period (or
portion thereof) ending on or before the Closing Date (including,
without limitation, any liability for Taxes resulting from an
acceleration of an "intercompany transaction," within the meaning of
Treasury Regulation section 1.1502-13 or 1.1502-14 (or any similar
provision under state, local or foreign law or any predecessor
provision or regulation), that occurred on or before the Closing Date
(but excluding the Excluded Transactions);
(iii) without duplication, to the extent not previously paid,
any and all Income Taxes of any member of an affiliated, consolidated,
combined or unitary group (other than the Sellers or the Transferred
Subsidiaries) of which the Sellers or any Transferred Subsidiary is or
was a member on or prior to the Closing Date, by reason of the
liability of the Sellers or any Transferred Subsidiary pursuant to
Treasury Regulation section 1.1502-6(a) or any analogous or similar
provision under state, local or foreign law or any predecessor
provision or regulation;
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(iv) without duplication, to the extent not previously paid,
any and all employment and withholding taxes with respect to the Filter
Business for tax periods ending on or before the Closing Date;
(v) to the extent not previously paid, any and all Taxes
allocable to taxable periods beginning before and ending after the
Closing Date ("Straddle Period"), allocable to the Sellers pursuant to
Section 8.05(c), whenever paid or assessed, including as a result of
any action, suit, investigation, audit, claim, assessment or amended
Tax Return; and
(vi) to the extent not previously paid, and notwithstanding
anything herein to the contrary, all Taxes imposed on, relating to or
measured by the ownership or operation of the Non-Filter Businesses by
the respective Transferred Subsidiaries and all Taxes (including
Transfer Taxes) attributable to the transfers and dividends
contemplated in Schedule 6.08 (the "Non-Filter Business Taxes"),
whenever incurred or assessed, including as a result of any action,
suit, investigation audit, claim, assessment or amended Tax Return. It
is understood that (x) in determining Closing Net Assets for purposes
of the calculations set forth in Article 2 hereof, there shall be taken
into account Spanish withholding taxes with respect
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to the distribution of a dividend by Facet Iberica to its shareholders
described in said Schedule 6.08 as well as an estimate of all other
Taxes (including Transfer Taxes) allocated to Sellers pursuant to
Sections 6.08, 8.05 and 8.12 hereof with respect to the other transfers
contemplated by Schedule 6.08, (y) Buyer and Sellers shall cooperate in
causing Facet Iberica to pay over to the appropriate governmental
authority on a timely basis the withholding taxes described in clause
(x) with respect to the distribution of a dividend by Facet Iberica to
its shareholders, and (z) Sellers shall be responsible for any
additional (and shall be entitled to a refund of any excess)
withholding taxes or other Taxes with respect to such distribution and
other transfers, whenever incurred or assessed, including as a result
of any action, suit, investigation, audit, claim, assessment or amended
Tax Return, administrative or court proceeding. Notwithstanding
anything contained in this Agreement to the contrary, to the extent the
amount of any Spanish withholding taxes allocated to Sellers as
provided above, with respect to any dividend to Facet UK or Facet
Italiana actually provides a tax benefit to Buyer or any Transferred
Subsidiary, such benefit shall offset and reduce the liability of
Sellers for Taxes for the applicable Straddle
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Period as provided in Section 8.05(c) of this Agreement or for Taxes
resulting from the transactions contemplated by Schedule 6.08,
(provided that any such benefit shall not be greater than the initial
Taxes withheld on the dividend from Facet Iberica to each respective
country).
If, as a result of any action, suit, investigation, audit, claim, assessment or
amended Tax Return, there is any change after the Closing Date in an item of
income, gain, loss, deduction, credit or amount of Tax that results in an
increase in a Tax liability for which Sellers would otherwise be liable pursuant
to this Section 8.05(a), and such change actually results in a decrease in the
Tax liability of a Transferred Subsidiary, Buyer or any affiliate or successor
of any thereof for any taxable year or period beginning after the Closing Date
or for the portion of any Straddle Period beginning after the Closing Date,
Sellers and the Transferred Subsidiaries shall not be liable with respect to
such increase to the extent of such decrease (and, to the extent such increase
in Tax liability is paid to a taxing authority by Sellers or any affiliate
thereof, Buyer shall pay Sellers an amount equal to such decrease).
(b) Indemnification by Buyer. Buyer agrees to indemnify and hold
harmless the Sellers from and against (and Sellers and its affiliates shall have
no liability under this Agreement on account of) Taxes of the Transferred
Subsidiaries
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that are not allocated to Sellers pursuant to Section 8.05(a) (including Taxes
resulting from an Excluded Transaction).
(c) Allocations. Sellers and Buyer shall, to the extent permitted
by applicable law, elect with the relevant taxing authority to close the taxable
period of the Sellers and the Transferred Subsidiaries on the Closing Date. In
any case where applicable law does not permit a Seller or any Transferred
Subsidiary to close its taxable year on the Closing Date, Taxes (other than
Taxes described in Section 8.05(a)(vi)) attributable to a Straddle Period
(including any Tax resulting from any action, suit, investigation, audit, claim,
assessment or amended Tax Return) shall be allocated (y) to Sellers for the
period up to and including the Closing Date, but excluding any Excluded
Transaction, and (z) to Buyer for the period subsequent to the Closing Date
(including any Excluded Transaction). Any allocation required to determine any
Taxes (other than property Taxes and other Taxes not susceptible to allocation
based on a closing the books basis and Taxes described in Section 8.05(a)(vi))
attributable to any Straddle Period shall be made by means of a closing of the
books and records of each of the Sellers and the Transferred Subsidiaries as of
the close of business on the Closing Date, and, to the extent of Taxes not
susceptible to such allocation, by apportionment on the basis of elapsed days,
and to the extent attributable to any Excluded
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Transaction, shall be allocated to the period subsequent to the Closing Date. An
estimate of all Taxes allocated to Sellers pursuant to Section 8.05(a) for the
Straddle Period Taxes shall be included as liabilities on the Closing Balance
Sheet in accordance with the procedures set forth in Article 2 of this
Agreement.
(d) Procedure for Tax Claims.
(i) Promptly after receipt by Buyer or its affiliates of
written notice of the assertion or commencement of any claim, audit,
examination, or other proposed change or adjustment by any taxing
authority concerning any Tax allocated to Sellers pursuant to Sections
6.08, 8.05(a) and 8.12 (each a "Tax Claim"), Buyer shall notify
Sellers. Such notice shall contain factual information (to the extent
actually known by Buyer or any Transferred Subsidiary) describing the
asserted Tax Claim in reasonable detail and shall include copies of any
notice or other document received from any taxing authority in respect
of any such asserted Tax Claim. The failure of Buyer to give Sellers
prompt notice as provided herein shall not relieve Sellers of any of
their obligations under Section 8.05(a), except to the extent that the
Sellers are substantially prejudiced by such failure.
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(ii) Sellers shall have the sole right to represent Sellers
or any Transferred Subsidiary's interests in any Tax audit or
administrative or court proceeding ("Contest") relating to any Tax
allocated to Sellers pursuant to Section 8.05(a), so long as Sellers
shall have acknowledged in writing their indemnity obligation to Buyer
if the Contest should prove unsuccessful, provided that to the extent
that the resolution of any issue in such Contest could adversely and
significantly affect the interests of any Transferred Subsidiary, Buyer
or any affiliate or successor of any thereof for any taxable year or
period beginning after the Closing Date (or for the portion of any
Straddle Period beginning after the Closing Date) Buyer shall be
entitled to participate (but not control) in good faith with Sellers in
Contesting such issue. Each of Buyer and Sellers shall bear the cost of
their respective counsel, accountants or other representatives engaged
by them to conduct any Contest with respect to Taxes.
(iii) Sellers shall promptly notify Buyer of the commencement
of any claim, audit, examination or other proposed change or adjustment
by any taxing authority which could reasonably be expected to affect
the liability of Buyer or any Transferred Subsidiary or any of Buyer's
affiliates for Taxes and Sellers shall keep Buyer duly
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informed of the progress of any Contest conducted by Sellers pursuant
to Section 8.05(d)(ii).
(e) Preparation of Tax Returns.
(i) Sellers shall properly prepare or cause to be properly
prepared in a manner consistent with past practices and prior
adjustments, and shall timely file or cause to be timely filed (after
taking into consideration any available extensions for the filing of
such Tax Returns), all separate, consolidated, combined or unitary Tax
Returns for Income Taxes and other Taxes, which include Sellers or any
of the Transferred Subsidiaries or their assets or operations and which
are required to be filed with respect to any taxable period ending on
or before the Closing Date.
(ii) Except as set forth in Section 8.05(e)(i) above, Buyer
shall be responsible for the preparation, filing and payment of all
other Tax Returns required to be filed (taking into account all timely
extensions) after the Closing Date by or on behalf of the Transferred
Subsidiaries, or with respect to their assets or operations.
(iii) With respect to any Tax Return required to be filed by
Buyer with respect to a Straddle Period pursuant to Section 8.05(e)(ii)
(a "Straddle Period Tax
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Return"), Buyer shall prepare such return in a manner consistent with
past practices and prior audit adjustments (other than with respect to
items which Buyer in good faith determines have been erroneously
treated in prior returns filed by Sellers or the Transferred
Subsidiaries). Sellers shall submit to Buyer not less than thirty (30)
business days prior to the applicable filing date for any Straddle
Period Tax Return, Seller's proposed treatment of the Non-Filter
Business Taxes which, in the case of the transfers referred to in
Schedule 6.08, shall be in accordance with the provisions
outlined in Schedule 6.08. Such treatment shall, to the extent it
relates to the operations (as opposed to the transfers)
of the Non-Filter Businesses shall be prepared in a manner consistent
with past practices and prior audit adjustments. To the extent that
Buyer disagrees with Seller's proposed treatment of Non-Filter Business
Taxes, Buyer and Seller shall attempt to resolve such differences, but,
subject to this Section 8.05(e), the ultimate decision as to how the
Straddle Period Tax Return is prepared with respect to Non-Filter
Business Taxes shall be made by the Sellers. In connection with its
submission of its proposed treatment of the operations and transfers of
the Non-Filter Businesses, Sellers shall furnish to Buyer such
information as Buyer or
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its representatives shall reasonably request. Buyer shall deliver, at
least fifteen (15) days prior to the due date for filing each such Tax
Return (taking into account all timely extensions), to Sellers a draft
of such Straddle Period Tax Return and a statement setting forth in
reasonable detail the amount of Taxes allocated to Sellers pursuant to
Sections 6.08, 8.05(c) and 8.12 and all items which Buyer has
determined to have been treated inconsistently with past practices and
prior adjustments or erroneously treated in prior years by the Foreign
Subsidiaries or not in accordance with Schedule 6.08 (the "Tax
Statement"). Sellers shall have the right to review such draft Tax
Return and the Tax Statement prior to the filing of such Tax Return and
to suggest any reasonable changes to such Tax Return. Sellers and Buyer
agree to consult and resolve in good faith any issue arising as a
result of the review of such draft Tax Return and the Tax Statement and
mutually to consent to the filing as promptly as possible of such Tax
Return. In the event the parties are unable to resolve any dispute with
respect to any Straddle Period within five (5) business days following
the delivery of such draft Tax Return and the Tax Statement, the
parties shall jointly request a Tax Settlement Auditor (appointed
pursuant to the principles of Section 8.05(i))
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to resolve such issue in dispute as promptly as possible. If the Tax
Settlement Auditor is unable to make a determination with respect to
any disputed issue within five (5) business days prior to the due date
(including any timely extension) for the filing of the Tax Return in
question, then Buyer may file such Tax Return on the due date
(including any timely extension) therefor without such determination
having been made and without Sellers' consent, provided that such Tax
Return shall be prepared in a manner which Buyer determines in good
faith to be consistent with past practices and audit adjustments.
Notwithstanding the filing of such Tax Return, the Tax Settlement
Auditor shall make a determination with respect to any disputed issue
and the amount of Taxes that are allocated to Sellers pursuant to
Sections 6.08, 8.05(c) and 8.12 shall be as determined by the Tax
Settlement Auditor. In the event the Taxes on the Straddle Period Tax
Return for the period beginning with the commencement of the Straddle
Period and ending on the Closing Date determined as provided above or
as finally determined by an audit or examination by any relevant taxing
authority shall be less or more than the amount of Taxes paid by
Sellers (including any amounts for such Taxes taken into account in
determining Closing Net Assets for purposes of the
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calculations set forth in Article 2 hereof and any adjustments for
benefits with respect to the withholding Taxes referred to in Schedule
6.08 and Section 8.05(a)(vi), Buyer or Sellers, as the case may be,
shall pay the amount of such difference to the other party within five
(5) business days after the final determination of such Straddle Period
Taxes.
(iv) Sellers and Buyer shall cooperate fully with each other
and make available to each other in a timely fashion such Tax data and
other information as may be reasonably required by Sellers or Buyer for
the preparation and timely filing of any Tax Return required to be
prepared and filed by the other party hereunder, or in connection with
the preparation or filing of any election, claim for refund, consent or
certification.
(v) Neither Buyer nor any of its affiliates shall (or shall
cause or permit any Transferred Subsidiary to) amend, refile or
otherwise modify (or grant an extension of any statute of limitation
with respect to) any Tax Return relating in whole or in part to Sellers
or any Transferred Subsidiary with respect to any taxable year or
period ending on or before the Closing Date, to the extent that Sellers
conclude in good faith that the proposed amendment, refiling, or
modification of such Tax Return
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could adversely and significantly affect Sellers' liability hereunder)
without the prior written consent of Sellers, which consent may be
withheld in the reasonable discretion of Sellers.
(vi) Buyer shall promptly cause each Transferred Subsidiary
to prepare and provide to Sellers a package of Tax information
materials, including, without limitation, schedules and work papers
(the "Tax Package") required by Sellers to enable Sellers to prepare
and file all Tax Returns required to be prepared and filed by Sellers
pursuant to this Section 8.05(e). The Tax Package shall be completed in
accordance with past practice and prior audit adjustments. Buyer shall
cause the Tax Package to be delivered to Sellers within ninety (90)
days after the Final Purchase Price has been determined.
(f) Access to Information. Sellers and Buyer shall provide to each
other, and Buyer shall cause each of the Transferred Subsidiaries to provide to
Sellers, reasonable access, at any reasonable time and from time to time, at the
business location at which the books and records are maintained, after the
Closing Date, to such Tax data of each of the Transferred Subsidiaries and the
Sellers as Sellers or Buyer, as the case may be, may from time to time
reasonably request and shall furnish, and request the independent accountants
and legal
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counsel of Sellers, Buyer, or any Transferred Subsidiary to furnish to
Sellers or Buyer, as the case may be, such additional Tax and other information
and documents in the possession of such persons as Sellers or Buyer may from
time to time reasonably request.
(g) Timing of Indemnity Claims; Exclusive Remedy. Any claim for
indemnity under this Section 8.05 and with respect to any Taxes on Non-Filter
Business Transfers as provided in Section 8.05(c) must be made prior to sixty
(60) business days after the expiration of the applicable Tax statute of
limitations with respect to the relevant taxable period (including all
extensions obtained, whether automatic or permissive). The indemnities provided
for in Sections 8.05(a) and (c) together with the Sellers' obligations to file
Tax Returns and make payments pursuant to this Section 8.05 shall not duplicate
Sellers' obligations with respect to any breach of their representations set
forth in Section 4.22.
(h) Procedure for Indemnity Claims. The party seeking
indemnification or other payment pursuant to this Section 8.05 (Sellers or
Buyer, as the case may be) shall give the other party written notice of claim
for indemnification or payment, which notice shall include a calculation of the
amount of the requested indemnity or other payment and shall furnish to the
other party copies of all books, records and other
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information reasonably requested by the other party to the extent necessary to
substantiate such claim and verify the amount thereof. If reasonably necessary
in order to make or substantiate a claim (or to determine if a claim should be
made), each party shall be permitted reasonable access to the other party's
books, records and other information in connection therewith, provided that
neither party shall be required to provide the other party access to information
(such as the portion of any consolidated or combined Income Tax Return) which
includes information or data unrelated to the Transferred Subsidiaries (or in
the case of Sellers or Buyer, unrelated to the Filter Business). The party
requested to make any indemnity payment pursuant to this Section 8.05 shall
deliver to the party requesting payment, within twenty (20) business days after
receiving both the foregoing notice and all books, records and other information
reasonably requested by it, a detailed written statement ("Statement of
Objections") describing its objections (if any) thereto. The parties shall use
reasonable efforts to resolve any such objections, but if they do not obtain a
final resolution within twenty (20) business days (or any longer period mutually
agreed to by the parties) after the party requesting indemnification (or other
payment) has received the Statement of Objections, a Tax Settlement Auditor
(appointed
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pursuant to Section 8.05(i) shall resolve any remaining objections.
(i) Tax Settlement Auditor. If either party provides the other
party with a Statement of Objections with respect to any claim for
indemnification arising with respect to Taxes allocated to Sellers as provided
in Section 8.05(c) (other than with respect to Non-Filter Business Taxes), then
within ten (10) business days after receipt thereof, Buyer and Sellers shall
begin good faith negotiations to resolve such disagreement. If Buyer and Sellers
are able to resolve such disagreement within ten (10) business days after
receipt of the applicable Statement of Objections, the proposed claim for
indemnification shall be adjusted to reflect such resolution. If Buyer and
Seller are unable to resolve any disagreement concerning any claim for
indemnification pursuant to this Section 8.05 within ten (10) business days
after receipt of the applicable Statement of Objections, then Buyer and Sellers
shall jointly request an independent nationally recognized auditing firm
selected by the parties (the "Tax Settlement Auditor") to resolve any issue in
dispute as promptly as possible and shall cooperate with the Tax Settlement
Auditor to resolve such dispute. The fees and expenses of the Tax Settlement
Auditor shall be shared equally by Buyer and Sellers. The Tax Settlement Auditor
shall make a determination with respect to all disputed issues, which
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determination shall be set forth in a written report delivered to Buyer and
Sellers. If the Tax Settlement Auditor determines that the amount of Taxes
payable by Sellers with respect to all disputed issues is less than the amount
set forth with respect to such items in the Statement of Objections, the fees
and expenses of the Tax Settlement Auditor shall be paid by Buyer; otherwise
such fees and expenses shall be paid by Sellers. Except as determined to the
contrary by the appropriate taxing authority upon an audit of Tax Returns filed
by or on behalf of Sellers or any of the Transferred Subsidiaries, Buyer and
Buyer's affiliates (including the Transferred Subsidiaries) shall file all
applicable Tax Returns consistent with the Tax Settlement Auditor's
determination.
(j) Tax Related Adjustments. Seller and Buyer agree that any
indemnity payment made under this Agreement shall be made on an after-Tax basis
(which shall take into account any Tax benefit actually available to the
Indemnified Party as a result of the payment or accrual of the indemnified item)
and shall, to the extent permissible, be treated by the parties on their Tax
Returns as an adjustment to the Purchase Price.
8.06 Tax Allocation.
(a) The Final Purchase Price plus the U.S. dollar amount of the
Assumed Liabilities, shall be allocated to the assets purchased hereunder in
accordance with the rules of
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Section 1060 of the Code and Treasury Regulations thereunder. Such allocation
shall be set forth on Schedule 8.06 and shall be used by each party in preparing
any filings required pursuant to Section 1060 or any similar provisions of
state, local or foreign law and all relevant income and franchise tax returns.
In the event of any adjustment to the Final Purchase Price pursuant to Article 2
of this Agreement, Buyer and Seller shall jointly make any appropriate
adjustments to Schedule 8.06 to reflect such adjustment under Article 2.
(b) Buyer and Sellers agree that Buyer will make any election that
may be applicable under the provisions of Section 338 of the Code with respect
to any capital stock of any Foreign Subsidiary purchased under this Agreement.
(c) With respect to the purchase of the stock of GS Cosa Mesa (and
the indirect purchase of the stock of Facet USA), to the extent permitted by
applicable law, Buyer may elect to treat such purchases as the purchase of such
corporation's assets pursuant to Section 338 (but not Section 338(h)(10)) of the
Code. If Buyer so elects, notwithstanding anything herein to the contrary, all
Taxes which become payable as a result of such election shall be allocated to
(and be the responsibility of) Buyer.
8.07 Confidentiality. Each party hereto will hold and will cause its
directors, officers, employees, agents,
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consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all documents and information concerning
the other party furnished to it by such other party or its representatives in
connection with the transactions contemplated by this Agreement (except to the
extent that such information can be shown to have been: (a) previously lawfully
known by the party to which it was furnished, (b) in the public domain through
no fault of such party, or (c) later lawfully acquired from other sources by the
party to which it was furnished), and each party will not release or disclose
such information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement. If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained except to the extent such
information comes into the public domain through no fault of the party required
to hold it in confidence, and in any event such information shall not be used to
the detriment of, or in relation to any investment in, the other party and all
such documents (including copies thereof and software) shall be returned to the
other party immediately upon the written request of such other party.
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8.08 Cooperation Regarding Defined Benefit Plan Administration. Buyer
agrees to cooperate with Sellers and to cause each of the Transferred
Subsidiaries to cooperate with Sellers in connection with Mark IV's
administration as Sellers may reasonably request, after the Closing Date, of its
master defined benefit plan as applicable to Filter Participants.
8.09 Disposition of 401(k) Plan Assets.
(a) Certain employees of Sellers that are engaged in the Filter
Business and certain employees of the Transferred Subsidiaries have accumulated
funds for their retirement in an account which is maintained for the benefit of
such employees under the terms of the Mark IV Savings & Retirement Plan, a
master 401(k) plan maintained by Mark IV for certain of its employees (the
"Master 401(k) Plan"). For purposes of this Agreement, such employees are
referred to as 401(k) Filter Participants.
(b) As soon as practicable following the Closing, Mark IV shall
take such action as may reasonably be necessary to amend the Master 401(k) Plan
to provide that each Transferred Subsidiary employee who is a participant in the
Master 401(k) Plan shall have a one hundred percent (100%) vested interest in
his accrued benefit, if any, determined as of the Closing Date under the terms
of the Master 401(k) Plan.
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(c) As soon as practicable after the Closing Date, Mark IV shall
take such actions as may be necessary to permit distributions to 401(k) Filter
Participants of the full amount of their respective accrued benefits in the Mark
IV Savings & Retirement Plan as of the valuation date as provided in such plan
and to permit the rollover of such distributions, including outstanding loans,
to Buyers' 401(k) plan. The distributions to be made by Mark IV pursuant to this
section shall be made pursuant to the provisions of such plan and applicable
laws and Mark IV and Buyer shall cooperate with each other and make all
appropriate W-2 or other filings required under the Code and ERISA in connection
with such distributions.
8.10 Public Announcements. Buyer and Mark IV will consult with each
other before issuing any press releases or otherwise making any public
statements with respect to this Agreement or the transactions contemplated
hereby and shall not issue any press release or make any public statement
without the consent of the remaining party, except as may be required by law.
8.11 Employee Bonuses Due on Sale. Sellers agree to pay any bonuses
that may be due to any employee of the Filter Business as a result of the
closing of the transactions contemplated by this Agreement as described on
Schedule 8.11.
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8.12 Transfer Taxes and Expenses.
(a) Sellers shall bear and be responsible for all sales, use,
transfer, real property transfer or gain, VAT, recording or other similar
domestic or foreign taxes and fees ("Transfer Taxes") arising out of or in
connection with the transfer of any of the Assets and the transactions effected
pursuant to this Agreement to the extent such Transfer Taxes are (i) customarily
imposed on the seller in the jurisdiction in which such assets are located or
(ii) imposed as a result of the transactions contemplated in Section 6.08.
(b) Buyer shall bear and be responsible for all Transfer Taxes
arising out of or in connection with the transfer of any of the Assets and the
transactions effected pursuant to this Agreement to the extent such Transfer
Taxes are customarily imposed upon the buyer in the jurisdiction in which such
assets are located.
8.13 Title Insurance; Surveys. Buyer shall obtain at its expense any
title insurance coverage or updated surveys or the equivalent that Buyer may
request with respect to any Real Property.
8.14 Post-Closing Environmental Remediation. Sellers will, and will
cause any applicable affiliate of Sellers to, provide Buyer with reasonably
prompt advance notice (but in no event less than twenty (20) business days
advance notice) of any proposed action to be taken to control, remediate or
otherwise
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respond to any violation of Environmental Laws giving rise to Damages (as
hereinafter defined) against which Buyer or any of Buyer's affiliates is
entitled to be defended, indemnified or held harmless pursuant to
indemnification for the Excluded Liabilities set forth in Section 1.05(g) of
this Agreement, provided that in the event that Sellers or any applicable
affiliate of Sellers is compelled by a governmental entity to control, remediate
or otherwise respond to such violation within a time period shorter than such
notice period, notice shall be provided to Buyer as soon as reasonably
practicable under such circumstances. Buyer shall cooperate with Sellers in
providing reasonable access, personnel and any other reasonably required action
to permit such control or remediation of environmental matters to be undertaken
and completed. If Buyer shall determine that the proposed action is not
appropriate and Buyer, on the one hand, and Sellers or the applicable affiliate
of Sellers, on the other, are not able to agree on the appropriate action to be
taken, the parties will submit the dispute to a mutually acceptable
environmental expert, whose determination shall be final and binding on the
parties. For purposes of determining the amount of any Damages and for purposes
of determining which actions should be undertaken to control, remediate or
otherwise respond to any violation of any Environmental Laws, the parties agree
that the action to be
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taken to control, remediate or otherwise respond to any violation of any
Environmental Laws shall, in the aggregate, be effected on a cost-effective
basis.
8.15 Post-Closing Cooperation. After the Closing, without further
consideration: (a) Sellers shall take all such further actions and execute,
acknowledge and deliver all such further consents and other documents as Buyer
may reasonably request to facilitate or effect the transactions contemplated by
this Agreement; and (b) Buyer shall, and shall cause each of the Transferred
Subsidiaries, to take all such further actions and execute, acknowledge and
deliver all such further consents and other documents as Sellers may reasonably
request in order to facilitate the transactions contemplated by this Agreement.
ARTICLE 9 CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS
The obligation of Sellers to enter into and complete the Closing is
subject to the fulfillment of the following conditions, any one of more of which
may be waived:
9.01 Representations and Covenants.
(a) The representations and warranties of Buyer contained in this
Agreement shall be true and correct on and as
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of the Closing Date with the same force and effect as though made on and as of
the Closing Date.
(b) Buyer shall have performed and complied with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Closing Date.
(c) Buyer shall have delivered to Seller a certificate, dated the
Closing Date and signed by an officer of Buyer, to the foregoing effect and
stating that all conditions to the obligations of Sellers hereunder have been
satisfied.
9.02 Government Consents; Filings. All consents, approvals,
authorizations, filings and registrations required to be obtained or made under
applicable law in connection with the closing of the transactions contemplated
by this Agreement from any foreign or domestic governmental agency or authority
shall have been obtained or made and shall be in full force and effect, the
waiting period under the HSR Act shall have expired and no conditions to the
transactions contemplated by this Agreement shall have been imposed or proposed
by any federal, state or foreign governmental agency.
9.03 Third Party Consents. All consents and approvals that may be
required from any parties to those Filter Business Contracts more particularly
set forth in Schedule 9.03 attached hereto shall have been obtained, it being
understood that
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certain consents and approvals to Filter Business Contracts with United States
or foreign governmental agencies may not be obtainable until after the Closing
Date.
9.04 Bonds or Letters of Credit. Buyer shall deliver to Sellers with
respect to outstanding bonds and letters of credit satisfactory evidence that
Buyer has complied with the provisions of Section 7.03 of this Agreement.
9.05 Litigation. No action, suit or proceeding which seeks to restrain,
modify or prevent the carrying out of the transactions contemplated hereby or
which seeks damages or a discovery order in connection with such transactions
shall have been instituted before any court or U.S. or foreign governmental or
regulatory body, or instituted or threatened by any U.S. or foreign governmental
or regulatory body.
9.06 Facet License Agreement. Buyer shall have delivered to
Sellers a duly executed copy of the Facet License Agreement.
9.07 Certificate of Buyer. Sellers shall have received a certificate of
the Secretary or Assistant Secretary of Buyer, dated the Closing Date setting
forth the resolutions of the Board of Directors of Buyer authorizing the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and certifying that such resolutions were duly
adopted and have not been rescinded or amended as of the Closing Date.
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ARTICLE 10 CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER
The obligation of Buyer to enter into and complete the Closing is
subject to the fulfillment, on or prior to the Closing Date, of the following
conditions, any one or more of which may be waived by it:
10.01 Representations and Covenants.
(a) The representations and warranties of Sellers contained in
this Agreement shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date.
(b) Sellers shall have performed and complied with all covenants
and agreements required by this Agreement to be performed or complied with by
Sellers on or prior to the Closing Date.
(c) Sellers shall have delivered to Buyer a certificate, dated the
Closing Date and signed by a duly authorized officer of Mark IV, to the
foregoing effect, stating that all conditions to Buyer's obligations hereunder
have been satisfied.
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10.02 Government Consents; Filings. All consents, approvals,
authorizations, filings and registrations required to be obtained or made under
applicable law in connection with the closing of transactions contemplated by
this Agreement from any domestic or foreign governmental agency or authority
shall have been made and shall be in full force and effect, the waiting period
under the HSR Act or any applicable foreign law shall have expired and no
conditions to the transactions contemplated by this Agreement shall have been
imposed or proposed by any federal, state or foreign governmental agency.
10.03 Third Party Consents. All consents and approvals that may be
required from any parties to those Filter Business Contracts more particularly
set forth in Schedule 10.03 attached hereto shall have been obtained, it being
understood that certain consents and approvals to Filter Business Contracts with
United States or foreign governmental agencies may not be obtainable until after
the Closing Date.
10.04 Litigation. No action, suit or proceeding which seeks to
restrain, modify or prevent the carrying out of the transactions contemplated
hereby or which seeks damages or a discovery order in connection with such
transaction shall have been instituted before any court or U.S. or foreign
governmental or regulatory body, or instituted or threatened by any U.S. or
foreign governmental or regulatory body, and no suit, action or
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proceeding shall have been instituted or threatened by any person, firm,
corporation or other entity against any of the Sellers or Transferred
Subsidiaries before any court or U.S. or foreign governmental body which, if
adversely determined against any of the Sellers or Transferred Subsidiaries,
would have a Material Adverse Effect on the Assets or the business and financial
condition of the Filter Business.
10.05 Certificate as to Authorization. Buyer shall have received a
certificate of the Secretary or an Assistant Secretary of each of the Sellers,
setting forth resolutions of the Boards of Directors of each such Seller
authorizing the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, certifying that such resolutions were duly
adopted and have not been rescinded or amended as of the Closing Date, and
certifying that approval by the shareholders of each such Seller is not
required, or has been obtained, in connection with this Agreement or the
transactions contemplated hereby.
ARTICLE 11 SURVIVAL OF REPRESENTATIONS; INDEMNIFICATIONS
11.01 Survival of Representations. Except for the representations and
warranties made by Sellers pursuant to
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Sections 4.04, 4.11, 4.12(b) and 4.22 hereof, all representations and warranties
of Sellers contained in Article 4 and all representations and warranties of
Buyer contained in Article 5 shall survive for a period of two (2) years after
the Closing Date. The representations and warranties made by Sellers pursuant to
Sections 4.04, 4.11 and 4.12(b) hereof (hereinafter the "Title Warranties")
shall survive for a period of ten (10) years following the Closing Date, and the
representations and warranties made by Sellers pursuant to Section 4.22 hereof
(hereinafter the "Tax Warranties") shall survive for a period extending sixty
(60) days after the expiration of the applicable statute of limitations with
respect to any taxes referred to therein.
11.02 Statements as Representations. All statements contained in any
Schedule delivered pursuant to Article 4 or Article 5 hereof shall be deemed
representations and warranties within the meaning of Sections 9.01, 10.01 and
11.01 hereof.
11.03 Indemnification by Sellers. Subject to the terms and conditions
of this Section, each of the Sellers, jointly and severally, agrees to
indemnify, defend and hold harmless Buyer and any parent, subsidiary or
affiliate companies of Buyer, including, without limitation, each of the
Transferred Subsidiaries (hereinafter the "Buyer Companies"), from and against
all demands, claims, actions or causes of action,
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assessments, payments, losses, damages, liabilities, environmental clean-up,
restoration and natural resource damages costs, costs and expenses, including,
without limitation, interest, penalties and reasonable attorneys' fees and
expenses (collectively "Damages") asserted against, resulting to, imposed upon
or incurred by the Buyer Companies or any member thereof, by reason of or
resulting from:
(a) any costs, expenses or liabilities (including Taxes) of
Sellers or any of the Transferred Subsidiaries arising out of or relating (i) to
the Non-Filter Businesses or any other activities unrelated to the conduct of
the Filter Business; or (ii) the transfers of the Non-Filter Businesses and
other transactions referred to in Section 6.08;
(b) any liabilities of Sellers or any of the Transferred
Subsidiaries which are Excluded Liabilities;
(c) any liabilities of any of the Transferred Subsidiaries to any
of its officers and directors who have resigned pursuant to the provisions of
this Agreement and who do not continue in the employment of the Transferred
Subsidiaries immediately after the Closing Date;
(d) any liabilities for payment to current or former employees of
any of the Transferred Subsidiaries of pension benefits payable to such
employees under the terms of the Master
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Defined Benefit Plan or of retirement benefits payable to such employees under
the terms of the Master 401(k) Plan;
(e) any breach by any of the Sellers or the Transferred
Subsidiaries of any of their respective covenants contained herein;
(f) any breach of any of the Title Warranties or the Tax
Warranties; and
(g) a breach of any representation or warranty of Sellers (other
than the Title Warranties and the Tax Warranties) contained in or made pursuant
to this Agreement.
For purposes of this Agreement, the claims described in Section
11.03(a) through and including Section 11.03(g) and Section 11.04(a), (b) and
(c) shall be referred to individually as a "Claim" and collectively as "Claims".
The obligation of Sellers to indemnify and hold Buyer harmless from and
against any Damages incurred as a result of Claims described in Sections
11.03(a) through and including 11.03(f) hereof shall apply with respect to the
full amount of any and all Damages incurred by Buyer and the Buyer Companies as
a result of such Claims.
With respect to Damages incurred by Buyer or any member of the Buyer
Companies and arising from any Claim or Claims described in Section 11.03(g)
hereof, Sellers shall have no liability or obligation to indemnify and hold
Buyer or any
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<PAGE> 142
member of the Buyer Companies harmless from any Damages incurred by Buyer or any
member of the Buyer Companies except to the extent that the aggregate amount of
the Damages incurred by Buyer and the Buyer Companies arising from any such
Claim or from all prior Claims described solely in Section 11.03(g) hereof,
exceeds One Million Five Hundred Thousand Dollars ($1,500,000) and then, only to
the extent that the amount of such Damages exceeds One Million Five Hundred
Thousand Dollars ($1,500,000).
Notwithstanding anything to the contrary contained in this Section
11.03, Sellers shall have no obligation to indemnify Buyer or the Buyer
Companies with respect to any Damages incurred as a result of Claims described
in Section 11.03(g) hereof to the extent that the aggregate amount of the
Damages incurred by Buyer or the Buyer Companies with respect to the Claims
described solely in Section 11.03(g) hereof exceeds an amount equal to the
Twenty Five Million Dollars ($25,000,000).
11.04 Indemnification by Buyer. Buyer hereby agrees to indemnify,
defend and hold harmless Sellers and any parent, subsidiary or affiliate
companies of Sellers (the "Seller Companies") from any Damages arising by reason
of or resulting from:
(a) any claim made against Sellers or any member of the Seller
Companies relating to the Assumed Liabilities;
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<PAGE> 143
(b) any claim made against Sellers or any member of the Seller
Companies relating to the conduct of the Filter Business after the Closing Date;
and
(c) any breach of any representation or warranty of Buyer made
pursuant to this Agreement.
(d) The Buyer's obligation to indemnify and hold the Sellers
harmless from and against any Damages incurred as a result of Claims described
in Sections 11.04(a) and (b) hereof shall apply with respect to the full amount
of any and all Damages incurred by any of the Sellers and the Seller Companies
as a result of such Claims.
(e) With respect to Damages incurred by any of the Sellers or any
member of the Seller Companies and arising from any claim or claims described
solely in Section 11.04(c) hereof, Buyer shall have no liability or obligation
to indemnify and hold Seller or any member of the Seller Companies harmless from
any Damages incurred by Sellers or any member of the Seller Companies except to
the extent that the aggregate amount of the Damages incurred by Sellers and the
Seller Companies arising from any such Claim or Claims described solely in
Section 11.04(c) hereof, exceeds One Million Five Hundred Thousand Dollars
($1,500,000) and then, only to the extent that the amount of such excess exceeds
One Million Five Hundred Thousand Dollars ($1,500,000) of Damages.
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(f) Notwithstanding anything to the contrary contained in this
Section 11.04, Buyer shall have no obligation to indemnify Sellers or the Seller
Companies with respect to any Damages incurred solely as a result of Claims
described in Section 11.04(c) hereof to the extent that the aggregate amount of
the Damages incurred by Sellers or the Seller Companies with respect to the
Claims described solely in Section 11.04(c) hereof exceeds Twenty Five Million
Dollars ($25,000,000).
11.05 Conditions of Indemnification. The obligations and liabilities of
Sellers under Section 11.03 hereof and the obligations and liabilities of Buyer
under Section 11.04 hereof with respect to Claims relating to third parties
shall be subject to the following terms and conditions:
(a) A party seeking indemnification under this Agreement
("Indemnified Party") will give the party required to provide such
indemnification (the "Indemnifying Party") prompt notice of any such Claim, and
thereafter, provided that the Indemnifying Party acknowledges in writing to the
Indemnified Party that the Indemnifying Party is obligated to indemnify the
Indemnified Party against such Claim, the Indemnifying Party will be permitted
to undertake the defense thereof by representatives chosen by it. The failure of
the Indemnified Party to provide any such notice shall not excuse the
Indemnifying Party from its obligations hereunder, provided
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that, the amount of the Damages which the Indemnified Party shall be entitled to
be indemnified against shall be reduced by any Damages incurred by the
Indemnifying Party as a result of the Indemnified Party's failure to provide
notice.
(b) If the Indemnifying Party, within a reasonable time after
notice of any such Claim (not to exceed thirty (30) days), fails to acknowledge
in writing its obligation to indemnify the Indemnified Party with respect to
such Claim or fails to diligently prosecute or settle such Claim, the
Indemnified Party will 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
participate at its expense in the defense of such Claim at any time prior to
settlement, compromise or final determination thereof.
(c) Anything in this Section 11.05 to the contrary
notwithstanding: (i) if there is a reasonable probability that a Claim may
materially and adversely affect an Indemnified Party other than as a result of
money damages or other money payments, the Indemnified Party shall have the
right, at its own cost and expense, to defend, and with the consent of the
Indemnifying Party, to compromise or settle such Claim; and (ii) the
Indemnifying Party shall not, without the written consent of the Indemnified
Party, its successors and assigns, settle or
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<PAGE> 146
compromise any Claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party, of a release from all liability in respect
of such Claim.
11.06 Termination of Indemnification Obligations.
(a) The obligations to indemnify and hold harmless a party hereto:
(i) contained in Sections 11.03(f) or 11.03(g) and Section 11.04(c) shall
terminate when the applicable representation or warranty terminates pursuant to
Section 11.01; and (ii) contained in the provisions of Sections 11.03(a) through
and including 11.03(e) or Sections 11.04(a) and (b) shall not terminate;
provided that, as to clause (i) above, such obligations to indemnify and hold
harmless shall not terminate with respect to any representation or warranty with
respect to which the Indemnified Party shall have, prior to the termination of
such representation or warranty, made a specific Claim relating to a breach of
such representation or warranty by delivering written notice (stating in
reasonable detail the basis of such Claim) to the Indemnifying Party.
(b) Buyer shall have no right to be indemnified against any breach
of a representation or warranty made by Sellers pursuant to this Agreement to
the extent that, on the Closing Date, Buyer had knowledge that, as of the
Closing Date, there was a material breach, violation or inaccuracy in such
140
<PAGE> 147
representation or warranty as made by Seller pursuant to Article 4 hereof, the
existence of which material breach, violation or inaccuracy is not disclosed in
writing by Buyer to Sellers on or prior to the Closing Date.
11.07 Litigation Cooperation.
(a) The Sellers shall cooperate with the Buyer and each of the
Transferred Subsidiaries and shall cause their respective officers, employees,
agents, auditors and representatives to cooperate with the Buyer and each of the
Transferred Subsidiaries in connection with the investigation, prosecution,
defense and settlement of any judicial or administrative proceeding or claim
which Buyer or any of the Transferred Subsidiaries has undertaken the defense of
in connection with the Buyer's obligation to indemnify the Sellers as provided
for in Section 11.04 above; provided that the Buyer shall reimburse the Sellers
and its officers, employees, agents, auditors and representatives for the
reasonable out-of-pocket costs and expenses incurred in providing such
assistance.
(b) The Buyer shall cooperate with the Sellers and shall cause its
officers, employees, agents, auditors and representatives to cooperate with the
Sellers in connection with the investigation, prosecution, defense and
settlement of any judicial or administrative proceeding or claim which Sellers
have undertaken the defense of in connection with the obligation
141
<PAGE> 148
of Sellers to indemnify the Buyer as provided for in Section 11.03 above;
provided that the Sellers shall reimburse the Buyer and its officers, employees,
agents, auditors and representatives for the reasonable out-of-pocket costs and
expenses incurred in providing such assistance.
11.08 Environmental Claim. Sellers acknowledge that their indemnity
obligation for Excluded Liabilities covered by Section 1.05(g) shall include all
costs to correct any waste handling, waste storage or wastewater treatment
equipment that, as of the Closing Date, is a continuing source of release of
Regulated Materials to the environment, and that Buyer shall not be liable for
any additional release of Regulated Materials on or after the Closing Date to
the extent that such additional release is attributable to defects in such
equipment or facilities existing on the Closing Date.
11.09 Remedies Cumulative. Except as herein expressly provided, the
remedies provided herein shall be cumulative and shall not preclude assertion by
any party hereto of any other rights or the seeking of any other remedies
against any other party hereto.
ARTICLE 12 MISCELLANEOUS PROVISIONS
12.01 Termination.
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<PAGE> 149
(a) This Agreement may be terminated at any time prior to the
Closing without any liability on the part of either Buyer or Sellers:
(i) by mutual consent of Mark IV and Buyer;
(ii) by Buyer in the event of any material breach by Sellers
of any of Sellers' agreements, representations or warranties contained
herein and the failure of Sellers to cure such breach within seven days
after receipt of notice from Buyer requesting such breach to be cured;
and
(iii) by Sellers in the event of any material breach by Buyer
of any of Buyer's agreements, representations or warranties contained
herein and the failure of Buyer to cure such breach within seven days
after receipt of notice from Sellers requesting such breach to be
cured.
(b) Any party desiring to terminate this Agreement pursuant to
this Section 12.01 shall give notice of such termination to the other parties to
this Agreement.
(c) In the event that this Agreement shall be terminated pursuant
to this Section 12.01, all further obligations of the parties under this
Agreement (other than Sections 8.07 and 8.10) shall be terminated without
further liability of any party to the other, provided that nothing
143
<PAGE> 150
herein shall relieve any party from liability for its willful breach of this
Agreement.
12.02 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented only by written agreement of
the parties hereto at any time with respect to any of the terms contained
herein.
12.03 Waiver of Compliance. Any failure of Sellers, on the one hand, or
Buyer, on the other, to comply with any obligation, covenant, agreement or
condition herein may be expressly waived in writing by the Chairman, President
or a Vice President of Buyer or Mark IV, 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.
12.04 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given: (a) if delivered by hand when delivered; (b) if
by telex, telecopy, cable or overnight delivery, when received, or (c) if by
mail, five (5) days after being mailed, certified or registered mail, with
postage prepaid:
If to Sellers, to:
Mark IV Industries, Inc.
One Towne Centre
501 John James Audubon Parkway
Amherst, NY 14228
Attention: John J. Byrne
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<PAGE> 151
with a copy to:
Gerald S. Lippes, Esq.
Lippes, Silverstein, Mathias & Wexler LLP
700 Guaranty Building
28 Church Street
Buffalo, New York 14202
or to such other person or address as Mark IV shall furnish to Buyer in writing.
If to Buyer, to:
CLARCOR Inc.
2323 Sixth Street
Rockford, Illinois 61125
Attention: Bruce Klein, Chief Financial Officer
with a copy to:
David J. Boyd, Esq.
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
or to such other person or address as Buyer shall furnish to Mark IV in writing.
12.05 Certain Terms. For purposes of this Agreement:
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<PAGE> 152
(a) the term "knowledge" with respect to Sellers and the
Transferred Subsidiaries means the actual knowledge of those persons identified
in Schedule 12.05 attached hereto.
(b) the term "Material Adverse Effect" means a material adverse
change in the financial condition, results of operations, business, assets,
earnings or revenues of the Filter Business taken as a whole.
12.06 Assignment. 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 any of
the parties hereto without the prior written consent of the other parties.
12.07 Governing Law and Jurisdiction. This Agreement and the legal
relations among the parties hereto shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to its
conflicts of law doctrine.
12.08 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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<PAGE> 153
12.09 Headings. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
12.10 Entire Agreement. This Agreement, including the Exhibits hereto,
the Schedules hereto and the other documents and certificates delivered pursuant
to the terms hereof, sets forth the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein, and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto.
12.11 Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or corporation other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
12.12 Severability. The invalidity or illegality of any provision,
term, or agreement contained in or made a part of this Agreement shall not
affect the validity of the remainder of this Agreement.
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<PAGE> 154
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be affixed hereto, all as
of the day and year first above written.
SELLERS:
MARK IV INDUSTRIES, INC.
By: /s/ John J. Byrne
-----------------------------------------
Title: Vice President - Finance
--------------------------------------
and Chief Financial Officer
--------------------------------------
FACET HOLDING CO., INC.
By: /s/ John J. Byrne
-----------------------------------------
Title: Vice President
--------------------------------------
PUROLATOR PRODUCTS AIR FILTRATION COMPANY
By: /s/ John J. Byrne
-----------------------------------------
Title: Vice President
--------------------------------------
GEORGE W. DAHL COMPANY, INC.
By: /s/ John J. Byrne
-----------------------------------------
Title: Vice President
--------------------------------------
MANTRONICS LIMITED
By: /s/ John J. Byrne
-----------------------------------------
Title: Vice President
--------------------------------------
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BUYER:
CLARCOR INC.
By: /s/ Bruce A. Klein
-----------------------------------------
Title: Vice President
--------------------------------------
149
<PAGE> 1
EXHIBIT 4
U.S. $185,000,000
MULTICURRENCY CREDIT AGREEMENT
dated as of
September 9, 1999
among
CLARCOR INC.,
THE GUARANTORS PARTY HERETO,
THE BANKS PARTY HERETO,
FIRSTAR BANK MILWAUKEE, NATIONAL ASSOCIATION,
as agent,
and
BANK ONE, ILLINOIS, NA
and
AMCORE BANK N.A.
as co-agents
<PAGE> 2
TABLE OF CONTENTS
(This Table of Contents is not part of the Agreement)
Section Page
- ------- ----
1. The Committed Facility ................................................
1.1. The Revolving Credit Commitments .............................
1.2. Letters of Credit ............................................
(a) General Terms ...........................................
(b) Applications ............................................
(c) The Reimbursement Obligations ...........................
(d) The Participating Interests .............................
(e) Indemnification .........................................
1.3. Applicable Interest Rates ....................................
(a) Domestic Rate Loans .....................................
(b) Eurocurrency Loans ......................................
(c) Applicable Margin .......................................
(d) Alternative Currencies ..................................
(e) Rate Determinations .....................................
1.4. Minimum Borrowing Amounts.....................................
1.5. Manner of Borrowing Committed Revolving Loans and Designating
Interest Rates Applicable to Committed Revolving Loans .......
(a) Notice to the Agent .....................................
(b) Notice to the Banks .....................................
(c) Borrower's Failure to Notify ............................
(d) Disbursement of Committed Revolving Loans ...............
(e) Agent Reliance on Bank Funding ..........................
2. The Swing Line ........................................................
2.1. Swing Loans ..................................................
2.2. Interest on Swing Loans ......................................
2.3. Requests for Swing Loans .....................................
2.4. Conversion of Swing Line Loans into Revolving Credit
Loans ......................................................
i
<PAGE> 3
3. General Provisions Applicable to All Loans ............................
3.1. Interest Periods .............................................
3.2. Maturity of Loans ............................................
3.3. Prepayments ..................................................
(a) Committed Revolving Loans ...............................
(b) Swing Loans .............................................
(c) Mandatory Prepayments ...................................
3.4. Default Rate .................................................
3.5. The Notes ....................................................
3.6. Funding Indemnity ............................................
3.7. Commitment Terminations ......................................
4. Fees...................................................................
4.1. Commitment Fee ...............................................
4.2. Letter of Credit Fees ........................................
4.3. Closing Fee ..................................................
4.4. Other Fees ...................................................
4.5. Fee Calculations .............................................
5. Place and Application of Payments .....................................
6. Definitions; Interpretation ...........................................
6.1. Definitions ..................................................
6.2. Interpretation ...............................................
7. Representations and Warranties ........................................
7.1. Corporate Organization and Authority .........................
7.2. Subsidiaries .................................................
7.3. Corporate Authority and Validity of Obligations ..............
7.4. Financial Statements .........................................
7.5. No Litigation; No Labor Controversies ........................
7.6. Taxes ........................................................
7.7. Approvals ....................................................
7.8. ERISA ........................................................
7.9. Government Regulation ........................................
7.10. Margin Stock .................................................
7.11. Licenses and Authorizations: Compliance with
Environmental and Health Laws .............................
7.12. Ownership of Property; Liens .................................
7.13. No Burdensome Restrictions: Compliance with
Agreements ...................................................
7.14. Full Disclosure ..............................................
ii
<PAGE> 4
7.15. Year 2000 ....................................................
8. Conditions Precedent ..................................................
8.1. Initial Credit Event .........................................
8.2. All Credit Events ............................................
9. Covenants .............................................................
9.1. Corporate Existence; Subsidiaries ............................
9.2. Maintenance ..................................................
9.3. Taxes ........................................................
9.4. ERISA ........................................................
9.5. Insurance ....................................................
9.6. Financial Reports and Other Information ......................
9.7. Bank Inspection Rights .......................................
9.8. Conduct of Business ..........................................
9.9. Liens ........................................................
9.10. Use of Proceeds; Regulation U ................................
9.11. Sales and Leasebacks .........................................
9.12. Mergers, Consolidations and Sales of Assets ..................
9.13. Use of Property and Facilities; Environmental and Health
and Safety Laws .........................................
9.14. Investments, Acquisitions, Loans, Advances and Guaranties ....
9.15. Consolidated Net Worth .......................................
9.16. Leverage Ratio ...............................................
9.17. Debt to Capitalization Ratio .................................
9.18. Interest Coverage Ratio ......................................
9.19. Dividends and Other Shareholder Distributions ................
9.20. Subsidiary Debt...............................................
9.21. Transactions with Affiliates..................................
9.22. Compliance with Laws .........................................
9.23. Change in Fiscal Year ........................................
9.24. Year 2000 ....................................................
9.25. Mark IV Acquisition ..........................................
9.26 Priority Debt ................................................
10. Events of Default and Remedies ........................................
10.1. Events of Default ............................................
10.2. Nonbankruptcy Defaults .......................................
10.3. Bankruptcy Defaults ..........................................
10.4. Collateral for Undrawn Letters of Credit .....................
10.5. Notice of Default ............................................
10.6. Expenses .....................................................
iii
<PAGE> 5
11. Change in Circumstances ...............................................
11.1. Change of Law ................................................
11.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR .....................................
11.3. Increased Cost and Reduced Return ............................
11.4. Lending Offices ..............................................
11.5. Discretion of Bank as to Manner of Funding ...................
12. The Agent and the Co-Agents ...........................................
12.1. Appointment and Authorization of Agent .......................
12.2. Agent and its Affiliates .....................................
12.3. Action by Agent ..............................................
12.4. Consultation with Experts ....................................
12.5. Liability of Agent; Credit Decision ..........................
12.6. Indemnity ....................................................
12.7. Resignation of Agent and Successor Agent .....................
12.8 Co-Agents ....................................................
13. The Guarantees ........................................................
13.1. The Guarantees ...............................................
13.2. Guarantee Unconditional ......................................
13.3. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances ........................................
13.4. Waivers ......................................................
(a) General .................................................
(b) Subrogation and Contribution ............................
13.5. Limit on Recovery ............................................
13.6. Stay of Acceleration .........................................
14. Miscellaneous .........................................................
14.1. Withholding Taxes ............................................
(a) Payments Free of Withholding ............................
(b) U.S. Withholding Tax Exemptions . .......................
(c) Inability of Bank to Submit Forms .......................
14.2. No Waiver of Rights ..........................................
14.3. Nonbusiness Day ..............................................
14.4. Documentary Taxes ............................................
14.5. Survival of Representations ..................................
14.6. Survival of Indemnities ......................................
14.7. Sharing of Set-Off ...........................................
14.8. Notices ......................................................
iv
<PAGE> 6
14.9. Counterparts .................................................
14.10. Successors and Assigns .......................................
14.11. Participants .................................................
14.12. Assignment Agreements ........................................
14.13. Amendments ...................................................
1414. Headings .....................................................
14.15. Legal Fees, Other Costs and Indemnification ..................
14.16. Set Off ......................................................
14.17. Currency .....................................................
14.18 Confidentiality ..............................................
14.19. Entire Agreement .............................................
14.20. Governing Law ................................................
14.21. Submission to Jurisdiction: Waiver of Jury Trial .............
v
<PAGE> 7
EXHIBITS
A - Form of Committed Revolving Loan Note
B - Form of Swing Line Note
C - Form of Notice of Payment Request
D - Form of Compliance Certificate
E - Form of Subsidiary Guarantee Agreement
F - Form of Opinion of Counsel
G Form of Assignment and Assumption Agreement
SCHEDULE 1.2
(Standby) Form of Application for Standby Letters of Credit
SCHEDULE 1.2
(Commercial) Form of Application for Commercial Letter of Credit
SCHEDULE 7.2 Subsidiaries
SCHEDULE 9.9 Permitted Liens
i
<PAGE> 8
CREDIT AGREEMENT
To each of the Banks party hereto:
The undersigned, CLARCOR Inc., a Delaware corporation (the "Borrower"),
applies to you for your several commitments, subject to all the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, to make available a revolving credit for loans and
letters of credit (the "Revolving Credit") and a swing line credit (the "Swing
Line") as described herein. Each of you is hereinafter referred to individually
as a "Bank," all of you are hereinafter referred to collectively as the "Banks,"
and Firstar Bank Milwaukee, National Association in its capacity as agent for
the Banks hereunder is hereinafter referred to as the "Agent" and Bank One,
Illinois, NA and Amcore Bank N.A., in their capacity as co-agents for the Banks
are hereinafter referred to individually as a "Co-Agent" and collectively as the
"Co-Agents."
1. The Committed Facility.
1.1. The Revolving Credit Commitments. Subject to the terms
and conditions hereof, each Bank, by its acceptance hereof, severally agrees to
make a loan or loans (individually a "Committed Revolving Loan" and collectively
"Committed Revolving Loans") to the Borrower from time to time on a revolving
basis in U.S. Dollars and Alternative Currencies in an aggregate outstanding
Original Dollar Amount up to the amount of its revolving credit commitment set
forth on the applicable signature page hereof (its "Revolving Credit Commitment
and, cumulatively for all the Banks, the "Revolving Credit Commitments"),
subject to any reductions thereof pursuant to the terms hereof, before the
Revolving Credit Termination Date. The sum of the aggregate Original Dollar
Amount of all Loans (whether Committed Revolving Loans or Swing Loans) and of
L/C Obligations at any time outstanding shall not exceed the Revolving Credit
Commitments in effect at such time. Each Borrowing of Committed Revolving Loans
shall be made ratably from the Banks in proportion to their respective
Percentages. As provided in Section 1.5(a) hereof, the Borrower may elect that
each Borrowing of Committed Revolving Loans denominated in U.S. Dollars be
either Domestic Rate Loans or Eurocurrency Loans. All Loans denominated in an
Alternative Currency shall be Eurocurrency Loans. Committed Revolving Loans may
be repaid and the principal amount thereof reborrowed before the Revolving
Credit Termination Date, subject to all the terms and conditions hereof. On the
Revolving Credit Termination Date, the principal amount of, and all accrued and
unpaid interest on,
<PAGE> 9
the Loans and L/C Obligations, and all other amounts owed by the Borrower
hereunder and under the other Credit Documents shall be immediately due and
payable.
1.2. Letters of Credit.
(a) General Terms. Subject to the terms and conditions hereof,
as part of the credit available under the Revolving Credit Commitments, the
Issuing Bank shall issue standby or commercial letters of credit (each a "Letter
of Credit") for the Borrower's account in U.S. Dollars in an aggregate undrawn
face amount up to the amount of the L/C Limit, provided that the aggregate L/C
Obligations at any time outstanding shall not exceed the difference between the
Revolving Credit Commitments in effect at such time and the aggregate Original
Dollar Amount of all Loans (whether Committed Revolving Loans or Swing Loans)
then outstanding. Each Letter of Credit shall be issued by the Issuing Bank, but
each Bank shall be obligated to reimburse the Issuing Bank for such Bank's
Percentage of the amount of each drawing thereunder and, accordingly, the
undrawn face amount of each Letter of Credit shall constitute usage of the
Revolving Credit Commitment of each Bank pro rata in accordance with each Bank's
Percentage.
(b) Applications. At any time before the Revolving Credit
Termination Date, the Issuing Bank shall, at the request of the Borrower, issue
one or more Letters of Credit, in a form satisfactory to the Issuing Bank, with
expiration dates no later than the earlier of (i) twelve (12) calendar months
from the date of issuance (or be cancelable not later than twelve (12) calendar
months from the date of issuance or renewal) or (ii) the Revolving Credit
Termination Date, in an aggregate face amount as set forth above, upon the
receipt of a duly executed application for the relevant Letter of Credit in the
form customarily prescribed by the Issuing Bank for the type of Letter of
Credit, whether standby or commercial, requested (each an "Application"). The
current forms of the Issuing Bank's Applications are attached as Schedule 1.2
(Standby) and Schedule 1.2 (Commercial) hereto. The Issuing Bank shall provide
the Borrower and each Bank with copies of any new form of Application that may,
from time to time, be adopted by the Issuing Bank. Notwithstanding anything
contained in any Application to the contrary: (i) the Borrower's obligation to
pay fees in connection with each Letter of Credit shall be as exclusively set
forth in Section 4.1(b) hereof, (ii) before the occurrence of a Default or an
Event of Default, the Issuing Bank will not call for the funding by the Borrower
of any amount under a Letter of Credit, or any other form of collateral security
for the Borrower's obligations in connection with such Letter of Credit, before
being presented with a drawing thereunder, (iii) if the Issuing Bank is not
timely reimbursed for the amount of any
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<PAGE> 10
drawing under a Letter of Credit on the date such drawing is paid, the
Borrower's obligation to reimburse the Issuing Bank for the amount of such
drawing shall bear interest (which the Borrower hereby promises to pay) from and
after the date such drawing is paid at a rate per annum equal to the sum of 2%
plus the Applicable Margin for Domestic Rate Loans plus the Domestic Rate from
time to time in effect and (iv) if there is any inconsistency between the terms
of an Application and the terms of this Agreement, this Agreement shall govern.
The Issuing Bank will promptly notify the Banks of each issuance by it of a
Letter of Credit. If the Issuing Bank issues any Letters of Credit with
expiration dates that are automatically extended unless the Issuing Bank gives
notice that the expiration date will not so extend beyond its then scheduled
expiration date, the Issuing Bank will give such notice of nonrenewal before the
time necessary to prevent such automatic extension if before such required
notice date: (i) the expiration date of such Letter of Credit if so extended
would be after the Revolving Credit Termination Date, (ii) the Revolving Credit
Commitments have been terminated or (iii) an Event of Default exists and the
Required Banks have given the Issuing Bank instructions not to so permit the
extension of the expiration date of such Letter of Credit. The Issuing Bank
agrees to issue amendments to the Letter(s) of Credit increasing the amount, or
extending the expiration date, thereof at the request of the Borrower subject to
the conditions of Section 8 and the other terms of this Section 1.2.
(c) The Reimbursement Obligations. The Issuing Bank shall
notify the Borrower of each drawing under a Letter of Credit. Subject to Section
1.2(b) hereof, the obligation of the Borrower to reimburse the Issuing Bank for
all drawings under a Letter of Credit (a "Reimbursement Obligation") shall be
governed by the Application related to such Letter of Credit, except that (i)
reimbursement of each drawing shall be made in immediately available funds at
the Issuing Bank's principal office in Milwaukee, Wisconsin by no later than
Noon (Milwaukee time) on the date when such drawing is paid (the "Honor Date")
and (ii) if the Borrower fails to reimburse the Issuing Bank for the full amount
of a drawing under a Letter of Credit by Noon (Milwaukee time) on the Honor
Date, [x] the Borrower shall, unless the Revolving Credit Commitments have
terminated, be deemed to have requested Committed Revolving Loans consisting of
Domestic Rate Loans from the Banks in the aggregate amount equal to the
unreimbursed amount of such drawing and [y] the Issuing Bank shall, by 1:30 p.m.
(Milwaukee time) on the Honor Date, notify the Agent and each Bank of the
aggregate amount of the Committed Revolving Loans to be made on such date. In
the event of such a Borrowing, each Bank shall fund its Percentage of such
Committed Revolving Loans in the manner specified in Section 1.5(d) by 3:00 p.m.
(Milwaukee time) on the Honor Date and the Agent shall forward such Committed
Revolving Loans to the Issuing Bank for credit against the Borrower's
Reimbursement Obligation. If
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the Borrower does not pay in full such Reimbursement Obligation on the Honor
Date (whether by payment by the Borrower or with the proceeds of Committed
Revolving Loans) and the Participating Banks fund their participations therein
in the manner set forth in Section 1.2(d) below, then all payments thereafter
received by the Issuing Bank in discharge of any of the relevant Reimbursement
Obligations shall be distributed in accordance with Section 1.2(d) below.
(d) The Participating Interests. Each Bank (other than the
Bank then acting as Issuing Bank in issuing Letters of Credit), by its
acceptance hereof, severally agrees to purchase from the Issuing Bank, and the
Issuing Bank hereby agrees to sell to each such Bank (a "Participating Bank"),
an undivided percentage participating interest (a "Participating Interest"), to
the extent of its Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the Issuing Bank. Upon any failure by the
Borrower to pay any Reimbursement Obligation by Noon (Milwaukee time) on the
Honor Date as set forth in Section 1.2(c) above, the Issuing Bank will promptly
notify each Bank, specifying the Letter of Credit drawn upon and the amount
which has not been reimbursed by the Borrower. In the event that such
Reimbursement Obligation is not paid with the proceeds of Committed Revolving
Loans as set forth in Section 1.2(c) above or if the Issuing Bank is required at
any time to return to the Borrower or to a trustee, receiver, liquidator,
custodian or other Person any portion of any payment of any Reimbursement
Obligation, each Participating Bank shall, not later than the Business Day it
receives a certificate in the form of Exhibit C hereto from the Issuing Bank to
such effect, if such certificate is received before 1 p.m. (Milwaukee time), or
not later than the following Business Day, if such certificate is received after
such time, pay to the Issuing Bank an amount equal to its Percentage of such
unpaid or recaptured Reimbursement Obligation together with interest on such
amount accrued from the date the related payment was made by the Issuing Bank to
the date of such payment by such Participating Bank at a rate per annum equal
to: (i) from the date the related payment was made by the Issuing Bank to the
date two Business Days after payment by such Participating Bank is due
hereunder, the Federal Funds Rate for each such day and (ii) from the date two
Business Days after the date such payment is due from such Participating Bank to
the date such payment is made by such Participating Bank, the Domestic Rate in
effect for each such day. Each such Participating Bank shall thereafter be
entitled to receive its Percentage of each payment received in respect of the
relevant Reimbursement Obligation and of interest paid thereon, with the Issuing
Bank retaining its Percentage as a Bank hereunder.
The several obligations of the Participating Banks to the
Issuing Bank under this Section 1.2(d) shall be absolute, irrevocable and
unconditional under any and all circumstances whatsoever and shall not be
subject
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to any set-off, counterclaim or defense to payment which any Participating Bank
may have or have had against the Borrower, the Issuing Bank, any other Bank or
any other Person whatsoever. Without limiting the generality of the foregoing,
such obligations shall not be affected by any Default or Event of Default or by
any reduction or termination of any Commitment of any Bank, and each payment by
a Participating Bank under this Section 1.2(d) shall be made without any offset,
abatement, withholding or reduction whatsoever. The Issuing Bank shall be
entitled to offset amounts received for the account of a Bank under this
Agreement against unpaid amounts due from such Bank to the Issuing Bank
hereunder (whether as fundings of participations, indemnities or otherwise), but
shall not be entitled to offset against amounts owed to the Issuing Bank by any
Bank arising outside this Agreement.
(e) Indemnification. The Participating Banks shall, to the
extent of their respective Percentages, indemnify the Issuing Bank (to the
extent not reimbursed by the Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the Issuing Bank's gross negligence or
willful misconduct) that the Issuing Bank may suffer or incur in connection with
any Letter of Credit. The obligations of the Participating Banks under this
Section 1.2(e) and all other parts of this Section 1.2 shall survive termination
of this Agreement and of all other L/C Documents.
1.3. Applicable Interest Rates.
(a) Domestic Rate Loans. The aggregate principal amount of
Domestic Rate Loans outstanding from time to time shall bear interest (computed
on the basis of a year of 365 or 366 days, as applicable, and actual days
elapsed) prior to maturity (whether by acceleration or otherwise) at a rate per
annum equal to the sum of the Applicable Margin for Domestic Rate Loans plus the
Domestic Rate from time to time in effect, payable on the last Business Day of
each calendar quarter and at maturity (whether by acceleration or otherwise).
"Domestic Rate" means for any day the greater of:
(i) the rate of interest announced by the Agent from
time to time as its prime rate, or equivalent, as in effect on such day, with
any change in the Domestic Rate resulting from a change in said prime rate to be
effective as of the date of the relevant change in said prime rate; and
(ii) the sum of (x) the rate determined by the Agent to
be the prevailing rate per annum (rounded upwards, if not a multiple of 1/16th
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<PAGE> 13
of 1%, to the next higher 1/100 of 1%) at approximately 10:00 a.m. (Milwaukee
time) (or as soon thereafter as is practicable) on such day (or, if such day is
not a Business Day, on the immediately preceding Business Day) for the purchase
at face value of overnight Federal funds in an amount comparable to the
principal amount owed to the Agent for which such rate is being determined, plus
(y) 1/2 of 1% (0.50%).
(b) Eurocurrency Loans. Each Eurocurrency Loan made or
maintained by a Bank shall bear interest during each Interest Period it is
outstanding (computed on the basis of a year of 360 days and actual days
elapsed) on the unpaid principal amount thereof from the date such Loan is
advanced, continued, or created by conversion from a Domestic Rate Loan until
maturity (whether by acceleration or otherwise) at a rate per annum equal to the
sum of the Applicable Margin for Eurocurrency Loans plus the Adjusted LIBOR
applicable for such Interest Period, payable on the last day of the Interest
Period and at maturity (whether by acceleration or otherwise), and if the
applicable Interest Period is longer than three months, on each day occurring
every three months after the commencement of such Interest Period.
"Adjusted LIBOR" means a rate per annum determined in
accordance with the following formula:
Adjusted LIBOR = LIBOR
-----------------------------------
1 - Eurocurrency Reserve Percentage
"LIBOR" means, for any Interest Period: (a) the LIBOR Index
Rate for such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rates of interest
per annum (rounded upwards, if not a multiple of 1/16th of 1%, to the nearest
1/100 of 1%) at which deposits in U.S. Dollars or the relevant Alternative
Currency, as appropriate, in immediately available funds are offered to the
Agent at 11 a.m. (London, England time) two Business Days before the beginning
of such Interest Period by three or more major banks in the interbank
eurocurrency market selected by the Agent for delivery on the first day of and
for a period equal to such Interest Period in an amount equal or comparable to
the principal amount of the Eurocurrency Loan scheduled to be made by the Agent
as part of such Borrowing.
"LIBOR Index Rate" means, for any Interest Period, the rate
per annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S. Dollars or the
relevant Alternative Currency, as appropriate, for a period equal to such
Interest Period, which appears on the Telerate Page 3740 or 3750, as appropriate
for such
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currency, as of 11 a.m. (London, England time) on the day two Business Days
before the commencement of such Interest Period.
"Telerate Page 3740" or "3750" means the display designated as
"Page 3740" or "Page 3750," as appropriate, on the Telerate Service (or such
other page as may replace Page 3740 or 3750, as appropriate, on that service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for U.S. Dollar, Pounds Sterling or Euros
(in the case of Telerate Page 3750) deposits).
"Eurocurrency Reserve Percentage" means, for any Borrowing of
a Eurocurrency Loan, the daily average for the applicable Interest Period of the
maximum rate, expressed as a decimal, at which reserves (including, without
limitation, any supplemental, marginal and emergency reserves) are imposed
during such Interest Period by the Board of Governors of the Federal Reserve
System (or any successor) on "eurocurrency liabilities", as defined in such
Board's Regulation D (or in respect of any other category of liabilities that
includes deposits by reference to which the interest rate on Eurocurrency Loans
is determined or any category of extensions of credit or other assets that
include loans by non-United States offices of any Bank to United States
residents), subject to any amendments of such reserve requirement by such Board
or its successor, taking into account any transitional adjustments thereto. For
purposes of this definition, the Eurocurrency Loans shall be deemed to be
"eurocurrency liabilities" as defined in Regulation D.
(c) Applicable Margin. With respect to Committed Revolving
Loans, the fees with respect to Standby Letters of Credit payable under section
4.2 hereof and the commitment fee payable under Section 4.1 hereof, the
"Applicable Margin" shall mean the rate specified for such obligation below,
subject to quarterly adjustment as hereinafter provided:
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Applicable
Applicable Margin for
Margin for Eurocurrency
Domestic Rate Loans under the
When Following Loans under the Revolving Credit
Status Exists for Revolving Commitment and Applicable
any Margin Credit for Standby Margin for
Determination Commitments Letters of Credit Commitment
Date: is: is: Fee is:
---- -- -- ------
Level I Status 0% .55% .10%
Level II Status 0% .65% .10%
Level III Status 0% .80% .15%
Level IV Status 0% 1.00% .20%
Level V Status 0% 1.25% .25%
provided, however, that all of the foregoing is subject to the following:
(i) the initial Applicable Margin shall be the
Applicable Margin for Level IV Status and shall remain in effect through the
first Margin Determination Date occurring after November 30, 1999;
(ii) on or before the date that is ten Business Days
after the latest date by which the Borrower is required to deliver a Compliance
Certificate to the Banks for a given accounting period pursuant to Section 9.6
hereof, the Agent shall determine whether Level I Status, Level II Status, Level
III Status, Level IV Status or Level V Status exists as of the close of the
applicable accounting period (each date that is ten Business Days after the
latest date by which the Borrower is required to deliver a Compliance
Certificate to the Banks being herein referred to as the "Margin Determination
Date") and shall also determine the Net Leverage Ratio as of such close, in each
case based upon such Compliance Certificate and the financial statements
delivered to the Banks under Section 9.6 hereof for such accounting period, and
shall promptly notify the Borrower and the Banks of such determination and of
any change in the Applicable Margin resulting therefrom;
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(iii) subject to clause (i) above, any change in the
Applicable Margin shall be effective as of such Margin Determination Date, with
such new Applicable Margin to continue in effect until the next Margin
Determination Date. If the Borrower has not delivered a Compliance Certificate
by the date such Compliance Certificate is required to be delivered under
Section 9.6 hereof, until a Compliance Certificate is delivered before the next
Margin Determination Date, the Applicable Margin shall be the Applicable Margin
for Level V Status. If the Borrower subsequently delivers a Compliance
Certificate before the next Margin Determination Date, the Applicable Margin
established by such Compliance Certificate shall take effect from the date of
such delivery and remain effective until the next Margin Determination Date; and
(iv) if and so long as any Event of Default has occurred
and is continuing hereunder, notwithstanding anything herein to the contrary,
the Applicable Margin shall be the Applicable Margin for Level V Status.
(d) Alternative Currencies. On the date the Borrower requests
a Borrowing of Eurocurrency Loans in an Alternative Currency, as provided in
Section 1.5(a) below, the Agent shall promptly notify each Bank of the currency
in which such Borrowing is requested. If a Bank determines that such Alternative
Currency is not available to it in sufficient amount and for a sufficient term
to enable it to advance or continue the Loan requested of it as part of such
Eurocurrency Borrowing and so notifies the Agent no later than 2 p.m. (Milwaukee
time) on the same day it receives notice from the Agent of such requested Loan,
the Agent shall so notify the Borrower by 2:45 p.m. (Milwaukee time). If the
Borrower nevertheless desires such Borrowing, it must notify the Agent by no
later than 3 p.m. (Milwaukee time) on such day. If the Agent does not receive
such notice from the Borrower by 3 p.m. (Milwaukee time), the Borrower shall
automatically be deemed to have revoked its request for the Eurocurrency
Borrowing and the Agent will promptly notify the Banks of such revocation and
such Eurocurrency Borrowing shall not be made in whole or part. If the Borrower
does give such notice by 3 p.m. (Milwaukee time), each Bank that did not notify
the Agent by 2 p.m. (Milwaukee time) that the requested Alternative Currency is
unavailable to it to fund the requested Loan shall, subject to Section 8 hereof,
make its Loan in the requested Alternative Currency in accordance with Section
1.5(d) hereof. Each Bank that did so notify the Agent by 2 p.m. (Milwaukee time)
that it would not be able to make the Loan requested from it shall, subject to
Section 8 hereof, make a Eurocurrency Loan denominated in U.S. Dollars in the
Original Dollar Amount of, and with the same Interest Period as, the
Eurocurrency Loan such Bank was originally requested to make. Such Eurocurrency
Loan denominated in U.S. Dollars shall be made by the affected
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<PAGE> 17
Bank on the same day as the other Banks make their Eurocurrency Loans
denominated in the applicable Alternative Currency as part of the relevant
Borrowing of Eurocurrency Loans, but shall bear interest with reference to the
Adjusted LIBOR applicable to U.S. Dollars rather than the relevant Alternative
Currency for the applicable Interest Period and shall be made available in
accordance with the procedures for disbursing U.S. Dollar Loans under Section
1.5(d) hereof. Any Loan made in an Alternative Currency shall be advanced in
such currency, and, except as otherwise provided in Section 1.5(a), all payments
of principal and interest thereon shall be made in such Alternative Currency.
(e) Rate Determinations. The Agent shall determine each
interest rate applicable to Committed Revolving Loans and the Original Dollar
Amount of Loans denominated in Alternative Currencies, and a reasonable
determination thereof by the Agent shall be conclusive and binding except in the
case of demonstrable error or willful misconduct. The Original Dollar Amount of
each Eurocurrency Loan denominated in an Alternative Currency shall be
determined or redetermined, as applicable, effective as of the first day of each
Interest Period applicable to such Loan.
1.4. Minimum Borrowing Amounts. Each Borrowing of Domestic
Rate Loans shall be in an amount not less than $500,000 and in integral
multiples of $100,000. Each Borrowing of Eurocurrency Loans in U.S. Dollars
shall be in an amount not less than $5,000,000 and in integral multiples of
$1,000,000. Each Borrowing of Eurocurrency Loans in an Alternative Currency
shall be in an amount not less than an Original Dollar Amount of $10,000,000 and
in such integral multiple of 100,000 units of the relevant currency as would
have the Original Dollar Amount most closely approximating $1,000,000 or an
integral multiple thereof.
1.5. Manner of Borrowing Committed Revolving Loans and
Designating Interest Rates Applicable to Committed Revolving Loans.
(a) Notice to the Agent. In order to borrow any Committed
Revolving Loans, the Borrower shall give notice to the Agent by no later than 11
a.m. (Milwaukee time): (i) at least four Business Days before the date on which
the Borrower requests the Banks to advance a Borrowing of Eurocurrency Loans
denominated in an Alternative Currency, (ii) at least three Business Days before
the date on which the Borrower requests the Banks to advance a Borrowing of
Eurocurrency Loans denominated in U.S. Dollars and (iii) on the date the
Borrower requests the Banks to advance a Borrowing of Domestic Rate Loans. The
Loans included in each Borrowing shall bear interest
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initially at the type of rate specified in such notice of a new Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by each Borrowing or, subject to Section 1.4's
minimum amount requirement for each outstanding Borrowing, a portion thereof, as
follows: (i) if such Borrowing is of Eurocurrency Loans, on the last day of the
Interest Period applicable thereto, the Borrower may continue part or all of
such Borrowing as Eurocurrency Loans for an Interest Period or Interest Periods
specified by the Borrower or, if such Eurocurrency Loan is denominated in U.S.
Dollars, convert part or all of such Borrowing into Domestic Rate Loans, (ii) if
such Borrowing is of Domestic Rate Loans, on any Business Day, the Borrower may
convert all or part of such Borrowing into Eurocurrency Loans denominated in
U.S. Dollars for an Interest Period or Interest Periods specified by the
Borrower. The Borrower shall give all such notices requesting the advance,
continuation, or conversion of a Borrowing to the Agent by telephone or telecopy
(which notice shall be irrevocable once given and, if by telephone, shall be
promptly confirmed in writing). Notices of the continuation of a Borrowing of
Eurocurrency Loans denominated in U.S. Dollars for an additional Interest Period
or of the conversion of part or all of a Borrowing of Eurocurrency Loans
denominated in U.S. Dollars into Domestic Rate Loans or of Domestic Rate Loans
into Eurocurrency Loans must be given by no later than 11 a.m. (Milwaukee time)
at least three Business Days before the date of the requested continuation or
conversion. Notices of the continuation of a Borrowing of Eurocurrency Loans
denominated in an Alternative Currency must be given no later than 11 a.m.
(Milwaukee time) at least four Business Days before the requested continuation.
All such notices concerning the advance, continuation, or conversion of a
Borrowing shall specify the date of the requested advance, continuation or
conversion of a Borrowing (which shall be a Business Day), the amount of the
requested Borrowing to be advanced, continued, or converted, the type of
Committed Revolving Loans to comprise such new, continued or converted Borrowing
and, if such Borrowing is to be comprised of Eurocurrency Loans, the currency
and Interest Period applicable thereto. The Borrower agrees that the Agent may
rely on any such telephonic or telecopy notice given by any person it in good
faith believes is an Authorized Representative without the necessity of
independent investigation, and in the event any such notice by telephone
conflicts with any written confirmation, such telephonic notice shall govern if
the Agent has acted in reliance thereon. Notwithstanding the foregoing, no more
than 10 Borrowings comprised of Eurocurrency Loans may be outstanding at any
time and, unless the Required Banks otherwise agree, no Loans may be made or
continued as, or converted into, Eurocurrency Loans if a Default or Event of
Default exists. If a Default or Event of Default exists on the last day of an
Interest Period but the Notes have not been declared to be or become due and
payable under Sections 10.02 and 10.03, such Eurocurrency Loans shall
automatically be converted to Domestic Rate Loans in a principal amount equal to
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<PAGE> 19
(x) if such Eurocurrency Loans are denominated in U.S. Dollars, such amount and
(y) if such Eurocurrency Loans are denominated in an Alternative Currency, an
amount equal to the U.S. Dollar Equivalent of the principal amount of such
Eurocurrency Loans.
(b) Notice to the Banks. The Agent shall give prompt
telephonic or telecopy notice to each Bank of any notice from the Borrower
received pursuant to Section 1.5.(a) above. The Agent shall give notice to the
Borrower and each Bank by like means of the interest rate applicable to each
Borrowing of Eurocurrency Loans and, if such Borrowing is denominated in an
Alternative Currency, shall give notice by such means to the Borrower and each
Bank of the Original Dollar Amount thereof.
(c) Borrower's Failure to Notify. If the Borrower fails to
give notice pursuant to Section 1.5(a) above of the continuation or conversion
of any outstanding principal amount of a Borrowing of Eurocurrency Loans
denominated in U.S. Dollars before the last day of its then current Interest
Period within the period required by Section 1.5(a) and has not notified the
Agent within the period required by Section 3.3 that it intends to prepay such
Borrowing, such Borrowing shall automatically be converted into a Borrowing of
Domestic Rate Loans. If the Borrower fails to give notice pursuant to Section
1.5(a) above of the continuation of any outstanding principal amount of a
Borrowing of Eurocurrency Loans denominated in an Alternative Currency before
the last day of its then current Interest Period within the period required by
Section 1.5(a) and has not notified the Agent within the period required by
Section 3.3 that it intends to prepay such Borrowing, such Borrowing shall
automatically be continued as a Borrowing of Eurocurrency Loans in the same
Alternative Currency with an Interest Period of one month, subject to the
application of Section 1.4, the restrictions contained in the definition of
Interest Period and the restrictions in the last sentence of Section 1.5(a)
hereof.
(d) Disbursement of Committed Revolving Loans. Not later than
Noon (Milwaukee time) on the date of any requested advance of new Borrowings,
subject to Section 8 hereof, each Bank shall make available its Committed
Revolving Loan comprising part of such Borrowing in funds immediately available
at the principal office of the Agent in Milwaukee, Wisconsin, except that if
such Borrowing is denominated in an Alternative Currency each Bank shall,
subject to Section 1.3(d) and Section 8, make available its Committed Revolving
Loan comprising part of such Borrowing at such office as the Agent has
previously specified in a notice to each Bank, in such funds as are then
customary for the settlement of international transactions in such currency and
no later than such local time as is necessary for such funds to be received and
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<PAGE> 20
transferred to the Borrower for same day value on the date of the Borrowing. The
Agent shall make available to the Borrower Committed Revolving Loans denominated
in U.S. Dollars at the Agent's principal office in Milwaukee, Wisconsin and
Committed Revolving Loans denominated in Alternative Currencies at such office
as the Agent has previously agreed to with the Borrower, in each case in the
type of funds received by the Agent from the Banks.
(e) Agent Reliance on Bank Funding. Unless the Agent shall
have been notified by a Bank prior to (or, in the case of a Borrowing of
Domestic Rate Loans, by 1 p.m. (Milwaukee time) on) the date on which such Bank
is scheduled to make payment to the Agent of the proceeds of a Loan (which
notice shall be effective upon receipt) that such Bank does not intend to make
such payment, the Agent may assume that such Bank has made such payment when due
and the Agent may in reliance upon such assumption (but shall not be required
to) make available to the Borrower the proceeds of the Loan to be made by such
Bank and, if any Bank has not in fact made such payment to the Agent, such Bank
shall, on demand, pay to the Agent the amount made available to the Borrower
attributable to such Bank together with interest thereon in respect of each day
during the period commencing on the date such amount was made available to the
Borrower and ending on (but excluding) the date such Bank pays such amount to
the Agent at a rate per annum equal to the Federal Funds Rate or, in the case of
a Loan denominated in an Alternative Currency, the cost to the Agent of funding
the amount it advanced to fund such Bank's Loan, as determined by the Agent. If
such amount is not received from such Bank by the Agent immediately upon demand,
the Borrower will, on demand, repay to the Agent the proceeds of the Loan
attributable to such Bank with interest on any amount unpaid more than three
Business Days after such demand (but otherwise without interest) at a rate per
annum equal to the interest rate applicable to the relevant Loan, but without
such payment being considered a payment or prepayment of a Loan under Section
3.6 hereof, so that the Borrower will have no liability under such section with
respect to such payment.
2. The Swing Line.
2.1. Swing Loans. Subject to all of the terms and conditions
hereof, Firstar Bank Milwaukee, National Association ("Firstar") agrees to make
loans in U.S. Dollars to the Borrower under the Swing Line ("Swing Loans") which
shall not in the aggregate at any time outstanding exceed the lesser of: (i) the
Swing Line Commitment or (ii) the difference between the Revolving Credit
Commitments in effect at such time and the Original Dollar Amount of all Loans
and L/C Obligations outstanding at the time of computation. The Swing Line
Commitment shall be available to the Borrower and may be availed of by the
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Borrower from time to time and borrowings thereunder may be repaid and used
again during the period ending on the Revolving Credit Termination Date. Without
regard to the face principal amount of the Swing Line Note, the actual principal
amount at any time outstanding and owing by the Borrower on account of the Swing
Line Note during the period ending on the Revolving Credit Termination Date
shall be the sum of all Swing Loans then or theretofore made thereon less all
principal payments actually received thereon during such period.
2.2. Interest on Swing Loans. The aggregate outstanding
principal balance of Swing Loans outstanding shall bear interest at the Firstar
Quoted Rate in effect from time to time, provided that if the Swing Loans are
not paid when due (whether by lapse of time, acceleration or otherwise) the
Swing Loans shall bear interest, whether before or after judgment, until payment
in full thereof at a rate per annum equal to the sum of 2% plus the Domestic
Rate from time to time in effect plus the Applicable Margin for Domestic Rate
Loans. Interest on Swing Loans outstanding from time to time shall be due and
payable on the last Business Day of each month, and interest after maturity
(whether by lapse of time, acceleration or otherwise) shall be due and payable
upon demand. Firstar shall provide written notice to the Borrower of the Firstar
Quoted Rate in effect from time to time and any change in the Firstar Quoted
Rate shall be effective on the Business Day following the date Firstar provides
notice thereof.
2.3. Requests for Swing Loans. The Borrower shall give Firstar
prior notice (which may be written or oral) no later than Noon (Milwaukee time)
on the date upon which the Borrower requests that any Swing Loan be made, of the
amount and date of such Swing. Subject to all of the terms and conditions
hereof, the proceeds of such Swing Loan shall be made available to the Borrower
on the date so requested at the offices of the Agent in Milwaukee, Wisconsin.
Anything contained in the foregoing to the contrary notwithstanding: (i) the
obligation of Firstar to make Swing Loans shall be subject to all of the terms
and conditions of this Agreement and (ii) Firstar shall not be obligated to make
more than one Swing Loan during any one day.
2.4. Conversion of Swing Line Loans into Revolving Credit
Loans. Upon the occurrence of an Event of Default or at any time upon the
request of Firstar: (i) payments which pursuant to Section 5 hereof are to be
allocated to the principal of the Revolving Credit Notes and the Swing Line Note
shall first be applied to the Swing Line Note until the Swing Line Note is
repaid in full and (ii) either [a] each Bank shall make a Committed Revolving
Loan in an amount equal to its Percentage of the outstanding principal balance
of the Swing Line Note plus accrued interest thereon (and the Agent shall apply
such Revolving Credit Loans in repayment of the Swing Line Note) or [b] each
Bank shall
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purchase from Firstar a participation in the amount equal to such Bank's
Percentage applicable to Committed Revolving Loans of the outstanding principal
balance of and accrued interest on the Swing Line Note. All of the foregoing
principles shall be applied as though the Revolving Credit Commitments and the
Swing Line Commitment had not terminated pursuant to Section 10.2 or 10.3
hereof, whether or not such is in fact the case.
3. General Provisions Applicable to all Loans.
3.1. Interest Periods. As provided in Section 1.5(a) hereof in
the case of Committed Revolving Loans, at the time of each request to advance,
continue or create by conversion Eurocurrency Loans hereunder the Borrower shall
select an Interest Period applicable to such Eurocurrency Loans from among the
available options. The term "Interest Period" means the period commencing on the
date a Borrowing of Eurocurrency Loans is advanced, continued or created by
conversion and ending one, two, three or six months thereafter, provided,
however, that:
(i) the Borrower may not select an Interest Period that
extends beyond the Revolving Credit Termination Date;
(ii) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such Interest
Period shall be extended to the next succeeding Business Day, provided that if
such extension would cause the last day of an Interest Period to occur in the
following calendar month, the last day of such Interest Period shall be the
immediately preceding Business Day; and
(iii) for purposes of determining an Interest Period, a month
means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month; provided, however,
that if there is no numerically corresponding day in the month in which such an
Interest Period is to end or if such an Interest Period begins on the last
Business Day of a calendar month, then such Interest Period shall end on the
last Business Day of the calendar month in which such Interest Period is to end.
3.2. Maturity of Loans. Each Committed Revolving Loan shall
mature and become due and payable by the Borrower on the last day of the
Interest Period applicable thereto (unless converted or continued in accordance
with the terms of this Agreement) or, in any event, on the Revolving Credit
Termination Date. Swing Loans shall mature and become payable by the Borrower on
the Revolving Credit Termination Date.
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3.3. Prepayments.
(a) Committed Revolving Loans. The Borrower may prepay,
without premium or penalty but subject to Section 3.6, in whole or in part (but,
if in part, then: (i) if such Borrowing is of Domestic Rate Loans, in an amount
not less than $500,000, (ii) if such Borrowing is of Eurocurrency Loans
denominated in U.S. Dollars, in an amount not less than $1,000,000, (iii) if
such Borrowing is denominated in an Alternative Currency, an amount for which
the U.S. Dollar Equivalent is not less than $1,000,000 and (iv) in an amount
such that the minimum amount required for a Borrowing of Committed Revolving
Loans pursuant to Section 1.4 hereof remains outstanding, any Borrowing of
Eurocurrency Loans, upon three Business Days' prior notice to the Agent or, in
the case of a Borrowing of Domestic Rate Loans, notice delivered to the Agent no
later than 11 a.m. (Milwaukee time) on the date of prepayment. Such prepayment
of Domestic Rate or Eurocurrency Loans, as the case may be, shall be made by the
payment of the principal amount to be prepaid and accrued interest thereon to
the date fixed for prepayment plus, in the case of a prepayment of Eurocurrency
Loans on a date prior to the last day of the applicable Interest Period, any
amount payable under Section 3.6. The Agent will promptly advise each Bank of
any such prepayment notice with respect to Committed Revolving Loans it receives
from the Borrower. Any amount paid or prepaid on the Committed Revolving Loans
before the Revolving Credit Termination Date may, subject to the terms and
conditions of this Agreement, be borrowed, repaid and borrowed again.
(b) Swing Loans. The Borrower may prepay any Swing Loans in
whole or in part upon notice delivered to Firstar no later than 11 a.m.
(Milwaukee time) on the date of prepayment specifying the principal amount to be
prepaid. Any amount paid or prepaid on Swing Loans before the Revolving Credit
Termination Date may, subject to the terms and conditions of this Agreement, be
borrowed, repaid and borrowed again.
(c) Mandatory Prepayments. If, within thirty (30) days after
receiving notice under Section 9.6(c) of a Change of Control Event, the Required
Banks notify the Borrower that they require prepayment of the Notes, on the date
set forth in such notice (which date shall be no earlier than (x) five (5) days
after such notice is given or (y) the day on which the Borrower repays any other
Debt before its original scheduled due date, whichever day is earlier) the
Borrower shall pay in full all Obligations then outstanding, including the
prepayment of L/C Obligations in the manner contemplated by Section 10.4 hereof,
and the Commitments and Swing Line Commitment shall terminate in full.
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3.4. Default Rate. If any payment of principal on any Loan is not
made when due (whether by acceleration or otherwise), such Loan shall bear
interest from the date such payment was due until paid in full, payable on
demand, at a rate per annum equal to:
(a) for any Domestic Rate Loan, the sum of two percent (2%) plus
the Domestic Rate from time to time in effect plus the Applicable Margin for
Domestic Rate Loans;
(b) for any Eurocurrency Loan, the sum of two percent (2%) plus
the rate of interest in effect thereon at the time of such default until the end
of the Interest Period applicable thereto and, thereafter, at a rate per annum
equal to the sum of two percent (2%) plus the Domestic Rate from time to time in
effect plus the Applicable Margin for Domestic Rate Loans; and
(c) for Swing Loans, the rate set forth in Section 2.2 hereof.
3.5. The Notes.
(a) All Committed Revolving Loans made to the Borrower by a Bank
shall be evidenced by a single promissory note of the Borrower issued to such
Bank in the form of Exhibit A hereto (individually, a "Committed Revolving Loan
Note" and, collectively, the "Committed Revolving Loan Notes"), each such
Committed Revolving Loan Note to be payable to the order of the applicable Bank
in the principal amount of its Revolving Credit Commitment and otherwise in the
form of Exhibit A hereto.
(b) All Swing Loans made to the Borrower by Firstar shall be
evidenced by a single promissory note of the Borrower issued to Firstar in the
form of Exhibit B hereto (the "Swing Line Note"), such Swing Line Note to be
payable to the order of Firstar in the principal amount of its Swing Line
Commitment and otherwise in the form of Exhibit B hereto.
(c) Each Bank shall record on its books and records or on a
schedule to the appropriate Note the amount of each Loan advanced, continued, or
converted by it, all payments of principal and interest and the principal
balance from time to time outstanding thereon, the type of such Loan, and, for
any Eurocurrency Loan, the Interest Period and interest rate applicable thereto
and the currency in which such Loan is denominated. The record thereof, whether
shown on such books and records of a Bank or on a schedule to any Note, shall be
prima facie evidence as to all such matters; provided, however, that the failure
of
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any Bank to record any of the foregoing or any error in any such record shall
not limit or otherwise affect the obligation of the Borrower to repay all Loans
made to it hereunder together with accrued interest thereon. At the request of
any Bank and upon such Bank tendering to the Borrower the Note to be replaced,
the Borrower shall furnish a new Note to such Bank to replace any outstanding
Note, and at such time the first notation appearing on a schedule on the reverse
side of, or attached to, such Note shall set forth the aggregate unpaid
principal amount of all Loans, if any, then outstanding thereon.
3.6. Funding Indemnity. If any Bank shall incur any loss, cost or
expense (including, without limitation, any loss of profit, and any loss, cost
or expense incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Bank to fund or maintain any Eurocurrency Loan or
the relending or reinvesting of such deposits or amounts paid or prepaid to such
Bank) as a result of:
(a) any payment, prepayment or conversion of a Eurocurrency Loan
on a date other than the last day of its Interest Period, except as provided in
Section 11.1 hereof,
(b) any failure (because of a failure to meet the conditions of
Section 5 or otherwise) by the Borrower to borrow or continue a Eurocurrency
Loan, or to convert a Domestic Rate Loan into a Eurocurrency Loan, on the date
specified in a notice given pursuant to any of Sections 1.5(a) or 2.3 hereof or
established pursuant to Sections 1.5(c) hereof,
(c) any failure by the Borrower to make any payment of principal
on any Eurocurrency Loan when due (whether by acceleration or otherwise), or
(d) any acceleration of the maturity of a Eurocurrency Loan as a
result of the occurrence of any Event of Default hereunder,
then, upon the demand of such Bank, the Borrower shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to the Borrower, with a
copy to the Agent, a certificate executed by an officer of such Bank setting
forth the amount of such loss, cost or expense in reasonable detail (including
an explanation of the basis for and the computation of such loss, cost or
expense) and the amounts shown on such certificate if reasonably calculated
shall be conclusive absent demonstrable error.
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3.7. Commitment Terminations. The Borrower shall have the right at
any time and from time to time, upon five (5) Business Days' prior written
notice to the Agent, to terminate the Revolving Credit Commitments or the Swing
Line Commitment without premium or penalty, in whole or in part; provided,
however, (a) any partial termination of the Swing Line Commitment shall be in an
amount not less than $1,000,000 and (b) any partial termination of the Revolving
Credit Commitments shall be (i) in an amount not less than $5,000,000, and (ii)
allocated ratably among the Banks in proportion to their respective Percentages;
provided further, that the Revolving Credit Commitments may not be reduced to an
amount less than the sum of the Original Dollar Amount of all Loans and all L/C
Obligations then outstanding. The Agent shall give prompt notice to each Bank of
any such termination of such Commitments. Any termination of Revolving Credit
Commitments or Swing Line Commitment pursuant to this Section 3.7 may not be
reinstated.
4. Fees.
4.1. Commitment Fee. The Borrower shall pay to the Agent for the
ratable account of the Banks in accordance with their Percentages a commitment
fee accruing at the rate equal to the Applicable Margin (as then determined and
computed) on the average daily unused amount of the Revolving Credit Commitments
hereunder, such commitment fee to be payable in arrears on September 30, 1999
and, on the last day of each fiscal quarter thereafter and on the Revolving
Credit Termination Date, provided, however, that (i) if the Revolving Credit
Commitments are terminated in whole on a date earlier than the Revolving Credit
Termination Date, the fee for the period to but not including the date of such
termination shall be paid in whole on the date of such termination, (ii) if the
Revolving Credit Commitments are partially terminated pursuant to Section 3.7
hereof, the fee for the period to but not including the date of such partial
termination shall be paid in whole on the date of such partial termination and
(iii) Swing Loans shall be deemed usage of the Revolving Credit Commitments for
purposes of this Section.
4.2 Letter of Credit Fees. The Borrower shall pay to the Issuing
Bank for its own account an issuance fee equal to 1/8 of 1% (0.125%) per annum
of the daily average undrawn amount of all Letters of Credit outstanding during
a calendar quarter or other applicable period, payable quarterly in arrears on
the last day of each calendar quarter, commencing on September 30, 1999, and on
the Revolving Credit Termination Date. In addition, quarterly in arrears, on the
last day of each calendar quarter, commencing on September 30, 1999, and on the
Revolving Credit Termination Date, the Borrower shall pay to the Agent, for the
ratable benefit of the Banks in accordance with their Percentages, a letter of
credit
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fee at a rate per annum equal to the Applicable Margin for Standby Letters of
Credit in effect during each day of such quarter or other applicable period
applied to the daily average undrawn amount of Standby Letters of Credit
outstanding during such quarter. In addition, the Borrower shall pay to the
Issuing Bank for its own account (i) the Issuing Bank's standard issuance fee
for each Commercial Letter of Credit and (ii) the Issuing Bank's standard
drawing, negotiation, amendment, and other administrative fees for each Letter
of Credit (whether a Commercial Letter of Credit or Standby Letter of Credit).
Such standard fees referred to in the preceding clauses (i) and (ii) may be
established by the Issuing Bank from time to time and the Issuing Bank shall
notify the Borrower of any changes in such standard fees.
4.3 Closing Fee. The Borrower shall pay to the Agent for the
ratable account of the Banks in accordance with their Percentages a closing fee
of $462,500, payable on the date of the execution and delivery of this
Agreement.
4.4 Other Fees. The Borrower shall pay to Firstar the other fees
specified in the Fee Letter in the amounts and on the dates set forth therein.
4.5 Fee Calculations. All fees payable under this Section 4
shall be computed on the basis of a year of 365 or 366 days, as applicable, for
the actual number of days elapsed.
5. Place and Application of Payments. All payments of principal
of and interest on the Loans and the Reimbursement Obligations, and of all other
amounts payable by the Borrower under this Agreement, shall be made by the
Borrower to the Agent by no later than 12:00 Noon (Milwaukee time) on the due
date thereof at the principal office of the Agent in Milwaukee, Wisconsin (or
such other location in the State of Wisconsin as the Agent may designate to the
Borrower) or, if such payment is on a Reimbursement Obligation, no later than
provided by Section 1.2(c) hereof or, if such payment is to be made in an
Alternative Currency, no later than 12:00 Noon local time at the place of
payment to such office as the Agent has previously specified in a notice to the
Borrower for the benefit of the Person or Persons entitled thereto. Any payments
received after such time shall be deemed to have been received by the Agent on
the next Business Day. Except (i) during the continuance of any Default in the
payment of any Loan or L/C Obligations, (ii) if Section 2.4 hereof requires
otherwise or (iii) the Borrower requests otherwise in accordance with the
provisions of this Agreement, payments on the Obligations shall be applied first
to Domestic Rate Loans under the Revolving Credit until paid in full, before
application to any other Loans. All such payments shall be made (i) in U.S.
Dollars, in immediately available funds at the place of payment, or (ii) in the
case of amounts payable
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hereunder in an Alternative Currency, in such Alternative Currency in such funds
then customary for the settlement of international transactions in such
currency, in each case without setoff or counterclaim. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest on Committed Revolving Loans or commitment fees ratably to
the Banks, and like funds relating to the payment of any other amount payable to
any Person to such Person, in each case to be applied in accordance with the
terms of this Agreement. Notwithstanding the foregoing, payments made by the
Borrower upon repayment in full of the Obligations and the termination of this
Agreement shall be made by the Borrower to the Agent by no later than 2 p.m.
(Milwaukee time) on such date.
6. Definitions; Interpretation.
6.1. Definitions. The following terms when used herein have the
following meanings:
"Account" is defined in Section 10.4(b) hereof.
"Adjusted LIBOR" is defined in Section 1.3(b) hereof.
"Affiliate" means any Person directly or indirectly controlling
or controlled by, or under direct or indirect common control with, another
Person. A Person shall be deemed to control another Person for the purposes of
this definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise; provided that, in any event for
purposes of this definition, any Person that owns, directly or indirectly, 20%
or more of the securities having the ordinary voting power for the election of
directors or governing body of a corporation or 20% or more of the partnership
or other ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to control such corporation or
other Person.
"Agent" means Firstar Bank Milwaukee, National Association and
any successor pursuant to Section 12.7 hereof.
"Alternative Currency" means Pounds Sterling or Euros, in each
case only to the extent such currencies are freely transferable and convertible
into U.S. Dollars and are traded and readily available to each Bank in the
London interbank market.
"Applicable Margin" is defined in Section 1.3(c) hereof.
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"Application" is defined in Section 1.2(b) hereof.
"Assignment Agreement" means an Assignment and Assumption
Agreement in the form of Exhibit G hereto.
"Authorized Representative" means those persons shown on the
list of officers provided by the Borrower pursuant to Section 8.1(g) hereof, or
on any updated such list provided by the Borrower to the Agent, or any further
or different officer of the Borrower so named by any Authorized Representative
of the Borrower in a written notice to the Agent.
"Bank" is defined in the first paragraph of this Agreement and
includes each assignee Bank pursuant to Section 14.12 hereof.
"Borrower" is defined in the first paragraph of this Agreement.
"Borrowing" means the total of Loans of a single type advanced,
continued for an additional Interest Period, or converted from a different type
into such type by the Banks on a single date and for a single Interest Period.
Borrowings of Committed Revolving Loans are made and maintained ratably from
each of the Banks according to their Percentages. A Borrowing is "advanced" on
the day the Banks (or Firstar in the case of a Swing Loan) advance funds
comprising such Borrowing to the Borrower, is "continued" on the date a new
Interest Period for the same type of Loans commences for such Borrowing, and is
"converted" when such Borrowing is changed from one type of Loan to the other,
all as requested by the Borrower pursuant to Section 1.5(a) .
"Business Day" means any day other than a Saturday or Sunday on
which Banks are not authorized or required to close in Milwaukee, Wisconsin and,
if the applicable Business Day relates to the borrowing or payment of a
Eurocurrency Loan denominated in U.S. Dollars, on which banks are dealing in
U.S. Dollar deposits in the interbank market in London, England and, if the
applicable Business Day relates to the borrowing or payment of a Eurocurrency
Loan denominated in an Alternative Currency, on which banks and foreign exchange
markets are open for business in the city where disbursements of or payments on
such Loan are to be made.
"Capital Lease" means any lease of Property which, in accordance
with GAAP, would be required to be capitalized on the balance sheet of the
lessee.
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"Capitalized Lease Obligations" means, for any Person, the
amount of such Person's liabilities under Capital Leases determined in
accordance with GAAP.
"Cash Equivalents" means Investments of the type permitted by
Sections 9.14(a), (b), (c), (d), (e) and (f) hereof.
"Change of Control Event" means at any time:
(i) any Person is or becomes the Beneficial Owner of
securities of the Borrower representing 30% or more of the then outstanding
Voting Stock of the Borrower (unless the event causing the 30% threshold to be
crossed is an acquisition of securities directly from the Borrower),
(ii) during any period of twelve (12) consecutive months
beginning after the date of this Agreement, individuals who at the beginning of
such period constitute the Board of Directors of the Borrower (the "Board") and
any new director (other than a director designated by a person who has entered
into an agreement with the Borrower to effect a transaction described in clause
(i), (iii) or (iv) of this Change of Control Event definition) whose election or
nomination for election was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved
cease for any reason (other than death) to constitute a majority of the Board;
(iii) the stockholders of the Borrower approve a merger or
consolidation of the Borrower with any other corporation (other than a merger or
consolidation which would result in the Voting Stock of the Borrower outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the entity surviving
such merger or consolidation), at least 65% of the Voting Stock of the Borrower
or such surviving entity outstanding immediately after such merger or
consolidation), or
(iv) the stockholders of the Borrower approve a plan of
complete liquidation or dissolution of the Borrower or an agreement for the sale
or disposition by the Borrower of all or substantially all of the Borrower's
assets.
For purposes of the definition of Change of Control Event, "Person"
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act as supplemented by Section 13(d)(3) of the Exchange Act; provided, however,
that
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Person shall not include (i) the Borrower or any Wholly-Owned Subsidiary, or
(ii) any person who, as of the date of this Agreement, was the Beneficial Owner
of securities of the Borrower representing 20% or more of the combined voting
power.
For purposes of the definition of Change of Control Event, a Person
shall be deemed the "Beneficial Owner" of any securities which such Person,
directly or indirectly, has the right to vote or dispose of or has "beneficial
ownership" (with the meaning of Rule 13d-3 of the Exchange Act) of, including
pursuant to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that: (i) a Person shall not be deemed the
Beneficial Owner of any security as a result of an agreement, arrangement or
understanding to vote such security (x) arising solely from a revocable proxy or
consent given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and the applicable rules
and regulations thereunder or (y) made in connection with, or to otherwise
participate in, a proxy or consent solicitation made, or to be made, pursuant
to, and in accordance with, the applicable provisions of the Exchange Act and
the applicable rules and regulations thereunder, in either case described in
clause (x) or clause (y) above, whether or not such agreement, arrangement or
understanding is also then reportable by such Person on Schedule 13 under the
Exchange Act (or any comparable or successor report); and (ii) a Person engaged
in business as an underwriter of securities shall not be deemed to be the
Beneficial Owner of any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of forty
days after the date of such acquisition.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commercial Letter Of Credit" means a Letter of Credit that
finances a commercial transaction by paying part or all of the purchase price
for goods against delivery of a document of title covering such goods and any
other required documentation.
"Committed Revolving Loan" is defined in Section 1.1(a) hereof.
"Committed Revolving Loan Note" is defined in Section 3.5(a)
hereof.
"Commitments" means the Revolving Credit Commitments.
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"Compliance Certificate" means a certificate in the form of
Exhibit D hereto.
"Confidential Information" means information that is furnished
to the Agent or any Bank by or on behalf of the Borrower or any of its
Subsidiaries in a writing designated as confidential, but does not include any
such information that is or becomes generally available to the public or that is
or becomes available to the Agent or such Bank from a source other than the
Borrower or any such Subsidiary that is not, to the Agent's or Banks' knowledge,
acting in violation of a confidentiality agreement with the Borrower or any such
Subsidiary.
"Consolidated Net Worth" means, as of the date of any
determination thereof, the sum of (i) the par value (or value stated on the
books of the Borrower) of the capital stock of all classes of the Borrower plus
(or minus in the case of a surplus deficit) (ii) the amount of the consolidated
surplus, whether capital or earned, of the Borrower and its Subsidiaries after
subtracting therefrom the aggregate of treasury stock and any other
contra-equity accounts and cumulative foreign currency translation adjustments.
"Contractual Obligation" means, as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Controlled Group" means all members of a controlled group of
corporations and all trades and businesses (whether or not incorporated) under
common control that, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Credit Documents" means this Agreement, the Notes, the
Applications, the Letters of Credit, each Subsidiary Guarantee Agreement
delivered to the Agent pursuant to Section 9.1 or Section 9.25 hereof and each
Swap Contract between the Borrower and a Bank or an Affiliate of a Bank.
"Credit Event" means the advancing of any Loan or the issuance
of, or extension of the expiration date or increase in the amount of, any Letter
of Credit.
"Current Debt" means, for any Person, all Indebtedness of such
Person for borrowed money which by its terms or by the terms of any instrument
or agreement relating thereto matures on demand or within one year
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from the date of the creation thereof and is not directly or indirectly
renewable or extendible at the option of the debtor to a date more than one year
from the date of the creation thereof, provided that Indebtedness for borrowed
money outstanding under a revolving credit or similar agreement which obligates
the lender or lenders to extend credit over a period of more than one year shall
constitute Funded Debt and not Current Debt, even though such Indebtedness by
its term matures on demand or within one year from the date of the creation
thereof.
"Debt" means, for any Person, the sum of such Person's Current
Debt and Funded Debt.
"Default" means any event or condition the occurrence of which
would, with the passage of time or the giving of notice, or both, constitute an
Event of Default.
"Domestic Rate" is defined in Section 1.3(a) hereof.
"Domestic Rate Loan" means a Committed Revolving Loan bearing
interest prior to maturity at a rate specified in Section 1.3(a) hereof.
"Domestic Subsidiary" means each Subsidiary other than a Foreign
Subsidiary.
"EBIT" means, as to any Person and for any period as to which
such amount is being determined, the sum of the amounts (on a consolidated
basis) for such period of (a) net income (excluding extraordinary gains and
extraordinary losses) and (b) to the extent deducted in determining net income,
(i) interest expense and (ii) provisions for taxes based on income.
"EBITDA" means, as to any Person and for any period as to which
such amount is being computed, the sum of the amounts (on a consolidated basis)
for such period of (a) EBIT, (b) depreciation expense and (c) amortization
expense.
"Environmental and Health Laws" means any and all federal,
state, local and foreign statutes, laws, regulations, ordinances, judgments,
permits and other governmental rules or restrictions relating to human health,
safety (including without limitation occupational safety and health standards),
or the environment or to emissions, discharges or releases of pollutants,
contaminants, hazardous or toxic substances, wastes or any other controlled or
regulated substance into the environment, including without limitation ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing,
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distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, hazardous or toxic substances, wastes or any other
controlled or regulated substance or the clean-up or other remediation thereof.
"ERISA" is defined in Section 7.8 hereof.
"Euro" means the Euro referred to in Council Regulations (EC)
No. 1103197 dated June 17, 1997 passed by the Council of the European Union.
"Eurocurrency Loan" means a Committed Revolving Loan bearing
interest prior to maturity at the rate specified in Section 1.3(b) hereof.
"Eurocurrency Reserve Percentage" is defined in Section 1.3(b)
hereof.
"Event of Default" means any of the events or circumstances
specified in Section 10.1 hereof.
"Excess Cash" shall mean as of any time the amount (if any) by
which (x) cash and Cash Equivalents of the Borrower and its Subsidiaries held in
the United States exceeds (y) $3,000,000.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Federal Funds Rate" means the fluctuating interest rate per
annum described in part (x) of clause (ii) of the definition of Domestic Rate in
Section 1.3(a) hereof.
"Fee Letter" means the letter agreement dated September 9, 1999
between Firstar and the Borrower.
"Firstar" is defined in Section 2.1 hereof.
"Firstar Quoted Rate" means the rate of interest applicable to
Swing Loans established from time to time by Firstar in accordance with Section
2.2.
"Foreign Subsidiary" shall mean (i) each Subsidiary of the
Borrower which is organized under the laws of a jurisdiction other than the
United States of America or any State thereof and (ii) each Subsidiary of the
Borrower of
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which a majority of the revenues, earnings or total assets (determined on a
consolidated basis with that Subsidiary's Subsidiaries) are located or derived
from operations outside of the United States of America.
"Funded Debt" means, for any Person, all Indebtedness of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, more than one
year from, or is directly or indirectly renewable or extendible at the option of
the debtor to a date more than one year (including an option of the debtor under
a revolving credit or similar agreement obligating the lender or lenders to
extend credit over a period of more than one year) from, the date of the
creation thereof.
"GAAP" means generally accepted accounting principles as in
effect from time to time, applied by the Borrower and its Subsidiaries on a
basis consistent with the preparation of the Borrower's financial statements
furnished to the Banks as described in Section 7.4(a) hereof.
"Guarantor" means each Subsidiary of the Borrower that is a
signatory hereto or that executes and delivers to the Agent a Subsidiary
Guarantee Agreement in the form of Exhibit E hereto along with the accompanying
closing documents required by Sections 8.1(a) through (d) hereof.
"Guaranty" means, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or service, regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of any
Guaranty shall be equal to the maximum aggregate amount of the obligation
guaranteed or such lesser amount to
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<PAGE> 36
which the maximum aggregate potential liability of the guarantor shall have been
specifically limited.
"Hazardous Material" means any substance or material which is
hazardous or toxic, and includes, without limitation. (a) asbestos,
polychlorinated biphenyls, dioxins and petroleum or its by-products or
derivatives (including crude oil or any fraction thereof) and (b) any other
material or substance classified or regulated as "hazardous" or "toxic" pursuant
to any Environmental and Health Law.
"Honor Date" is defined in Section 1.2(c) hereof.
"Indebtedness" means and includes, for any Person, all
obligations (excluding contingency reserves and reserves for deferred income
taxes) of such Person, without duplication, which are required by GAAP to be
shown as liabilities on its balance sheet, and in any event shall include all of
the following whether or not so shown as liabilities: (i) obligations of such
Person for borrowed money; (ii) obligations of such Person representing the
deferred purchase price of property or services other than accounts payable and
accrued expenses arising in the ordinary course of business on terms customary
in the trade; (iii) obligations of such Person evidenced by notes, acceptances,
or other instruments of such Person or arising out of letters of credit issued
for such Person's account; (iv) obligations, whether or not assumed, secured by
Liens on Property now or hereafter owned or acquired by such Person; (v)
Capitalized Lease Obligations of such Person; and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
"Interest Coverage Ratio" means, as of any time the same is to
be determined, the ratio of (a) EBIT of the Borrower and its Subsidiaries for
the four fiscal quarters ending on such date to (b) interest expense of the
Borrower and its Subsidiaries for the four fiscal quarters ending on such date.
"Interest Period" is defined in Section 3.1 hereof.
"Investments" is defined in Section 9.14 hereof.
"Issuing Bank" means Firstar and any successor to Firstar as
Issuing Bank hereunder in accordance with the terms hereof.
"L/C Documents" means the Letters of Credit, any draft or other
document presented in connection with a drawing thereunder, the
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<PAGE> 37
Applications and this Agreement.
"L/C Limit" means $40,000,000.
"L/C Obligations" means the aggregate undrawn amount of all
outstanding Letters of Credit and the aggregate principal amount of all unpaid
Reimbursement Obligations.
"Lease Payments" means, for any period, the aggregate amount of
payments required to be made by the Borrower and its Subsidiaries during such
period in respect of operating leases or similar arrangements under which the
Borrower or any Subsidiary is liable as lessee.
"Lending Office" is defined in Section 11.4 hereof.
"Letter of Credit" is defined in Section 1.2(a) hereof.
"Leverage Ratio" means, as of any time the same is to be
determined, the ratio of Total Debt of the Borrower and its Subsidiaries as of
such date to EBITDA of the Borrower and its Subsidiaries for the four fiscal
quarters ending on such date, all as determined on a consolidated basis in
accordance with GAAP.
"Level I Status" means, for any Margin Determination Date, that
as of the close of the accounting period with reference to which such Margin
Determination Date was set, the Net Leverage Ratio is less than 1.0:1.0.
"Level II Status" means, for any Margin Determination Date, that
as of the close of the accounting period with reference to which such Margin
Determination Date was set, the Net Leverage Ratio is equal to or greater than
1.0 : 1.0 but less than 1.5:1.0.
"Level III Status" means, for any Margin Determination Date,
that as of the close of the accounting period with reference to which such
Margin Determination Date was set, the Net Leverage Ratio is equal to or greater
than 1.5:1.0 but less than 2.0:1.0.
"Level IV Status" means, for any Margin Determination Date, that
as of the close of the accounting period with reference to which such Margin
Determination Date was set, the Net Leverage Ratio is equal to or greater than
2.0:1.0 but less than 2.50:1.0.
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<PAGE> 38
"Level V Status" means, for any Margin Determination Date, that
as of the close of the accounting period with reference to which such Margin
Determination Date was set, the Net Leverage Ratio is equal to or greater than
2.50:1.0.
"LIBOR" is defined in Section 1.3(b) hereof.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind in respect of
any Property (including any agreement to give any of the foregoing, the
interests of a vendor or lessor under any conditional sale or other title
retention arrangement, any lease in the nature thereof[, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction]) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or securing
the payment or performance of any obligation.
"Loan" means and includes Committed Revolving Loans and Swing
Loans, and each of them singly, and the term "type" of Loan refers to its status
as a Committed Revolving Loan or Swing Loan or, if a Committed Revolving Loan,
to its status as a Domestic Rate Loan or a Eurocurrency Loan.
"Margin Determination Date" is defined in Section 1.3(c) hereof.
"Mark IV Acquisition" means the purchase by certain direct or
indirect Wholly-Owned Subsidiaries of the Borrower of certain assets owned by
Mark IV Industries, Inc. and its affiliates related to the design, manufacture,
marketing and distribution of specialty filters and filtration products.
"Mark IV Acquisition Documents" means the Purchase Agreement
dated as of September 10, 1999 (the "Purchase Agreement") between Mark IV
Industries, Inc., Facet Holding Co., Inc., Purolator Products Air Filtration
Company, George W. Dahl Company, Inc., Mantronics Limited and the Borrower
(including the schedules and exhibits thereto) and the other documents,
agreements and instruments delivered in connection with the Mark IV Acquisition.
"Net Leverage Ratio" means, as of any time the same is to be
determined, the ratio of (x) Total Debt less Excess Cash as of such date to (y)
EBITDA for the four fiscal quarters ending on such date, all as determined on a
consolidated basis in accordance with GAAP.
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"Non-Material Subsidiary" means each Subsidiary (i) the annual
revenues of which (directly and together with its subsidiaries) during the
current or any subsequent fiscal year of the Borrower were less than $10,000,000
and (ii) the consolidated total assets of which as of the close of each such
fiscal year were less than $5,000,000. Revenues and assets of Foreign
Subsidiaries shall be converted into U.S. Dollars at the U.S. Dollar Equivalent
as of the date of the most recent financial statements required to be furnished
to the Banks pursuant to Section 9.6(a) hereof.
"Notes" means and includes the Committed Revolving Loan Notes
and the Swing Line Note, and each individually, unless the context in which
such term is used shall otherwise require.
"Obligations" means all fees payable hereunder, all obligations
of the Borrower to pay principal or interest on Loans and L/C Obligations, all
obligations of the Borrower to make payments to a Bank or an Affiliate of a Bank
under a Swap Contract between the Borrower and such Bank or Affiliate of a Bank
and all other payment obligations of the Borrower arising under or in relation
to any Credit Document.
"Original Dollar Amount" means the amount of any Obligation
denominated in U.S. Dollars and, in relation to any Loan denominated in an
Alternative Currency, the U.S. Dollar Equivalent of such Loan on the day it is
advanced or continued for an Interest Period.
"Participating Bank" is defined in Section 1.2(d) hereof.
"Percentage" means, for each Bank, the percentage of the total
Commitments represented by such Bank's Revolving Credit Commitments or, if the
Revolving Credit Commitments have been terminated, the percentage held by such
Bank (including through participation interests in L/C Obligations and/or Swing
Loans) of the aggregate principal amount of all outstanding Obligations.
"Permitted Industrial Revenue Bond Liabilities" means
liabilities (including, without limitation, reimbursement obligations on letters
of credit) of the Borrower and its Subsidiaries aggregating not more than
$40,000,000 at any one time outstanding in respect of industrial revenue bond
issues constituting long-term indebtedness which finance additions to or
improvements in plant, property or equipment of the Borrower or any Subsidiary
secured (if at all) by no Property of the Borrower or any Subsidiary other than
the fixed assets so acquired or improved, replacements thereto and intangible
Property related specifically thereto.
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"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any other
entity or organization, including a government or any agency or political
subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code that is either (i) maintained by a member of the Controlled Group for
employees of a member of the Controlled Group or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"PBGC" is defined in Section 8.8 hereof.
"Pounds Sterling" means the lawful currency of the United
Kingdom.
"Priority Debt" means, as of any time of determination thereof,
(a) Debt of any Subsidiary including Debt of the Borrower (other than the
Obligations) with respect to which a Subsidiary has provided a Guaranty, (b)
Debt of the Borrower secured by any Lien, (c) preferred stock of any Subsidiary
to the extent not held by the Borrower or a Wholly-Owned Subsidiary and (d) the
aggregate amount of all future Lease Payments owing by the Borrower and its
Subsidiaries under operating leases entered into after November 30, 1994
pursuant to sale/leaseback transactions.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, whether now owned or
hereafter acquired.
"Reimbursement Obligation" is defined in Section 1.2(c) hereof.
"Required Banks" means, as of the date of determination thereof,
Banks holding at least 51% of the Percentages.
"Revolving Credit" is defined in the introductory paragraph
hereof.
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"Revolving Credit Commitment" is defined in Section 1.1(a)
hereof.
"Revolving Credit Termination Date" means September 9, 2002, or
such earlier date on which the Revolving Credit Commitments are terminated
pursuant to Section 10.02 or Section 10.03.
"SEC" means the Securities and Exchange Commission.
"Security" has the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
"Set-Off" is defined in Section 14.7 hereof.
"Significant Subsidiary" means each domestic Subsidiary (i) the
annual gross sales of which (directly and together with its subsidiaries) for
the current or any one or more subsequent fiscal years of the Borrower exceeded
$40,000,000 or (ii) the consolidated total assets of which as of the close of
the current or any subsequent fiscal year the Borrower exceeded $25,000,000.
"Standby Letter of Credit" means a Letter of Credit that is not
a Commercial Letter of Credit.
"Subsidiary" means, as to the Borrower, any corporation or other
entity of which more than fifty percent (50%) of the outstanding stock or
comparable equity interests having ordinary voting power for the election of the
Board of Directors of such corporation or similar governing body in the case of
a non-corporation (irrespective of whether or not, at the time, stock or other
equity interests of any other class or classes of such corporation or other
entity shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned by the Borrower or by
one or more of its Subsidiaries.
"Subsidiary Guarantee Agreement" means a letter to the Agent in
the form of Exhibit E hereto executed by a Subsidiary whereby it acknowledges it
is party hereto as a Guarantor.
"Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, currency option or any other, similar transaction
(including any option to enter into any of
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<PAGE> 42
the foregoing) or any combination of the foregoing, and, unless the context
otherwise clearly requires, any master agreement relating to or governing any or
all of the foregoing.
"Swap Termination Value" means, in respect of any Swap Contract,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contract, (a) for any date on or after the date
such Swap Contract has been closed out and termination value determined in
accordance therewith, such termination value, and (b) for any date prior to the
date referenced in clause (a) the amount determined as the mark-to-market value
for such Swap Contract, as determined by the Borrower based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in Swap Contracts (which may include any Bank).
"Swing Line Commitment" means the commitment of Firstar to make
Swing Loans in the amount set forth opposite its signature hereto under the
heading "Swing Line Commitment".
"Swing Line Note" is defined in Section 3.5(c) hereof.
"Swing Loans" is defined in Section 2.1 hereof.
"Total Capitalization" means, as of the date of any
determination thereof, the sum of Total Debt and Consolidated Net Worth.
"Total Debt" means, as of the date of any determination thereof,
all Debt of the Borrower and its Subsidiaries determined without duplication on
a consolidated basis.
"Unfunded Vested Liabilities" means, with respect to any Plan at
any time, the amount (if any) by which (i) the present value of all vested
nonforfeitable accrued benefits under such Plan exceeds (ii) the fair market
value of all Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the Controlled Group to
the PBGC or the Plan under Title IV of ERISA.
"U.S. Dollars" and "$" each mean the lawful currency of the
United States of America.
"U.S. Dollar Equivalent" means the amount of U.S. Dollars which
would be realized by converting an Alternative Currency into U.S. Dollars
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in the spot market at the exchange rate quoted by the Agent, at approximately
11:00 a.m. (London time) two Business Days prior to the date on which a
computation thereof is required to be made, to major banks in the interbank
foreign exchange market for the purchase of U.S. Dollars for such Alternative
Currency.
"Voting Stock" of any Person means capital stock of any class or
classes or other equity interests (however designated) having ordinary voting
power for the election of directors or similar governing body of such Person,
other than stock or other equity interests having such power only by reason of
the happening of a contingency.
"Welfare Plan" means a "welfare plan", as defined in Section
3(l) of ERISA.
"Wholly-Owned" when used in connection with any Subsidiary of
the Borrower means a Subsidiary of which all of the issued and outstanding
shares of stock or other equity interests (other than directors' qualifying
shares as required by law) shall be owned by the Borrower and/or one or more of
its Wholly-Owned Subsidiaries.
"Year 2000 Issues" means anticipated costs, problems and
uncertainties associated with the inability of certain computer applications to
effectively handle data including dates on and after January 1, 2000, as such
inability affects the business, operations and financial condition of the
Borrower and its Subsidiaries and of the Borrower's and its Subsidiaries'
material customers, suppliers and vendors.
"Year 2000 Program" is defined in section 7.15.
6.2. Interpretation. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the terms defined. All
references to times of day in this Agreement shall be references to Milwaukee,
Wisconsin time unless otherwise specifically provided. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in accordance
with GAAP, to the extent applicable, except where such principles are
inconsistent with the specific provisions of this Agreement. Notwithstanding the
foregoing, if any changes in accounting principles from those used in the
preparation of the consolidated financial statements of the Borrower and its
Subsidiaries referred to in Section 7.4(a) occur by reason of the promulgation
of rules, regulations,
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pronouncements, opinions or other requirements of the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants or the
SEC (or successors thereto) and such changes would affect (or would result in a
change in the method of calculation of) any of the covenants set forth in
Sections 9.15, 9.16, 9.17 or 9.18, or any of the defined terms related thereto
contained in Section 6, then (i) the Borrower shall prepare the quarterly and
annual financial statements required to be delivered hereunder in accordance
with such changes and (ii) upon the request of any party hereto, the Borrower,
the Agent and the Banks will enter into negotiations in good faith to amend in
accordance with Section 14.13 all such covenants or terms as would be affected
by such changes in GAAP in such manner as would maintain the economic terms of
such covenants as in effect prior to giving effect to any such changes; provided
that until such an amendment becomes effective, all covenants and defined terms
shall be performed, observed and determined, and any determination of compliance
with such covenants shall be made as though no such changes in accounting
principles had been made, and the Borrower shall deliver to the Banks, in
addition to the consolidated financial statements otherwise required to be
delivered hereunder, a statement of reconciliation conforming such consolidated
financial statements to GAAP prior to such changes.
7. Representations and Warranties. The Borrower hereby represents
and warrants to the Agent and each Bank as follows:
7.1. Corporate Organization and Authority. The Borrower is duly
organized and existing in good standing under the laws of the State of Delaware;
has all necessary corporate power to carry on its present business; and is duly
licensed or qualified and in good standing in each jurisdiction in which the
nature of the business transacted by it or the nature of the Property owned or
leased by it makes such licensing, qualification or good standing necessary and
in which the failure to be so licensed, qualified or in good standing would
materially and adversely affect its business, operations, Property or financial
or other condition.
7.2. Subsidiaries. Schedule 7.2 (as updated from time to time
pursuant to Section 9.1) hereto identifies each Subsidiary (and whether such
Subsidiary is a Significant Subsidiary), the jurisdiction of its incorporation,
the percentage of issued and outstanding shares of each class of its capital
stock owned by the Borrower and its Subsidiaries and, if such percentage is not
100% (excluding directors' qualifying shares as required by law), a description
of each class of its authorized capital stock and the number of shares of each
class issued and outstanding. Each Subsidiary is duly incorporated and existing
in good standing as a corporation under the laws of the jurisdiction of its
incorporation, has all necessary corporate power to carry on its present
business, and is duly licensed
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or qualified and in good standing in each jurisdiction in which the nature of
the business transacted by it or the nature of the Property owned or leased by
it makes such licensing or qualification necessary and in which the failure to
be so licensed or qualified would have a material adverse effect on the
business, operations, Property or financial or other condition of such
Subsidiary. All of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and outstanding and fully paid and nonassessable.
All such shares owned by the Borrower are owned beneficially, and of record,
free of any Lien. Each Significant Subsidiary is a Guarantor.
7.3. Corporate Authority and Validity of Obligations. The
Borrower has full right and authority to enter into this Agreement and the other
Credit Documents to which it is a party, to make the borrowings herein provided
for, to issue its Notes in evidence thereof, to apply for the issuance of the
Letters of Credit, and to perform all of its obligations under the Credit
Documents to which it is a party. Each Guarantor has full right and authority to
enter into this Agreement as a signatory hereto or pursuant to a Subsidiary
Guarantee Agreement and to perform all of its obligations hereunder. Each Credit
Document to which it is a party has been duly authorized, executed and delivered
by the Borrower and each Guarantor and constitutes valid and binding obligations
of the Borrower and each Guarantor enforceable in accordance with its terms. No
Credit Document, nor the performance or observance by the Borrower or any
Guarantor of any of the matters or things therein provided for, contravenes any
provision of law or any charter or by-law provision of the Borrower or any
Guarantor or (individually or in the aggregate) any material Contractual
Obligation of or affecting the Borrower or any Guarantor or any of their
respective Properties or results in or requires the creation or imposition of
any Lien on any of the Properties or revenues of the Borrower or any Guarantor.
7.4. Financial Statements.
(a) The consolidated balance sheet of the Borrower and its
Subsidiaries as at November 28, 1998 and the related consolidated statements of
income, retained earnings and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, and accompanying notes thereto, which financial
statements are accompanied by the audit report of PricewaterhouseCoopers LLP,
independent public accountants, and the unaudited interim consolidated balance
sheet of the Borrower and its Subsidiaries as at May 29, 1999 and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the six (6) months then ended, heretofore
furnished to the Banks, fairly present the consolidated financial condition of
the Borrower and its Subsidiaries as at said dates and the consolidated results
of their
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operations and cash flows for the periods then ended in conformity with
generally accepted accounting principles applied on a consistent basis. Neither
the Borrower nor any Subsidiary has contingent liabilities which are material to
it other than as indicated on such financial statements or, with respect to
future periods, on the financial statements furnished pursuant to Section 9.6
hereof. Since May 29, 1999, there has been no material adverse change in the
business, operations, Property or financial or other condition, or business
prospects, of the Borrower and its Subsidiaries taken as a whole.
(b) The Borrower has furnished to the Banks a pro forma
balance sheet of the Borrower and its Subsidiaries, reflecting the Mark IV
Acquisition, dated August 31, 1999 (the "Pro Forma Balance Sheet") and projected
sales and operating profit of the Borrower and its Subsidiaries, reflecting the
Mark IV Acquisition, for the periods ending on November 30 of the next five
years (the "Projections"). To the knowledge of the Borrower (a) the Pro Forma
Balance Sheet fairly presents the financial condition of the Borrower and its
Subsidiaries after giving effect to the Mark IV Acquisition and there are no
omissions from the Pro Forma Balance Sheet, or other facts and circumstances not
reflected in the Pro Forma Balance Sheet, which would be material under GAAP and
(b) the assumptions used in the preparation of the Projections are reasonable
and there are no presently existing facts or circumstances not reflected in the
Projections which are reasonably expected to cause a material adverse change in
the information set forth in the Projections.
7.5. No Litigation; No Labor Controversies.
(a) There is no litigation or governmental proceeding
pending, or to the knowledge of the Borrower or any Guarantor threatened,
against the Borrower or any Subsidiary which is reasonably expected to be
adversely determined and if adversely determined, would (individually or in the
aggregate, insofar as the Borrower may reasonably foresee) reasonably be
expected to materially adversely affect the business, operations, Property or
financial or other condition of the Borrower and its Subsidiaries taken as a
whole.
(b) There are no labor controversies pending or, to the
knowledge of the Borrower or any Guarantor, threatened against the Borrower or
any Subsidiary which would (individually or in the aggregate, insofar as the
Borrower may reasonably foresee) reasonably be expected to, or which actually
do, materially adversely affect the business, operations, Property or financial
or other condition of the Borrower and its Subsidiaries taken as a whole.
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7.6. Taxes. The Borrower and its Subsidiaries have filed all
United States federal tax returns, and all other tax returns, required to be
filed and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except such taxes, if
any, as are being contested in good faith and for which adequate reserves have
been provided. No notices of tax liens have been filed and no claims are being
asserted concerning any such taxes, which liens or claims are material to the
financial condition of the Borrower and its Subsidiaries on a consolidated basis
taken as a whole. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries for any taxes or other governmental charges are
adequate.
7.7. Approvals. No authorization, consent, license, exemption,
filing or registration with any court or governmental department, agency or
instrumentality, nor any approval or consent of the stockholders of the Borrower
or any Subsidiary or from any other Person, is necessary for the valid
execution, delivery or performance by the Borrower or any Subsidiary of any
Credit Document to which it is a party, except for such thereof as have been
obtained and are in full force and effect.
7.8. ERISA. With respect to each Plan, the Borrower and each
other member of the Controlled Group have fulfilled their obligations under the
minimum funding standards of and are in compliance in all material respects with
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
with the Code to the extent applicable to each of them and have not incurred any
liability to the Pension Benefit Guaranty Corporation ("PBGC") or a Plan under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA. Neither the Borrower nor any Subsidiary has any contingent
liabilities for any post-retirement benefits under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Title I of ERISA.
7.9. Government Regulation. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company", or a "Subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "Subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7.10. Margin Stock. Neither the Borrower nor any Subsidiary is
engaged principally, or as one of its primary activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock ("margin
stock" to have the same meaning herein as in Regulation U of the Board of
Governors of the
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Federal Reserve System). The Borrower will not use the proceeds of any Loan or
Letter of Credit in a manner that violates any provision of Regulation U or X of
the Board of Governors of the Federal Reserve System.
7.11. Licenses and Authorizations: Compliance with Environmental
and Health Laws. The Borrower and each of its Subsidiaries has all necessary
licenses, permits and governmental authorizations to own and operate its
Properties and to carry on its business as currently conducted and contemplated,
except where the failure to maintain such licenses, permits and authorizations
would (individually or in the aggregate, insofar as the Borrower may reasonably
foresee) not reasonably be expected to have, and does not actually have, a
material adverse effect on the business, operations, Property or financial or
other condition of the Borrower and its Subsidiaries taken as a whole. The
Borrower and its Subsidiaries are in compliance with all Environmental and
Health Laws, except where the failure to comply would not be reasonably expected
to have, and actually does not have, a material adverse effect on the business,
operations, Property or financial or other condition of the Borrower and its
Subsidiaries taken as a whole. Neither the Borrower nor any Subsidiary has
given, nor is it required to give, nor has the Borrower or any Subsidiary
received, any notice, letter, citation, order, warning, complaint, inquiry,
claim or demand to or from any governmental entity or in connection with any
court proceeding which would reasonably be expected to have a material adverse
effect on the Property, business or operations of the Borrower and its
Subsidiaries taken as a whole claiming that: (i) the Borrower or any Subsidiary
has violated, or is about to violate, any Environmental and Health Law; (ii)
there has been a release, or there is a threat of release, of Hazardous
Materials from the Borrower's or any Subsidiary's Property, facilities,
equipment or vehicles; (iii) the Borrower or any Subsidiary may be or is liable,
in whole or in part, for the costs of cleaning up, remediating or responding to
a release of Hazardous Materials; or (iv) any of the Borrower's or any
Subsidiary's property or assets are subject to a Lien in favor of any
governmental entity for any liability, costs or damages, under any Environmental
and Health Law arising from, or costs incurred by such governmental entity in
response to, a release of a Hazardous Materials.
7.12. Ownership of Property; Liens. The Borrower and its
Subsidiaries each have good and defensible title to their assets as reflected on
the most recent consolidated balance sheet of the Borrower and its Subsidiaries
furnished to the Banks (except for sales of assets by the Borrower and its
Subsidiaries in the ordinary course of business), subject to no Liens other than
such thereof as are permitted by Section 9.9 hereof.
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7.13. No Burdensome Restrictions: Compliance with Agreements.
Neither the Borrower nor any Subsidiary is (a) party or subject to any law,
regulation, rule or order, or any Contractual Obligation that (individually or
in the aggregate) materially adversely affects the business, operations,
Property or financial or other condition of the Borrower and its Subsidiaries
taken as a whole or (b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement to
which it is a party, which default materially adversely affects the business,
operations, Property or financial or other condition of the Borrower and its
Subsidiaries taken as a whole.
7.14. Full Disclosure. All information heretofore furnished by
the Borrower or any Guarantor to the Agent or any Bank for purposes of or in
connection with the Credit Documents or any transaction contemplated thereby is,
and all such information hereafter furnished by the Borrower or any Guarantor to
the Agent or any Bank will be, true and accurate in all material respects and
not misleading on the date as of which such information is stated or certified
(it being understood that with respect to projections, such projections are good
faith estimates based on assumptions believed to be reasonable by the Borrower
at the time of delivery of such projections to the Agent and the Banks and that
no assurances can be given that the results set forth in the projections will
actually be obtained).
7.15. Year 2000. The Borrower has made a full and complete
assessment of the Year 2000 Issues and has a realistic and achievable program
for remediating the Year 2000 Issues on a timely basis (the "Year 2000
Program"). Based on such assessment and the Year 2000 Program, the Borrower does
not reasonably anticipate that Year 2000 Issues will have a material adverse
effect on the business operations, Property or financial or other condition of
the Borrower and its Subsidiaries taken as a whole.
8. Conditions Precedent. The obligation of each Bank to advance
any Loan or of the Issuing Bank to issue, extend the expiration date (including
by not giving notice of non-renewal) of or increase the amount of any Letter of
Credit, shall be subject to the following conditions precedent:
8.1. Initial Credit Event. Before or concurrently with the
initial Credit Event:
(a) The Agent shall have received for each Bank the
favorable written opinion of Sidley & Austin, counsel to the Borrower and
Guarantors, in substantially the form attached hereto as Exhibit F,
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(b) The Agent shall have received for each Bank copies of
(i) the most recent restatement in full of the certificate of incorporation,
together with all subsequent amendments, and a certificate of good standing, for
the Borrower, both certified as of a date not earlier than twenty days prior to
the date hereof by the appropriate governmental officer of the Borrower's
jurisdiction of incorporation and (ii) the Borrower's bylaws (or comparable
constituent documents) and any amendments thereto, certified in each instance by
its Secretary or an Assistant Secretary;
(c) The Agent shall receive for each Bank copies of each
Guarantor's Certificate of Incorporation and bylaws (or comparable constituent
documents) and any amendments thereto, certified in each instance by its
Secretary or Assistant Secretary;
(d) The Agent shall have received for each Bank copies of
resolutions of the Borrower's and each Guarantor's Board of Directors
authorizing the execution and delivery of the Credit Documents to which it is a
party and the consummation of the transactions contemplated thereby together
with specimen signatures of the persons authorized to execute such documents on
the Borrower's or such Guarantor's behalf, all certified in each instance by its
Secretary or Assistant Secretary;
(e) The Agent shall have received (i) for each Bank such
Bank's duly executed Committed Revolving Loan Note of the Borrower dated the
date hereof and otherwise in compliance with the provisions of Section 3.5
hereof and (ii) for Firstar the duly executed Swing Line Note of the Borrower
dated the date hereof and otherwise in compliance with the provisions of Section
3.5 hereof;
(f) The Agent shall have received (i) an Application
relating to the issuance by the Issuing Bank of a Standby Letter of Credit in
favor of Harris Trust and Savings Bank ("Harris") and (ii) evidence of the
termination of the Multicurrency Credit Agreement dated December 6, 1995 among
the Borrower, certain other parties and Harris;
(g) The Agent shall have received for each Bank a list of
the Borrower's Authorized Representatives;
(h) The Agent shall have received for each Bank (i) a copy
of recent drafts of the principal Mark IV Acquisition Documents and (ii) a
certificate by the Chief Financial Officer of the Borrower stating that all of
the conditions set forth in Sections 3.02 and 3.04 and Article 10 of the
Purchase
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Agreement have been satisfied or waived by the Borrower and identifying the
material closing conditions, if any, which the Borrower waived, and the Agent
shall have received satisfactory evidence that the Mark IV Acquisition will
close on the date of the initial Credit Event on terms not materially different
than those set forth in the draft documents referred to in clause (i) above;
(i) The Agent and the Banks shall have received information
satisfactory to the Agent and the Required Banks regarding the Borrower's Year
2000 Program;
(j) The Agent shall have received the fees referred to in
Sections 4.3 and 4.4.
(k) All legal matters incident to the execution and
delivery of the Credit Documents shall be satisfactory to the Banks; and
(l) The Agent shall have received a certificate by the
chief financial officer or corporate controller of the Borrower, stating that on
the date of such initial Credit Event no Default or Event of Default has
occurred and is continuing.
8.2. All Credit Events. As of the time of each Credit Event
hereunder:
(a) In the case of a Borrowing of a Committed Revolving Loan,
the Agent shall have received the notice required by Section 1.5(a) hereof
(including any deemed notice under Section 1.2(c)); in the case of a Swing Loan,
the Agent shall have received the Swing Line Note dated the date of the initial
Swing Loan and otherwise in compliance with the provisions of Section 3.5 hereof
and the notice required by Section 2.3 hereof; in the case of the issuance of
any Letter of Credit, the Agent shall have received a duly completed Application
for a Letter of Credit; and, in the case of an extension or increase in the
amount of a Letter of Credit, a written request therefor, in a form acceptable
to the Agent;
(b) Each of the representations and warranties set forth in
Section 7 hereof (except in the case of all Credit Events after the initial
Credit Event, for the last sentence of Section 7.4(a)) shall be and remain true
and correct as of said time, taking into account any amendments to such Section
(including without limitation any amendments to the Schedules referenced
therein) made after the date of this Agreement in accordance with its
provisions, except that if any such representation or warranty relates solely to
an earlier date it need only remain true as of such date; and on and after the
Borrowing Date on which the Borrower
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receives Loans to pay the purchase price for the Mark IV Acquisition, the
representations and warranties set forth in Section 7 hereof shall apply to the
Property and Subsidiaries acquired pursuant to the Mark IV Acquisition;
(c) After giving effect to such Credit Event, the sum of
the aggregate Original Dollar Amount of Loans and L/C Obligations outstanding
hereunder shall not exceed the Revolving Credit Commitments in effect at such
time;
(d) The Borrower and each Guarantor shall be in full
compliance with all of the terms and conditions hereof, and no Default or Event
of Default shall have occurred and be continuing or would occur as a result of
such Credit Event; and
(e) Such Credit Event shall not violate any order, judgment
or decree of any court or other authority or any provision of law or regulation
applicable to any Bank (including, without limitation, Regulation U of the Board
of Governors of the Federal Reserve System).
Each request for a Borrowing hereunder and each request for the
issuance of, increase in the amount of, or extension of the expiration date of,
a Letter of Credit shall be deemed to be a representation and warranty by the
Borrower on the date of such Credit Event as to the facts specified in
paragraphs (b), (d) and (e) of this Section 8.2.
9. Covenants. The Borrower covenants and agrees that, so long as
any Note or any L/C Obligation is outstanding hereunder, or any Commitment is
available to or in use by the Borrower hereunder, except to the extent
compliance in any case is waived in writing by the Required Banks:
9.1. Corporate Existence; Subsidiaries. The Borrower shall, and
shall cause each of its Subsidiaries to, preserve and maintain its corporate
existence; provided, however, that nothing in this Section shall prevent mergers
and consolidations permitted by Section 9.12 hereof or the discontinuation of
the corporate existence of any Non-Material Subsidiary if discontinuance of such
Non-Material Subsidiary is desirable in the conduct of the Borrower's business;
provided the aggregate total revenues of all Non-Material Subsidiaries whose
corporate existence is discontinued during any fiscal year may not exceed
$25,000,000. As a condition to establishing or acquiring any Significant
Subsidiary and within 15 days after a Subsidiary otherwise becomes a Significant
Subsidiary, unless the Required Banks otherwise agree, the Borrower shall (i)
cause such Significant Subsidiary to execute a Subsidiary Guarantee
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Agreement, (ii) cause such Subsidiary to deliver documentation similar to that
described in Section 8.1(a) through (d) relating to the authorization for,
execution and delivery of, and validity of such Subsidiary's obligations as a
Guarantor hereunder and under the Subsidiary Guarantee Agreement in form and
substance satisfactory to the Required Banks and (iii) if necessary, deliver an
updated Schedule 7.2 to reflect the new Subsidiary.
9.2. Maintenance. The Borrower will maintain, preserve and keep
its plants, Properties and equipment deemed by it necessary to the proper
conduct of its business in good repair, working order and condition and will
from time to time make all necessary repairs, renewals, replacements, additions
and betterments thereto so that at all times such plants, Properties and
equipment shall be preserved and maintained, and the Borrower will cause each of
its Subsidiaries to do so in respect of Property owned or used by it; provided,
however, that nothing in this Section 9.2 shall prevent the Borrower or a
Subsidiary from discontinuing the operation or maintenance of any such
Properties if such discontinuance is, in the judgment of the Borrower, desirable
in the conduct of its business or the business of its Subsidiary.
9.3. Taxes. The Borrower will duly pay and discharge, and will
cause each of its Subsidiaries duly to pay and discharge, all taxes, rates,
assessments, fees and governmental charges upon or against it or against its
Properties, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith by appropriate proceedings and reserves in conformity with GAAP have
been provided therefor on the books of the Borrower.
9.4. ERISA. The Borrower will, and will cause each of its
Subsidiaries to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed could
reasonably be expected to result in the imposition of a Lien against any of its
Properties or assets and will promptly notify the Agent of (i) the occurrence of
any reportable event (as defined in ERISA) affecting a Plan, other than any such
event of which the PBGC has waived notice by regulation, (ii) receipt of any
notice from the PBGC of its intention to seek termination of any Plan or
appointment of a trustee therefor, (iii) its or any of its Subsidiaries'
intention to terminate or withdraw from any Plan, and (iv) the occurrence of any
event affecting any Plan which could result in the incurrence by the Borrower or
any of its Subsidiaries of any material liability, fine or penalty, or any
material increase in the contingent liability of the Borrower or any of its
Subsidiaries under any post-retirement Welfare Plan benefit. The Agent will
promptly distribute to each Bank any notice it receives from the Borrower
pursuant to this Section 9.4.
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9.5. Insurance. The Borrower will insure and keep insured, and
will cause each of its Subsidiaries to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it of a
character and to the extent usually insured (subject to self-insured retentions
and deductibles) in accordance with reasonable business practices as determined
in good faith by management of the Borrower. To the extent usually insured
(subject to self-insured retentions and deductibles) in accordance with
reasonable business practices as determined in good faith by management of the
Borrower, the Borrower will also insure, and cause each of its Subsidiaries to
insure such other hazards and risks (including employers' and public and product
liability risks) with good and responsible insurance companies. The Borrower
will upon request of the Agent furnish to the Agent (which shall promptly
furnish the same to each Bank) a summary setting forth the nature and extent of
the insurance maintained pursuant to this Section 9.5.
9.6. Financial Reports and Other Information.
(a) The Borrower will maintain, and will cause each
Subsidiary to maintain, a system of accounting in accordance with GAAP and will
furnish to the Agent and each Bank (and their respective duly authorized
representatives) such information respecting the business and financial
condition of the Borrower and its Subsidiaries as the Agent or any Bank may
reasonably request; and without any request, the Borrower will furnish each of
the following to the Agent (which shall promptly furnish the same to each Bank):
(i) within 60 days after the end of each of the first
three quarterly fiscal periods of the Borrower, a copy of the Borrower's Form
10-Q Report filed with the SEC;
(ii) within 90 days after the end of each fiscal year
of the Borrower, a copy of the Borrower's Form 10-K Report filed with the SEC,
including a copy of the annual audit report of the Borrower and its Subsidiaries
for such year with accompanying financial statements, prepared by the Borrower
and certified by PricewaterhouseCoopers LLP or any other independent public
accountants of recognized national standing selected by the Borrower and
reasonably satisfactory to the Required Banks, in accordance with GAAP;
(iii) within 60 days after the end of each of the first
three quarterly fiscal periods of the Borrower and within 90 days after the end
of each of the fourth quarterly fiscal periods of the Borrower, copies of the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries
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as of the close of such period and the consolidated and consolidating statements
of income of the Borrower and its Subsidiaries for such period;
(iv) as soon as available, and in any event within 90
days after the commencement of each fiscal year of the Borrower, a copy of the
Borrower's consolidated operating budget for such fiscal year, such budget to
show the projected consolidated balance sheet, income statement and statement of
cash flows of the Borrower and its Subsidiaries on a quarterly basis, such
budget to be prepared by the Borrower in reasonable detail and in form
reasonably satisfactory to the Required Banks;
(v) within 60 days after the end of each fiscal quarter
of the Borrower, copies of all proxy statements, other financial statements and
reports the Borrower sends to its shareholders, and copies of all other regular,
periodic and special reports and all registration statements the Borrower files
with the SEC or any successor thereto, or with any national securities
exchanges, in each case, during such fiscal quarter; and
(vi) upon the request from time to time of the Agent,
the Swap Termination Values, together with a description of the method by which
such values were determined, relating to any then-outstanding Swap Contracts to
which the Borrower or any of its Subsidiaries is a party.
(b) Each financial statement furnished to the Banks pursuant to
subsection (i) or (ii) of this Section 9.6 shall be accompanied by (A) a written
certificate signed by the Borrower's chief financial officer or corporate
controller to the effect that no Default or Event of Default has occurred during
the period covered by such statements or, if any such Default or Event of
Default has occurred during such period, setting forth a description of such
Default or Event of Default and specifying the action, if any, taken by the
Borrower to remedy the same and (B) a Compliance Certificate heretoshowing the
calculation of the Net Leverage Ratio and Borrower's compliance with the
covenants set forth in Sections 9.15, 9.16, 9.17, 9.18, 9.20 and 9.26 hereof.
(c) The Borrower will promptly (and in any event within three
(3) Business Days after the chief executive officer, chief operating officer,
president, treasurer or chief financial officer of the Borrower has knowledge
thereof) give notice to the Agent and each Bank:
(i) of the occurrence of any Change of Control Event,
Default or Event of Default;
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(ii) of any default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries, except for a
default or event of default which is not reasonably expected to have a material
adverse effect on the business, operations, Property or financial or other
condition of the Borrower and its Subsidiaries taken as a whole;
(iii) of a material adverse change in the business,
operations, Property or financial or other condition of the Borrower and its
Subsidiaries taken as a whole (including, without limitation, materially adverse
developments with respect to Year 2000 Issues); and
(iv) of any litigation or governmental proceeding of the
type described in Section 7.5 hereof which could reasonably be expected to cause
a material adverse effect upon the business, operations, Property or financial
or other condition of the Borrower and its Subsidiaries taken as a whole.
9.7. Bank Inspection Rights. Upon reasonable notice from any
Bank, the Borrower will permit such Bank (and such officers, agents, accountants
or other representatives of such Bank as any Bank may designate) during normal
business hours to visit and inspect, under the Borrower's guidance, any of the
properties of the Borrower or any of its Subsidiaries, to examine all of their
books of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers, employees and, independent public accountants (and by
this provision the Borrower authorizes such accountants to discuss with the
Banks (and such officers, agents, accountants or other representatives of such
Bank as any Bank may designate) the finances and affairs of the Borrower and its
Subsidiaries) all at such reasonable times and as often as may be reasonably
requested. The Borrower shall not be liable under Section 14.15 hereof for the
cost of any action taken solely under the authority of this Section unless such
action has been taken upon the occurrence and during the continuation of any
Default or Event of Default.
9.8. Conduct of Business. Neither the Borrower nor any
Subsidiary will engage in any line of business if, as a result, the general
nature of the business of the Borrower and its Subsidiaries taken as a whole
would be substantially changed from that conducted on the date hereof.
9.9. Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, permit to exist or to be incurred any Lien
of any kind on any Property owned by the Borrower or any Subsidiary; provided,
however, that this Section 9.9 shall not apply to nor operate to prevent:
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(a) Liens arising by operation of law in connection with
worker's compensation, unemployment insurance, social security obligations,
taxes, assessments, statutory obligations or other similar charges, good faith
deposits, pledges or Liens in connection with bids, tenders, contracts or leases
to which the Borrower or any Subsidiary is a party (other than contracts for
borrowed money), or other deposits required to be made in the ordinary course of
business; provided that in each case the obligation secured is not overdue or,
if overdue, is being contested in good faith by appropriate proceedings and for
which reserves in conformity with GAAP have been provided on the books of the
Borrower;
(b) mechanics', workmen's, materialmen's, landlords',
carriers' or other similar Liens arising in the ordinary course of business (or
deposits to obtain the release of such Liens) securing obligations not due or,
if due, being contested in good faith by appropriate proceedings and for which
reserves in conformity with GAAP have been provided on the books of the
Borrower;
(c) Liens for taxes or assessments or other government
charges or levies on the Borrower or any Subsidiary or their respective
Properties, not yet due or delinquent, or which can thereafter be paid without
penalty, or which are being contested in good faith by appropriate proceedings
and for which reserves in conformity with GAAP have been provided on the books
of the Borrower;
(d) Liens arising out of judgments or awards against the
Borrower or any Subsidiary, or in connection with surety or appeal bonds in
connection with bonding such judgments or awards, the time for appeal from which
or petition for rehearing of which shall not have expired or with respect to
which the Borrower or such Subsidiary shall be prosecuting an appeal or
proceeding for review, and with respect to which it shall have obtained a stay
of execution pending such appeal or proceeding for review; provided that the
aggregate amount of liabilities (including interest and penalties, if any) of
the Borrower and its Subsidiaries secured by such Liens shall not exceed
$5,000,000 at any one time outstanding;
(e) Liens upon any Property acquired by the Borrower or any
Subsidiary to secure any Indebtedness of the Borrower or any Subsidiary incurred
at the time of or within 90 days after the acquisition of such Property to
finance the purchase price of such Property, provided that any such Lien shall
apply only to the Property that was so acquired and the aggregate principal
amount of Indebtedness secured by such Liens shall not exceed $25,000,000 at any
time outstanding;
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(f) Survey exceptions or encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties which
are necessary for the conduct of the activities of the Borrower and any
Subsidiary or which customarily exist on properties of corporations engaged in
similar activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the Borrower or
any Subsidiary;
(g) Liens on Property of a Subsidiary to secure obligations
of such Subsidiary to the Borrower or to another Subsidiary so long as the
obligation so secured is not related to any obligation (other than obligations
hereunder) of the Borrower or such other Subsidiary to any Person;
(h) Liens described on Schedule 9.9 hereto;
(i) Any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Lien referred
to in the foregoing paragraphs (a) through (h), inclusive, provided, however,
that the principal amount of Indebtedness secured thereby shall not exceed the
principal amount of Indebtedness so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or replacement shall be
limited to the Property which was subject to the Lien so extended, renewed or
replaced;
(j) Liens securing Permitted Industrial Revenue Bond
Liabilities, provided, however, that any such Lien shall apply only to the real
property and the machinery and equipment comprising the manufacturing facility
financed, in whole or in part, with the proceeds of the applicable industrial
revenue bond issue;
(k) Liens securing Indebtedness consisting of Capitalized
Lease Obligations provided that such Indebtedness, when combined with
Indebtedness secured by Liens permitted by Section 9.9(m) hereof, does not
exceed $25,000,000 at any time outstanding;
(l) Lines on the assets of Persons which become
Subsidiaries after the date of this Agreement, provided that such Liens existed
at the time the respective Persons became Subsidiaries and were not created in
anticipation thereof;
(m) Liens not otherwise permitted under this Section 9.9 on
Property (other than (i) shares of stock in any Subsidiary and (ii) receivables,
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inventory and similar working capital assets) securing Indebtedness that, when
combined with Capitalized Lease Obligations permitted under Section 9.9(k)
hereof, is in an aggregate principal amount not exceeding $25,000,000 at any
time outstanding.
9.10. Use of Proceeds; Regulation U. The proceeds of each
Borrowing, and the credit provided by Letters of Credit, will be used by the
Borrower for general working capital needs and other general corporate purposes
including acquisitions of businesses and other Investments permitted by Section
9.14. The Borrower will not use any part of the proceeds of any of the
Borrowings or of the Letters of Credit directly or indirectly to purchase or
carry any margin stock (as defined in Section 7.10 hereof) or to extend credit
to others for the purpose of purchasing or carrying any such margin stock.
9.11. Sales and Leasebacks. The Borrower will not, nor will it
permit any Subsidiary to, enter into any arrangement with any bank, insurance
company or other lender or investor providing for the leasing by the Borrower or
any Subsidiary of any Property theretofore owned by it and which has been or is
to be sold or transferred by such owner to such lender or investor, except to
the extent the aggregate principal amount of Capitalized Lease Obligations under
such leases plus the outstanding principal amount of Indebtedness secured by
Liens permitted by Sections 9.9(k) and 9.9(m) hereof (and not separately
permitted by other provisions of Section 9.9) does not exceed $25,000,000 at any
time outstanding.
9.12. Mergers, Consolidations and Sales of Assets. The Borrower
will not, and will not permit any Subsidiary to, (i) consolidate with or be a
party to a merger with any other Person or (ii) sell, lease or otherwise dispose
of all or a "substantial part" of the assets of the Borrower and its
Subsidiaries taken as a whole; provided, however, that:
(a) any Subsidiary of the Borrower may merge or
consolidate with or into or sell, lease or otherwise convey all or a substantial
part of its assets to the Borrower or any Subsidiary of which the Borrower holds
at least the same percentage equity ownership; provided that in any such merger
or consolidation involving the Borrower, the Borrower shall be the surviving or
continuing corporation;
(b) the Borrower or any Subsidiary may consolidate or
merge with any other Person if such Subsidiary, or in the case of such a
transaction involving the Borrower, the Borrower, is the surviving or continuing
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corporation and at the time of such consolidation or merger and after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing; and
(c) the Borrower or any Subsidiary may exchange the
capital stock of or other ownership interests in any Subsidiary, or the assets
of any operating business, owned by it for the capital stock or other ownership
interests in any Person, or the assets of any other operating business, if the
Borrower or its Subsidiary receives fair value in such exchange, and at the time
of such exchange after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing.
As used in this Section 9.12, a sale, lease, transfer or disposition of assets
during any fiscal year shall be deemed to be of a "substantial part" of the
consolidated assets of the Borrower and its Subsidiaries if the net book value
of such assets, when added to the net book value of all other assets (including
without limitation stock in Subsidiaries) sold, leased, transferred or disposed
of by the Borrower and its Subsidiaries during such fiscal year (other than
inventory in the ordinary course of business) and the aggregate consideration
received by Subsidiaries from their issuance or sale of their stock during such
fiscal year (other than to the Borrower or to another Subsidiary) exceeds 10% of
the total assets of the Borrower and its Subsidiaries, determined on a
consolidated basis as of the last day of the immediately preceding fiscal year.
9.13. Use of Property and Facilities; Environmental and Health
and Safety Laws. The Borrower will, and will cause each Subsidiary to, comply in
all material respects with the requirements of all Environmental and Health Laws
applicable to or pertaining to the Properties or business operations of the
Borrower or such Subsidiary. Without limiting the foregoing, the Borrower will
not, and will not permit any Person to, except in accordance with applicable
law, dispose of any Hazardous Material into, onto or upon any real property
owned or operated by the Borrower or any Subsidiary. The Borrower will promptly
provide the Banks with copies of any notice or other instrument of the type
described in the third sentence of Section 7.11 hereof, and in no event later
than five (5) Business Days after an officer of the Borrower receives or gives
such notice or instrument.
9.14. Investments, Acquisitions, Loans, Advances and Guaranties.
The Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances to, any
other Person, or acquire all or any substantial part of the assets or business
of any other Person or division thereof, or be or become liable as endorser,
guarantor, surety or otherwise (such as liability as a general partner) for any
debt, obligation or undertaking of
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any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss, or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another
(cumulatively, all of the foregoing, being "Investments"); provided, however,
that the foregoing provisions shall not apply to nor operate to prevent:
(a) investments in direct obligations of the United States
of America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of America;
provided that any such obligation matures within one year from the date it is
acquired by the Borrower or Subsidiary;
(b) investments in commercial paper rated P-1 by Moody's
Investors Services, Inc. or A-1 by Standard & Poor's Ratings Services maturing
within one year of its date of issuance;
(c) investments in certificates of deposit issued by any
Bank or any United States commercial bank having capital and surplus of not less
than $200,000,000 maturing within one year from the date of issuance thereof or
in banker's acceptances endorsed by any Bank or other such commercial bank and
maturing within six months of the date of acceptance;
(d) investments in repurchase obligations with a term of
not more than seven (7) days for underlying securities of the types described in
subsection (a) above entered into with any bank meeting the qualifications
specified in subsection (c) above, provided all such agreements require physical
delivery of the securities securing such repurchase agreement, except those
delivered through the Federal Reserve Book Entry System:
(e) investments in tax-exempt bonds rated Aa by Moody's
Investors Service, Inc. or AA by Standard & Poor's Rating Services (or having
comparable short-term ratings) maturing (or subject to tender at the option of
the holder) within 31 days;
(f) investments in money market funds that invest solely,
and which are restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding subsections (a),
(b), (c), (d) and (e) above;
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(g) ownership of stock, obligations or securities received
in settlement of debts (created in the ordinary course of business) owing to the
Borrower or any Subsidiary;
(h) endorsements of negotiable instruments for collection
in the ordinary course of business;
(i) loans and advances to employees in the ordinary course
of business for travel, relocation, and similar purposes;
(j) the Subsidiary Guarantee Agreements;
(k) acquisitions of all or any substantial part of the
assets or business of any other Person or division thereof engaged in a line of
business reasonably related or complimentary to that of the Borrower and its
Subsidiaries, or of a majority of the Voting Stock of such a Person, or of
equity interests in any partnership, joint venture or corporation which does not
become a Subsidiary as a result of such acquisition but is engaged (or promptly
after such acquisition will be engaged) in a line of business reasonably related
or complimentary to that of the Borrower and its Subsidiaries, provided that (i)
no Default or Event of Default exists or would exist after giving effect to such
acquisition and (ii) the Board of Directors or other governing body of such
Person whose Property, or Voting Stock or other interests in which, are being so
acquired has approved the terms of such acquisition;
(l) investments by the Borrower in Subsidiaries not
otherwise permitted by this Section 9.14, provided that (i) such Investments
(other than Investments in Wholly-Owned Subsidiaries), when taken together with
investments in partnerships, joint ventures and corporations permitted by
subsection (m) below, aggregate at any one time outstanding not more than the
greater of (x) 5% of the total assets of the Borrower and its Subsidiaries
determined on a consolidated basis as of the last day of the most recently
completed fiscal year or (y) $30,000,000, (ii) the amount of indebtedness or
other obligations of Subsidiaries guaranteed or otherwise similarly supported by
the Borrower by virtue of such Investments at no time exceeds (in the aggregate
at any one time outstanding) the lesser of (x) 15% of the total assets of the
Borrower and its Subsidiaries determined on a consolidated basis as of the last
day of the most recently completed fiscal year or (y) $50,000,000 and (iii)
Investments in Subsidiaries that only become Subsidiaries through such
Investment must comply with the provisions of subsection (k) above;
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(m) investments in partnerships, joint ventures and
corporations (other than Subsidiaries) not otherwise permitted by this Section
9.14, provided that (i) such Investments, when taken together with Investments
in Subsidiaries other than Wholly-Owned Subsidiaries permitted by sub-section
(l) above, aggregate at any one time outstanding not more than the greater of
(x) 5% of the total assets of the Borrower and its Subsidiaries determined on a
consolidated basis as of the last day of the most recently completed fiscal year
or (y) $30,000,000 and (ii) acquisitions of interests in such partnerships,
joint ventures and corporations after the date hereof must comply with the
provisions of subsection (k) above;
(n) liabilities in respect of letters of credit securing
Permitted Industrial Revenue Bond Liabilities and Letters of Credit hereunder;
and
(o) investments not otherwise permitted under this Section
9.14 in an aggregate amount not exceeding $10,000,000 at any time.
In determining the amount of investments, acquisitions, loans,
advances and guarantees permitted under this Section 9.14, investments and
acquisitions shall always be valued at the original cost thereof (regardless of
any subsequent appreciation or depreciation therein), loans and advances shall
be valued at the principal amount thereof then remaining unpaid, and guarantees
shall be valued at the amount of obligations guaranteed thereby.
9.15. Consolidated Net Worth. The Borrower will at all times
maintain a Consolidated Net Worth of not less than $160,000,000.
9.16. Leverage Ratio. The Borrower will at all times maintain
its Leverage Ratio at not more than 3.25 to 1.00.
9.17.Debt to Capitalization Ratio. The Borrower will at all
times maintain a ratio of Total Debt of the Borrower and its Subsidiaries to
Total Capitalization of the Borrower and its Subsidiaries of not more than .50
to 1.00.
9.18.Interest Coverage Ratio. The Borrower will at all times
maintain its Interest Coverage Ratio at not less than 3.0:1.00.
9.19. Dividends and Other Shareholder Distributions. The
Borrower shall only declare or pay any dividends or make a distribution of any
kind (including by redemption or purchase) on its outstanding capital stock, if
no Default or Event of Default exists prior to or would result after giving
effect to such action.
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9.20. Subsidiary Debt. No Subsidiary shall have outstanding at
any time any Debt other than:
(a) Debt of Wholly-Owned Subsidiaries to the Borrower; and
(b) Debt of Subsidiaries not otherwise permitted by this
Section aggregating not more than the lesser of (i) $40,000,000 and (ii) ten
percent (10%) of the total assets of the Borrower and its Subsidiaries
determined on a consolidated basis as of the last day of the Borrower's most
recently completed fiscal year.
9.21. Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, enter into or be a party to any contract,
agreement, transaction or arrangement with any of its Affiliates (other than the
Borrower or any of its Subsidiaries), on terms and conditions which are less
favorable to the Borrower or such Subsidiary than would be usual and customary
in similar contracts, agreements, transactions or arrangements between Persons
not affiliated with each other.
9.22. Compliance with Laws. Without limiting any of the other
covenants of the Borrower in this Section 9, the Borrower will, and will cause
each Subsidiary to, conduct its business, and otherwise be, in compliance with
all applicable laws, regulations, ordinances and orders of any governmental or
judicial authorities; provided, however, that neither the Borrower nor any
Subsidiary shall be required to comply with any such law, regulation, ordinance
or order if (x) it shall be contesting such law, regulation, ordinance or order
in good faith by appropriate proceedings and reserves in conformity with GAAP
have been provided therefor on the books of the Borrower or such Subsidiary, as
the case may be, or (y) the failure to comply therewith is not reasonably
expected to have, in the aggregate, a material adverse effect on the business,
operations, property or financial or other condition of the Borrower and its
Subsidiaries taken as a whole.
9.23. Change in Fiscal Year. The Borrower will not change its
fiscal year from its present basis without the prior written consent of the
Banks.
9.24. Year 2000. The Borrower will take, and will cause each of
its Subsidiaries to take, all such actions as are reasonably necessary to
successfully implement the Year 2000 Program and to assure that Year 2000 Issues
will not have a material adverse effect on the business, operations, Property or
financial or other conditions of the Borrower and its Subsidiaries taken as a
whole, including
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without limitation making reasonable inquiries of its material suppliers,
vendors and customers. At the request of the Agent, the Borrower will provide a
description of the Year 2000 Program, together with any update or progress
reports with respect thereto.
9.25. Mark IV Acquisition. The Borrower will within 10 days
after the closing of the Mark IV Acquisition (a) furnish to the Agent a copy for
each Bank of the executed principal Mark IV Acquisition Documents, certified to
be true and correct by the Secretary or an Assistant Secretary of the Borrower,
and (b) cause each Significant Subsidiary created or acquired in connection with
the Mark IV Acquisition to execute and deliver a Subsidiary Guaranty Agreement
and furnish such Subsidiary Guaranty Agreements, and the related documentation
fulfilling the requirement of Sections 8.1(a) through (d), to the Agent, and
will promptly thereafter furnish to the Agent a copy for each Bank of the other
Mark IV Acquisition Documents.
9.26. Post-Closing Legal Opinions. The Borrower will, within 30
days after the initial Credit Event furnish to the Agent a copy for each Bank of
(a) the opinion of Ohio counsel to United Air Specialists, Inc. as to the
matters addressed in paragraphs 1 and 3 of the form of opinion of counsel
attached hereto as Exhibit F, (b) the opinion of Kentucky counsel to Airguard
Industries, Inc. as to such matters and (c) the opinion of Sidley & Austin,
supplementing the opinion delivered pursuant to Section 8.1(a) and which,
assuming the accuracy of the opinions described in clauses (a) and (b) above,
opines with respect to United Air Specialists, Inc. and Airguard Industries,
Inc. on the matters addressed for the other Guarantors in their initial opinion.
9.26. Priority Debt. Notwithstanding any provision in this
Agreement to the contrary, the Borrower shall not permit Priority Debt to exceed
15% of Consolidated Net Worth at any time.
10. Events of Default and Remedies.
10.1. Events of Default. Any one or more of the following shall
constitute an Event of Default:
(a) (i) default in the payment when due of any principal
on any Note or any Loan evidenced thereby or any Reimbursement Obligation
(whether at the stated maturity thereof or at any time provided in any Credit
Document); or (ii) default for five (5) days in the payment when due of interest
on any Note or any Loan evidenced thereby or any other Obligation;
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(b) default by the Borrower or any Subsidiary in the
observance or performance of any covenant set forth in Sections 9.9, 9.12, 9.14,
9.15, 9.16, 9.17, 9.18, 9.19, 9.20 or 9.26 hereof;
(c) default by the Borrower or any Subsidiary in the
observance or performance of any provision hereof or of any other Credit
Document not mentioned in (a) or (b) above, which is not remedied within thirty
(30) days after notice thereof to the Borrower by the Agent or any Bank;
(d) (i) failure to pay when due Debt in an aggregate
principal amount of $2,000,000 or more of the Borrower or any Subsidiary or (ii)
default shall occur under one or more indentures, agreements or other
instruments under which any Debt of the Borrower or any Subsidiary in an
aggregate principal amount of $2,000,000 or more may be issued or created and
such default shall continue for a period of time sufficient to permit the holder
or beneficiary of such Debt or a trustee therefor to cause the acceleration of
the maturity of any such Debt or any mandatory unscheduled prepayment, purchase
or funding thereof or (iii) there shall occur under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from [a] any event
of default under such Swap Contract as to which the Borrower or any Subsidiary
is the Defaulting Party (as so defined) or [b] any Termination Event (as so
defined) as to which the Borrower or any Subsidiary is an Affected Party (as so
defined), and, in either event, the Swap Termination Value owed by the Borrower
or such Subsidiary as a result thereof is $2,000,000 or more;
(e) any representation or warranty made herein or in any
other Credit Document by the Borrower or any Subsidiary, or in any statement or
certificate furnished pursuant hereto or pursuant to any other Credit Document
by the Borrower or any Subsidiary, or in connection with any Credit Document,
proves untrue in any material respect as of the date of the issuance or making,
or deemed making or issuance, thereof;
(f) the Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States Bankruptcy
Code, as amended, or any analogous action is taken under any other applicable
law relating to bankruptcy or insolvency, (ii) fail to pay, or admit in writing
its inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any substantial part of its Property,
(v) institute any proceeding seeking to have entered against it an order for
relief under the United States Bankruptcy Code, as amended, to adjudicate it
insolvent, or seeking dissolution,
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winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (vi)
take any corporate action (such as the passage by the Borrower's board of
directors of a resolution) in furtherance of any matter described in parts
(i)-(v) above, or (vii) fail to contest in good faith any appointment or
proceeding described in Section 10.1(g) hereof;
(g) a custodian, receiver, trustee, examiner, liquidator
or similar official shall be appointed for the Borrower or any Subsidiary or any
substantial part of any of their Property, or a proceeding described in Section
10.1(f)(i) shall be instituted against the Borrower or any Subsidiary, and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of sixty (60) days;
(h) the Borrower or any Subsidiary shall fail within
thirty (30) days to pay, bond or otherwise discharge any judgment or order for
the payment of money in excess of $2,000,000, which is not stayed on appeal or
otherwise being appropriately contested in good faith in a manner that stays
execution thereon; or
(i) The Borrower or any other member of the Controlled
Group shall fail to pay when due an amount or amounts aggregating in excess of
$500,000 which it shall have become liable to pay to the PBGC or to a Plan under
Title IV of ERISA; or notice of intent to terminate a Plan or Plans having
aggregate Unfunded Vested Liabilities in excess of $500,000 (collectively, a
"Material Plan") shall be filed under Title IV of ERISA by the Borrower or any
Subsidiary or any other member of the Controlled Group, any plan administrator
or any combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a fiduciary
of any Material Plan against the Borrower or any other member of the Controlled
Group to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within thirty (30) days thereafter; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated.
10.2. Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsections (f) or (g) of Section 10.1 hereof has
occurred and is continuing, the Agent shall, by written notice to the Borrower:
(a) if so directed by the Required Banks, terminate the remaining Commitments
and Swing Line Commitment and all other obligations of the Banks hereunder on
the date
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stated in such notice (which may be the date thereof); (b) if so directed by the
Required Banks, declare the principal of and the accrued interest on all
outstanding Notes to be forthwith due and payable and thereupon all outstanding
Notes, including both principal and interest thereon, shall be and become
immediately due and payable together with all other amounts payable under the
Credit Documents without further demand, presentment, protest or notice of any
kind; and (c) if so directed by the Required Banks, demand that the Borrower
immediately pay to the Agent subject to Section 10.4, the full amount then
available for drawing under each or any Letter of Credit, and the Borrower
agrees to immediately make such payment and acknowledges and agrees that the
Banks shall have the right to require the Borrower to specifically perform such
undertaking whether or not any drawings or other demands for payment have been
made under any Letter of Credit. The Agent, after giving notice to the Borrower
pursuant to Section 10.1(c) or this Section 10.2, shall also promptly send a
copy of such notice to the other Banks, but the failure to do so shall not
impair or annul the effect of such notice.
10.3. Bankruptcy Defaults. When any Event of Default described
in subsections (f) or (g) of Section 10.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under the Credit Documents without presentment,
demand, protest or notice of any kind, the obligation of the Banks to extend
further credit pursuant to any of the terms hereof shall immediately terminate
and the Borrower shall immediately pay to the Agent, subject to Section 10.4,
the full amount then available for drawing under all outstanding Letters of
Credit, the Borrower acknowledging that the Banks, and the Agent on their
behalf, shall have the right to require the Borrower to specifically perform
such under-taking whether or not any draws or other demands for payment have
been made under any of the Letters of Credit.
10.4. Collateral for Undrawn Letters of Credit.
(a) If the payment or prepayment of the amount available
for drawing under any or all outstanding Letters of Credit is required under
Section 10.2 or 10.3 above, the Borrower shall forthwith pay the amount required
to be so paid or prepaid, to be held by the Agent as provided in subsection (b)
below.
(b) All amounts prepaid pursuant to subsection (a) above
shall be held by the Agent in a separate collateral account (such account, and
the credit balances, properties and any investments from time to time held
therein, and any substitutions for such account, any certificate of deposit or
other instrument
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evidencing any of the foregoing and all proceeds of and earnings on any of the
foregoing being collectively called the "Account") as security for, and for
application by the Agent (to the extent available) to, the reimbursement of any
payment under any Letter of Credit then or thereafter made by the Issuing Bank,
and to the payment of the unpaid balance of any Loans and all other Obligations,
any such applications to be made in such order. The Account shall be held in the
name of and subject to the exclusive dominion and control of the Agent for the
benefit of the Agent, the Issuing Bank and the Banks. If and when requested by
the Borrower, the Agent shall invest funds held in the Account from time to time
in direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America with a remaining
maturity of one year or less, provided that the Agent is irrevocably authorized
to sell investments held in the Account when and as required to make payments
out of the Account for application to amounts due and owing from the Borrower to
the Agent, the Issuing Bank or Banks; provided, however, that if (i) the
Borrower shall have made payment of all such obligations referred to in
subsection (a) above and (ii) no Letters of Credit, Commitments, Loans or other
Obligations remain outstanding hereunder, then the Agent shall repay to the
Borrower any remaining amounts held in the Account.
10.5. Notice of Default. The Agent shall give notice to the
Borrower under Section 10.1(c) hereof promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
10.6. Expenses. The Borrower agrees to pay to the Agent and each
Bank, and any other holder of any Note outstanding hereunder, all reasonable
expenses incurred or paid by the Agent and such Bank or any such holder,
including reasonable attorneys' fees and court costs, in connection with any
Default or Event of Default by the Borrower hereunder or in connection with the
enforcement of any of the Credit Documents.
11. Change in Circumstances.
11.1. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time after the date hereof any change in
applicable law or regulation or in the interpretation thereof makes it unlawful
for any Bank to make or continue to maintain Eurocurrency Loans or to perform
its obligations as contemplated hereby, such Bank shall promptly give notice
thereof to the Borrower and such Bank's obligations to make or maintain
Eurocurrency Loans under this Agreement shall terminate until it is no longer
unlawful for such Bank to make or maintain Eurocurrency Loans. The Borrower
shall prepay on demand the outstanding principal amount of any such affected
Eurocurrency
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Loans, together with all interest accrued thereon at a rate per annum equal to
the interest rate applicable to such Loan; provided, however, that (i) the
Borrower may delay such prepayment until the last day of the then-current
Interest Period for such affected Eurodollar Loans if permitted by law and (ii)
subject to all of the terms and conditions of this Agreement, the Borrower may
then elect to borrow the principal amount of the affected Eurocurrency Loans
from such Bank, by means of Domestic Rate Loans from such Bank, which Domestic
Rate Loans shall not be made ratably by the Banks but only from such affected
Bank. The Borrower shall not be required to pay any amount under Section 3.6 in
connection with any prepayment required by this Section 11.1.
11.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for
any Borrowing of Eurocurrency Loans:
(a) the Agent determines that deposits in U.S. Dollars or
the applicable Alternative Currency (in the applicable amounts) are not being
offered to it in the eurocurrency interbank market for such Interest Period, or
that by reason of circumstances affecting the interbank eurocurrency market
adequate and reasonable means do not exist for ascertaining the applicable
LIBOR, or
(b) any Bank shall advise the Agent that LIBOR as
determined by the Agent will not adequately and fairly reflect the cost to such
Bank of funding its Eurocurrency Loan for such Interest Period for a reason
other than an increase in funding costs resulting from a decrease in the
creditworthiness of such Bank,
then the Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to
make Eurocurrency Loans in the currency so affected shall be suspended.
11.3. Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change 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 its Lending Office) with any request or
directive (whether or not having the force of law but, if not having the force
of law, compliance with which is customary in the relevant jurisdiction) of any
such authority, central bank or comparable agency:
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(i) shall subject any Bank (or its Lending Office) to
any tax, duty or other charge with respect to its Eurocurrency Loans, its Notes,
its Letter(s) of Credit, or its participation in any thereof, any Reimbursement
Obligations owed to it or its obligation to make Eurocurrency Loans, issue a
Letter of Credit, or to participate therein, or shall change the basis of
taxation of payments to any Bank (or its Lending Office) of the principal of or
interest on its Eurocurrency Loans, Letter(s) of Credit, or participations
therein or any other amounts due under this Agreement in respect of its
Eurocurrency Loans, Letter(s) of Credit, or participations therein, any
Reimbursement Obligations owed to it, or its obligation to make Eurocurrency
Loans, issue a Letter of Credit, or acquire participations therein (except for
changes in any tax on the overall net income or profits of such Bank or its
Lending Office imposed by the jurisdiction in which such Bank or its lending
office is incorporated in which such Bank's principal executive office or
Lending Office is located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Eurocurrency Loans any such
requirement included in an applicable Eurocurrency Reserve Percentage) against
assets of, deposits with or for the account of, or credit extended by, any Bank
(or its Lending Office) or shall impose on any Bank (or its Lending Office) or
on the interbank market any other condition affecting its Eurocurrency Loans,
its Notes, its Letter(s) of Credit, or its participation in any thereof, any
Reimbursement Obligation owed to it, or its obligation to make Eurocurrency
Loans, to issue a Letter of Credit, or to participate therein;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Eurocurrency Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Bank (or its Lending Office)
under this Agreement or under its Notes with respect thereto, by an amount
deemed by such Bank to be material, then, within ten (10) days after demand by
such Bank (with a copy to the Agent) at any time within 120 days after the date
on which such Bank knows or has reason to know of its right to additional
compensation under this Section 11.3(a), the Borrower shall promptly pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction; provided, however, that if any such Bank fails to
make demand within such 120-day period, such Bank shall only be entitled to
additional compensation for any such costs incurred from and after the date that
is 120 days prior to the date such Bank makes such demand; and provided further
that before making any
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such demand, each Bank agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost and would not, in the reasonable
judgment of such Bank, be otherwise disadvantageous to such Bank.
(b) If, after the date hereof, any Bank or the Agent shall have
determined that the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein (including, without limitation, any
revision in the Final Risk-Based Capital Guidelines of the Board of Governors of
the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225,
Appendix A) or of the Office of the Comptroller of the Currency (12 CFR Part 3,
Appendix A), or in any other applicable capital rules heretofore adopted and
issued by any governmental authority), or any change 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 its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law but, if not having the
force of law, compliance with which is customary in the applicable jurisdiction)
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 capital, or on the capital
of any corporation controlling such Bank, as a consequence of its obligations
hereunder to a level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
with respect to capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within ten (10) days after demand by such Bank
(with a copy to the Agent) at any time within 120 days after the date on which
such Bank knows or has reason to know of its right to additional compensation
under this Section 11.3(b), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such reduction; provided,
however, that if any such Bank fails to make demand within such 120-day period,
such Bank shall only be entitled to additional compensation for any such costs
incurred from and after the date that is 120 days prior to the date such Bank
makes such demand.
(c) No Bank may request additional amounts under this Section
11.3 unless it is generally making similar requests of other borrowers similarly
situated. A certificate of any Bank claiming compensation under this Section
11.3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of demonstrable error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
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11.4. Lending Offices. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a written notice to the
Borrower and the Agent.
11.5. Discretion of Bank as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if each Bank had
actually funded and maintained each Eurocurrency Loan that is a Committed
Revolving Loan through the purchase of deposits of U.S. Dollars or the
applicable Alternative Currency in the Eurocurrency interbank market having a
maturity corresponding to such Loan's Interest Period and bearing an interest
rate equal to LIBOR for such Interest Period.
12. The Agent and the Co-Agents.
12.1. Appointment and Authorization of Agent. Each Bank hereby
appoints Firstar Bank Milwaukee, National Association as the Agent under the
Credit Documents and hereby authorizes the Agent to take such action as Agent on
its behalf and to exercise such powers under the Credit Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto. The Banks expressly agree that the Agent is not
acting as a fiduciary of the Banks in respect to the Credit Documents, the
Borrowers or otherwise, and nothing herein or in any of the other Credit
Documents shall result in any duties or obligations on the Agent or any of the
Banks except as expressly set forth herein.
12.2. Agent and its Affiliates. The Agent shall have the same
rights and powers under this Agreement and the other Credit Documents as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and the Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower or
any Affiliate of the Borrower as if it were not the Agent under the Credit
Documents. The term "Bank" as used herein and in all other Credit Documents,
unless the context otherwise clearly requires, includes the Agent in its
individual capacity as a Bank.
12.3. Action by Agent. If the Agent receives from the Borrower
a written notice of an Event of Default pursuant to Section 9.6(c)(i) hereof,
the Agent shall promptly give each of the Banks written notice thereof. The
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obligations of the Agent under the Credit Documents are only those expressly set
forth therein. Without limiting the generality of the foregoing, the Agent shall
not be required to take any action hereunder with respect to any Default or
Event of Default, except as expressly provided in Sections 10.2 and 10.5. In no
event, however, shall the Agent be required to take any action in violation of
applicable law or of any provision of any Credit Document, and the Agent shall
in all cases be fully justified in failing or refusing to act hereunder or under
any other Credit Document unless it shall be first indemnified to its reasonable
satisfaction by the Banks against any and all costs, expense, and liability
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall be entitled to assume that no Default or Event of
Default exists unless notified to the contrary by a Bank or the Borrower. In all
cases in which this Agreement and the other Credit Documents do not require the
Agent to take certain actions, the Agent shall be fully justified in using its
discretion in failing to take or in taking any action hereunder and thereunder.
12.4. Consultation with Experts. The Agent may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
12.5. Liability of Agent; Credit Decision. Neither the Agent nor
any of its directors, officers, agents, or employees shall be liable for any
action taken or not taken by it in connection with the Credit Documents (i) with
the consent or at the request of the Required Banks or (ii) in the absence of
its own gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement, any other Credit Document
or any Credit Event, (ii) the performance or observance of any of the covenants
or agreements of the Borrower or any Guarantor contained herein or in any other
Credit Document; (iii) the satisfaction of any condition specified in Section 8
hereof, except receipt of items required to be delivered to the Agent; or (iv)
the validity, effectiveness, genuineness, enforceability, perfection, value,
worth or collectibility hereof or of any other Credit Document or of any other
documents or writing furnished in connection with any Credit Document; and, the
Agent makes no representation of any kind or character with respect to any such
matter mentioned in this sentence. The Agent may execute any of its duties under
any of the Credit Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Banks, the Borrower, or any
Guarantor or any other Person for the default or misconduct of any such agents
or attorneys-in-fact selected with reasonable care. The Agent shall not incur
any liability by acting in reliance upon any notice,
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consent, certificate, other document or statement (whether written or oral)
believed by it to be genuine or to be sent by the proper party or parties. In
particular and without limiting any of the foregoing, the Agent shall have no
responsibility for confirming the accuracy of any Compliance Certificate or
other document or instrument received by it under the Credit Documents. The
Agent may treat the payee of any Note as the holder thereof until written notice
of transfer shall have been filed with the Agent signed by such payee in form
satisfactory to the Agent. Each Bank acknowledges that it has independently and
without reliance on the Agent or any other Bank, and based upon such
information, investigations and inquiries as it deems appropriate, made its own
credit analysis and decision to extend credit to the Borrower in the manner set
forth in the Credit Documents. It shall be the responsibility of each Bank to
keep itself informed as to the creditworthiness of the Borrower and the
Guarantors, and the Agent shall have no liability to any Bank with respect
thereto.
12.6. Indemnity. The Banks shall ratably, in accordance with
their respective Percentages, indemnify and hold the Agent, and its directors,
officers, employees, agents and representatives harmless from and against any
liabilities, losses, costs or expenses suffered or incurred by it under any
Credit Document or in connection with the transactions contemplated thereby,
regardless of when asserted or arising, except to the extent they are promptly
reimbursed for the same by the Borrower and except to the extent that any event
giving rise to a claim was caused by the gross negligence or willful misconduct
of the party seeking to be indemnified. The obligations of the Banks under this
Section 12.6 shall survive termination of this Agreement.
12.7. Resignation of Agent and Successor Agent. The Agent may,
and shall at the request of the Required Banks, resign at any time by giving
written notice thereof to the Banks and the Borrower. Upon any such resignation
of the Agent, the Required Banks shall have the right to appoint a successor
Agent with the consent of the Borrower. If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be any Bank hereunder or any commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as the Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring or removed Agent under the Credit Documents, and the retiring Agent
shall be discharged from its duties and obligations thereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Section
13 and all protective provisions of the other Credit
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Documents shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.
12.8. Co-Agents. Neither of the Persons identified on the facing
page or signature pages of this Agreement as a co-agent shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Banks as such. Without limiting the foregoing, none
of the Banks so identified shall have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied, and
will not rely, on any of the Banks so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
13. The Guarantees.
13.1. The Guarantees. To induce the Banks to provide the credits
described herein and in consideration of benefits expected to accrue to each
Guarantor by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, each Guarantor hereby
unconditionally and irrevocably guarantees jointly and severally to the Agent,
the Banks, and each other holder of an Obligation, the due and punctual payment
of all present and future indebtedness of the Borrower evidenced by or arising
out of the Credit Documents, including, but not limited to, the due and punctual
payment of principal of and interest on the Notes and the due and punctual
payment of all other Obligations now or hereafter owed by the Borrower under the
Credit Documents as and when the same shall become due and payable, whether at
stated maturity, by acceleration or otherwise, according to the terms hereof and
thereof. In case of failure by the Borrower punctually to pay any indebtedness
or other Obligations guaranteed hereby, each Guarantor hereby unconditionally
agrees jointly and severally to make such payment or to cause such payment to be
made punctually as and when the same shall become due and payable, whether at
stated maturity, by acceleration or otherwise, and as if such payment were made
by the Borrower.
13.2. Guarantee Unconditional. The obligations of each Guarantor
as a guarantor under this Section 13 shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver
or release in respect of any obligation of the Borrower or of any other
Guarantor under this Agreement or any other Credit Document or by operation of
law or otherwise;
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(b) any modification or amendment of or supplement to this
Agreement or any other Credit Document;
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting, the Borrower, any other Guarantor, or any of their
respective assets, or any resulting release or discharge of any obligation of
the Borrower or of any other Guarantor contained in any Credit Document;
(d) the existence of any claim, set-off or other rights
which the Guarantor may have at any time against the Agent, any Bank or any
other Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim
or demand or any exercise of, or failure to exercise, any rights or remedies
against the Borrower, any other Guarantor or any other Person or Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation (other than the Obligations) of the
Borrower, regardless of what obligations of the Borrower remain unpaid;
(g) any invalidity or unenforceability relating to or
against the Borrower or any other Guarantor for any reason of this Agreement or
of any other Credit Document or any provision of applicable law or regulation
purporting to prohibit the payment by the Borrower or any other Guarantor of the
principal of or interest on any Note or any other amount payable by it under the
Credit Documents; or
(h) any other act or omission to act or delay of any kind
by the Agent, any Bank or any other Person or any other circumstance whatsoever
that might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of the obligations of the Guarantor under this Section 13.
13.3. Discharge Only Upon Payment in Full: Reinstatement in
Certain Circumstances. Each Guarantor's obligations under this Section 13 shall
remain in full force and effect until the Commitments are terminated and the
principal of and interest on the Notes and all other amounts payable by the
Borrower under this Agreement and all other Credit Documents shall have been
paid in full. If at any time any payment of the principal of or interest on any
Note or any other amount payable by the Borrower under the Credit Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
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bankruptcy or reorganization of the Borrower or of a Guarantor, or otherwise,
each Guarantor's obligations under this Section 13 with respect to such payment
shall be reinstated at such time as though such payment had become due but had
not been made at such time.
13.4 Waivers.
(a) General. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the Agent, any
Bank or any other Person against the Borrower, another Guarantor or any other
Person.
(b) Subrogation and Contribution. Each Guarantor hereby
irrevocably agrees that, until the Obligations have been paid in full, the
Commitments have been terminated and all Letters of Credit have terminated or
expired, it shall not exercise any claim or other right it may now or hereafter
acquire against the Borrower or any other Guarantor that arises from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Section 13 or any other Credit Document, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, or any right to participate in any claim or remedy of the
Agent, any Bank or any other holder of an Obligation against the Borrower or any
other Guarantor whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including without limitation, the right
to take or receive from the Borrower or any other Guarantor directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other right.
13.5 Limit on Recovery. Notwithstanding any other provision hereof, the
right to recovery of the holders of the Obligations against each Guarantor under
this Section 13 shall not exceed $1.00 less than the amount which would render
such Guarantor's obligations under this Section 13 void or voidable under
applicable law, including without limitation fraudulent conveyance law.
13.6 Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Borrower under this Agreement or any other Credit
Document is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement or the other Credit Documents shall nonetheless be payable
jointly and severally by the Guarantors hereunder forthwith on demand by the
Agent made at the request of the Required Banks.
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14. Miscellaneous.
14.1. Withholding Taxes.
(a) Payments Free of Withholding. Except as otherwise
required by law and subject to Section 14.1(b) hereof, each payment by the
Borrower and each Guarantor under this Agreement or the other Credit Documents
shall be made without withholding for or on account of any present or future
taxes (other than overall net income taxes on the recipient) imposed by or
within the jurisdiction in which the Borrower or such Guarantor is domiciled,
any jurisdiction from which the Borrower or such Guarantor makes any payment, or
(in each case) any political subdivision or taxing authority thereof or therein.
If any such withholding is so required, the Borrower or relevant Guarantor shall
make the withholding, pay the amount withheld to the appropriate governmental
authority before penalties attach thereto or interest accrues thereon and
forthwith pay such additional amount as may be necessary to ensure that the net
amount actually received by each Bank and the Agent free and clear of such taxes
(including such taxes on such additional amount) is equal to the amount which
that Bank or the Agent (as the case may be) would have received had such
withholding not been made. If the Agent or any Bank pays any amount in respect
of any such taxes, penalties or interest the Borrower shall reimburse the Agent
or that Bank for that payment on demand in the currency in which such payment
was made. If the Borrower or any Guarantor pays any such taxes, penalties or
interest, it shall deliver official tax receipts evidencing that payment or
certified copies thereof to the Bank or Agent on whose account such withholding
was made (with a copy to the Agent if not the recipient of the original) on or
before the thirtieth day after payment. If any Bank or the Agent determines it
has received or been granted a credit against or relief or remission for, or
repayment of, any taxes paid or payable by it because of any taxes, penalties or
interest paid by the Borrower or any Guarantor and evidenced by such a tax
receipt, such Bank or Agent shall, to the extent it can do so without prejudice
to the retention of the amount of such credit, relief, remission or repayment,
pay to the Borrower or such Guarantor as applicable, such amount as such Bank or
Agent determines is attributable to such deduction or withholding and which will
leave such Bank or Agent (after such payment) in no better or worse position
than it would have been in if the Borrower had not been required to make such
deduction or withholding. Nothing in this Agreement shall interfere with the
right of each Bank and the Agent to arrange its tax affairs in whatever manner
it thinks fit nor oblige any Bank or the Agent to disclose any information
relating to its tax affairs or any computations in connection with such taxes.
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(b) U.S. Withholding Tax Exemptions. Each Bank that is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrower and the Agent on or before the earlier of the
date the initial Borrowing is made hereunder and thirty (30) days after the date
hereof, two duly completed and signed copies of either Form 1001 (relating to
such Bank and entitling it to a complete exemption from withholding under the
Code on all amounts to be received by such Bank, including fees, pursuant to the
Credit Documents and the Loans) or Form 4224 (relating to all amounts to be
received by such Bank, including fees, pursuant to the Credit Documents and the
Loans) of the United States Internal Revenue Service. Thereafter and from time
to time, each Bank shall submit to the Borrower and the Agent such additional
duly completed and signed copies of one or the other of such Forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may be (i) requested by the Borrower in a written
notice, directly or through the Agent, to such Bank and (ii) required under
then-current United States law or regulations to avoid or reduce United States
withholding taxes on payments in respect of all amounts to be received by such
Bank, including fees, pursuant to the Credit Documents or the Loans.
Notwithstanding any provision of this Agreement to the contrary, the Borrower
shall not be required to make any payment under Section 14.1(a) to any Bank that
fails to comply with this Section 14.1(b) unless such failure is due to one of
the reasons specified in Section 14.1(c).
(c) Inability of Bank to Submit Forms. If any Bank
determines, as a result of any change in applicable law, regulation or treaty,
or in any official application or interpretation thereof, in each case after the
date hereof, that it is unable to submit to the Borrower or Agent any form or
certificate that such Bank is obligated to submit pursuant to subsection (b) of
this Section 14.1 or that such Bank is required to withdraw or cancel any such
form or certificate previously submitted or any such form or certificate
otherwise becomes ineffective or inaccurate, such Bank shall promptly notify the
Borrower and Agent of such fact (and the Bank shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable).
(d) If any Bank requests any payment under this Section
13, such Bank shall use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Lending Office
if such designation would result in such Bank not requesting such payments.
14.2. No Waiver of Rights. No delay or failure on the part of
the Agent or any Bank or on the part of the holder or holders of any Note in the
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exercise of any power or right under any Credit Document shall operate as a
waiver thereof, nor as an acquiescence in any default, nor shall any single or
partial exercise thereof preclude any other or further exercise of any other
power or right, and the rights and remedies hereunder of the Agent, the Banks
and the holder or holders of any Notes are cumulative to, and not exclusive of,
any rights or remedies which any of them would otherwise have.
14.3. Non-Business Day. If any payment of principal or interest
on any Loan or of any other Obligation shall fall due on a day which is not a
Business Day, interest or fees (as applicable) at the rate, if any, such Loan or
other Obligation bears for the period prior to maturity shall continue to accrue
on such Obligation from the stated due date thereof to and including the next
succeeding Business Day, on which the same shall be payable.
14.4. Documentary Taxes. The Borrower agrees that it will pay
any documentary, stamp or similar taxes payable in respect to any Credit
Document, including interest and penalties, in the event any such taxes are
assessed, irrespective of when such assessment is made and whether or not any
credit is then in use or available hereunder.
14.5. Survival of Representations. All representations and
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and the other Credit Documents, and
shall continue in full force and effect with respect to the date as of which
they were made as long as any credit is in use or available hereunder.
14.6. Survival of Indemnities. All indemnities and all other
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks with respect to the Loans, including, but not
limited to, Section 3.6, Section 11.3 and Section 14.15 hereof, shall survive
the termination of this Agreement and the other Credit Documents and the payment
of the Loans and all other Obligations.
14.7. Sharing of Set-Off. Each Bank agrees with each other Bank
a party hereto that if such Bank shall receive and retain any payment, whether
by set-off or application of deposit balances or otherwise ("Set-off'), on any
of the Loans or Reimbursement Obligations in excess of its ratable share of
payments on all such obligations then outstanding to the Banks, then such Bank
shall purchase for cash, at face value but without recourse, ratably from each
of the other Banks such amount of the Loans or Reimbursement Obligations, or
participations therein, held by each such other Banks (or interest therein) as
shall be necessary to cause such Bank to share such excess payment ratably with
all the other Banks;
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provided, however, that if any such purchase is made by any Bank, and if such
excess payment or part thereof is thereafter recovered from such purchasing
Bank, the related purchases from the other Banks shall be rescinded ratably and
the purchase price restored as to the portion of such excess payment so
recovered, but without interest. For purposes of this Section 14.7, amounts owed
to or recovered by, the Agent in connection with Reimbursement Obligations in
which Banks have been required to fund their participation shall be treated as
amounts owed to or recovered by the Agent as a Bank hereunder.
14.8. Notices. Except as otherwise specified herein, all notices
under the Credit Documents shall be in writing (including telecopy or other
electronic communication) and shall be given to a party hereunder at its address
or telecopier number set forth below or such other address or telecopier number
as such party may hereafter specify by notice to the Agent and the Borrower,
given by courier, by United States certified or registered mail, or by other
telecommunication device capable of creating a written record of such notice and
its receipt. Notices under the Credit Documents to the Banks and the Agent shall
be addressed to their respective addresses, telecopier or telephone numbers set
forth on the signature pages hereof, and to the Borrower and the Guarantors to:
CLARCOR Inc.
2323 Sixth Street
P.O. Box 7007
Rockford, Illinois 61125
Attention: Chief Financial Officer
Telecopy: (815) 962-8371
Telephone: (815) 961-5717
Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section 14.8 or on the signature pages
hereof and a confirmation of receipt of such telecopy has been received by the
sender, (ii) if given by courier, when delivered, (iii) if given by mail, three
Business Days after such communication is deposited in the mail, registered with
return receipt requested, addressed as aforesaid or (iv) if given by any other
means, when delivered at the addresses specified in this Section 14.8 or on the
signature pages hereof; provided that any notice given pursuant to Section 1 or
2 hereof shall be effective only upon receipt.
14.9. Counterparts. This Agreement may be executed in any number
of counterpart signature pages, and by the different parties on different
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counterparts, each of which when executed shall be deemed an original but all
such counterparts taken together shall constitute one and the same instrument.
14.10. Successors and Assigns. This Agreement shall be binding
upon the Borrower and its successors and assigns, and shall inure to the benefit
of each of the Banks and the benefit of their respective successors and assigns,
including any subsequent holder of any Note. The Borrower may not assign any of
its rights or obligations under any Credit Document without the written consent
of all of the Banks.
14.11. Participants. Each Bank shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Revolving Credit Commitments (and, if relevant, Swing Line Commitment)
held by such Bank at any time and from time to time to one or more other Persons
which constitute financial institutions, insurance companies or other commercial
lenders; provided that no such participation shall relieve any Bank of any of
its obligations under this Agreement, and, provided, further that no such
participant shall have any rights under this Agreement except as provided in
this Section 14.11, and the Agent shall have no obligation or responsibility to
such participant. Any agreement pursuant to which such participation is granted
shall provide that the granting Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower and Guarantors under
this Agreement and the other Credit Documents including, without limitation, the
right to approve any amendment, modification or waiver of any provision of the
Credit Documents, except that such agreement may provide that such Bank will not
agree to any modification, amendment or waiver of the Credit Documents that
would reduce the amount of or postpone any fixed date for payment of any
Obligation in which such participant has an interest. Any party to which such a
participation has been granted shall have the benefits of Section 3.6 and
Section 11.3 hereof; provided no participant shall be entitled to receive more
under such Sections than the Bank granting such participation would have
received had the participation not been granted. The Borrower and each Guarantor
authorizes each Bank to disclose to any participant or prospective participant
under this Section 14.11 or to any assignee or prospective assignee under
Section 14.12 hereof any financial or other information pertaining to the
Borrower or any Guarantor if such Bank has obtained the written agreement of
such participant, prospective participant, assignee or prospective assignee to
be bound by the provisions of Section 14.18 hereof.
14.12. Assignment Agreements. Each Bank may, from time to time
upon at least five (5) Business Days' notice to the Agent, assign to financial
institutions, insurance companies or other commercial lenders or a Federal
Reserve
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Bank part of its rights and obligations under this Agreement (including without
limitation the indebtedness evidenced by the Notes then owned by such assigning
Bank, together with an equivalent proportion of its obligation to make loans and
advances and participate in Letters of Credit hereunder) pursuant to an
Assignment Agreement executed by the parties thereto, which shall specify in
each instance the portion of the indebtedness evidenced by the Notes which is to
be assigned to each such assignee lender and the portion of the Revolving Credit
Commitment (and, if relevant, Swing Line Commitment) of the assigning Bank to be
assumed by it; provided, however, that (i) except with respect to the Swing
Loans (which must be assigned in whole), each such assignment shall be of a
constant, and not a varying, percentage of the assigning Bank's rights and
obligations under this Agreement and the assignment shall cover the same
percentage of such Bank's Revolving Credit Commitment, Loans, Notes and
interests in Letters of Credit; (ii) unless the Agent and the Borrower otherwise
consent, the aggregate amount of the Revolving Credit Commitment, Loans, Notes
and interests in the Letters of Credit of the assigning Bank being assigned to
such assignee lender pursuant to each such assignment (determined as of the
effective date of the relevant Assignment Agreement) shall in no event be less
than $5,000,000 and shall be an integral multiple of $1,000,000; (iii) the Agent
and (except for an assignment made during the continuance of any Event of
Default) the Borrower must each consent, which consent shall not be unreasonably
withheld, to each such assignment to a party which was not an original signatory
of this Agreement or an Affiliate of such a signatory, and (iv) the assignee
lender must pay to the Agent a processing and recordation fee of $3,500 and any
out-of-pocket attorney's fees incurred by the Agent in connection with such
Assignment Agreement. Upon the execution of each Assignment Agreement by the
assigning Bank thereunder, the assignee lender thereunder, the Borrower and the
Agent and payment to such assigning Bank by such assignee lender of the purchase
price for the portion of the indebtedness of the Borrower being acquired by it,
(i) such assignee lender shall thereupon become a "Bank" for all purposes of
this Agreement with Revolving Credit Commitment (and, if relevant, shall be
deemed to be Firstar for purposes of the Swing Loans) in the amounts set forth
in such Assignment Agreement and with all the rights, powers and obligations
afforded a Bank hereunder, (ii) such assigning Bank shall have no further
liability for funding the portion of its Revolving Credit Commitment (and, if
relevant, Swing Line Commitment) assumed by such other Bank and (iii) the
address for notices to such assignee Bank shall be as specified in the
Assignment Agreement executed by it. Concurrently with the execution and
delivery of such Assignment Agreement, the Borrower shall execute and deliver
new Notes to the assignee Bank in the amount of its Revolving Credit Commitment
(and, if relevant, Swing Line Commitment) and new Notes to the assigning Bank in
the amounts of its Revolving Credit Commitment after giving effect to the
reduction occasioned
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<PAGE> 85
by such assignment, such Notes to constitute "Notes" for all purposes of this
Agreement.
14.13. Amendments. Any provision of the Credit Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by (a) the Borrower, (b) the Required Banks, (c) if the rights or duties
of the Agent are affected thereby, the Agent; and (d) if the rights and duties
of the Issuing Bank are affected thereby, the Issuing Bank; provided that:
(i) no amendment or waiver pursuant to this Section
14.13 shall (A) increase any Revolving Credit Commitment or Swing Line
Commitment of any Bank without the consent of such Bank or (B) reduce the amount
of or postpone any fixed date for payment of any principal of or interest on any
Loan or Reimbursement Obligation or of any fee payable hereunder without the
consent of each Bank; and
(ii) no amendment or waiver pursuant to this Section
14.13 shall, unless signed by each Bank, change any provision of Section 8.1,
this Section 14.13, or the definition of Required Banks, or affect the number of
Banks required to take any action under the Credit Documents.
14.14. Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
14.15. Legal Fees, Other Costs and Indemnification. The Borrower
agrees to pay all reasonable costs and expenses of the Agent in connection with
the preparation, negotiation, associated due diligence review, administration
and syndication of the Credit Documents, including without limitation, the
reasonable fees and disbursements of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c., counsel to the Agent, in connection with the preparation and
execution of the Credit Documents, and any amendment waiver or consent related
hereto, whether or not the transactions contemplated herein are consummated.
Notwithstanding anything in the foregoing to the contrary, the Borrower shall
not be liable, without its consent, for more than $35,000 of the legal fees
(exclusive of disbursements and separately charged items) of Reinhart, Boerner,
Van Deuren, Norris & Rieselbach, s.c., counsel to the Agent, in connection with
the preparation, negotiation and execution of this Agreement and the other
Credit Documents delivered prior to the initial Credit Event. The Borrower
further agrees to indemnify each Bank, the Agent, and their respective
directors, officers and employees, against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor, whether or not the
indemnified Person is a party thereto) which any of
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<PAGE> 86
them may incur or reasonably pay arising out of or relating to any Credit
Document or any of the transactions contemplated thereby or the direct or
indirect application or proposed application of the proceeds of any Loan or
Letter of Credit, other than those which arise from the gross negligence or
willful misconduct of the party claiming indemnification; provided, however,
that notwithstanding the foregoing, the Borrower shall not be obligated to
indemnify any such Person for any loss, claim, damage, penalty, judgment,
liability or expense arising solely from (i) a dispute between two or more Banks
or (ii) a claim by any Bank against the Borrower, or by the Borrower against any
Bank, that is found in a final, nonappealable judgment by a court of competent
jurisdiction in favor of the Borrower (it being understood that this clause (ii)
shall affect or limit any amount the Borrower may owe to any Bank as a result of
any such claim under the first sentence of this Section 14.15). The Borrower,
upon demand by the Agent or a Bank at any time, shall reimburse the Agent or
Bank for any reasonable legal or other expenses incurred in connection with
investigating or defending against any of the foregoing except if the same is
directly due to the gross negligence or willful misconduct of the party to be
indemnified as determined by a final, nonappealable judgment of a court of
competant jurisdiction.
14.16. Set Off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Bank and each subsequent
holder of any Note is hereby authorized by the Borrower and each Guarantor at
any time or from time to time, without notice to the Borrower, to the Guarantors
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, Indebtedness evidenced by certificates of
deposit, whether matured or unmatured, but not including trust accounts, and in
whatever currency denominated) and any other Indebtedness at any time held or
owing by that Bank or that subsequent holder to or for the credit or the account
of the Borrower or any Guarantor, whether or not matured, against and on account
of the obligations and liabilities of the Borrower or any Guarantor to that Bank
or that subsequent holder under the Credit Documents, including, but not limited
to, all claims of any nature or description arising out of or connected with the
Credit Documents, irrespective of whether or not (a) that Bank or that
subsequent holder shall have made any demand hereunder or (b) the principal of
or the interest on the Loans or Notes and other amounts due hereunder shall have
become due and payable pursuant to Section 10 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
14.17. Currency. Each reference in this Agreement to U.S.
Dollars or to an Alternative Currency (the "relevant currency") is of the
essence. To the
79
<PAGE> 87
fullest extent permitted by law, the obligation of the Borrower and each
Guarantor in respect of any amount due in the relevant currency under this
Agreement shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency that the Person entitled to receive such payment
may, in accordance with normal banking procedures, purchase with the sum paid in
such other currency (after any premium and costs of exchange) on the Business
Day immediately following the day on which such Person receives such payment. If
the amount of the relevant currency so purchased is less than the sum originally
due to such Person in the relevant currency, the Borrower or relevant Guarantor
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify such Person against such loss, and if the amount of the specified
currency so purchased exceeds the sum of (a) the amount originally due to the
relevant Person in the specified currency plus (b) any amounts shared with other
Banks as a result of allocations of such excess as a disproportionate payment to
such Person under Section 14.7 hereof, such Person agrees to remit such excess
to the Borrower.
14.18. Confidentiality. Neither the Agent nor any Bank shall
disclose any Confidential Information to any Person without the prior written
consent of the Borrower other than (a) to the Agent's or such Bank's Affiliates
and their officers, directors, employees, agent and advisors, (b) to actual or
prospective assignees and participants and then only on a confidential basis,
(c) as required by any law, rule or regulation or judicial or legal process,
provided that solely with respect to this clause (c) the Agent or such Bank
shall notify the Borrower of the requirement or request that it disclose any
such Confidential Information prior to doing so unless such notification is
prohibited by any applicable law or judicial or legal process, (d) to the Agent
and/or other Banks and (e) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking.
14.19. Entire Agreement. The Credit Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior or contemporaneous agreements, whether written or oral,
with respect thereto are superseded thereby.
14.20. Governing Law. This Agreement and the other Credit
Documents, and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of Wisconsin.
14.21. Submission to Jurisdiction: Waiver of Jury Trial. The
Borrower, each Guarantor, the Agent and each Bank hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Eastern
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<PAGE> 88
District of Wisconsin and of any Wisconsin State court sitting in the City of
Milwaukee for purposes of all legal proceedings arising out of or relating to
this Agreement, the other Credit Documents or the transactions contemplated
hereby or thereby. The Borrower, each Guarantor, the Agent and each Bank
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. THE BORROWER, EACH GUARANTOR,
THE AGENT AND EACH BANK HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED THEREBY.
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<PAGE> 89
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of September 9, 1999.
CLARCOR INC.
BY
---------------------------------------
Its
------------------------------------
Accepted and Agreed to by each of the undersigned as a Guarantor.
CLARCOR CONSUMER PRODUCTS, INC.
BY
---------------------------------------
Its
------------------------------------
J.L. CLARK, INC.
BY
---------------------------------------
Its
------------------------------------
CLARCOR FILTRATION PRODUCTS, INC.
BY
---------------------------------------
Its
------------------------------------
AIRGUARD INDUSTRIES, INC.
BY
---------------------------------------
Its
------------------------------------
BALDWIN FILTERS, INC.
BY
---------------------------------------
Its
------------------------------------
HASTINGS FILTERS, INC.
BY
---------------------------------------
Its
------------------------------------
Signature Page to Multicurrency Credit Agreement dated as of September 9, 1999
among CLARCOR Inc., the Banks party thereto, Firstar Bank Milwaukee, National
Association, as Agent, and Bank One, Illinois, N.A. and Amcore Bank, N.A., as
Co-Agents.
<PAGE> 90
CLARK FILTER, INC.
BY
---------------------------------------
Its
------------------------------------
UNITED AIR SPECIALISTS, INC.
BY
---------------------------------------
Its
------------------------------------
Signature Page to Multicurrency Credit Agreement dated as of September 9, 1999
among CLARCOR Inc., the Banks party thereto, Firstar Bank Milwaukee, National
Association, as Agent, and Bank One, Illinois, N.A. and Amcore Bank, N.A., as
Co-Agents.
<PAGE> 91
Accepted and Agreed to as of the day and year last above written.
Address and Amount of Commitments:
Address: FIRSTAR BANK MILWAUKEE,
NATIONAL ASSOCIATION, in its
777 East Wisconsin Avenue individual capacity as a Bank
Milwaukee, Wisconsin 53202 and as Agent
Attn: John R. Falb
BY
------------------------------
Telecopy: (414)765-4632 It
Telephone: (414)765-6041 ---------------------------
Revolving Credit Commitment
And Percentage: $40,000,000 21.6216217%
Swing Line Commitment: $5,000,000
Lending Offices:
Domestic Rate Loans:
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn.: John R. Falb
Eurocurrency Loans:
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn.: John R. Falb
Signature Page to Multicurrency Credit Agreement dated as of September 9, 1999
among CLARCOR Inc., the Banks party thereto, Firstar Bank Milwaukee, National
Association, as Agent, and Bank One, Illinois, N.A. and Amcore Bank, N.A., as
Co-Agents.
<PAGE> 92
Address: BANK ONE, ILLINOIS, NA, in its
individual capacity as a Bank and as a
6000 East State Street Co-Agent
Rockford, Illinois 61108
Attn: Robert J. Louvar BY
--------------------------------
Its
----------------------------
Telecopy: (815) 394-1889
Telephone: (815) 394-4667
Revolving Credit Commitment
And Percentage: $40,000,000 21.6216217%
Lending Offices:
Domestic Rate Loans:
6000 East State Street
Rockford, IL 61108
Attn: Robert J. Louvar
Eurocurrency Loans:
Address: AMCORE BANK N.A., in its
individual capacity as a Bank and as a
501 Seventh Street Co-Agent
Rockford, IL 61110
Attn: Jon E. Schmidt
BY
------------------------------
Telecopy: (815) 961-7733 It
Telephone: (815) 961-2777 ----------------------------
Revolving Credit Commitment
And Percentage: $15,000,000 8.1081081%
Lending Offices:
Domestic Rate Loans:
Signature Page to Multicurrency Credit Agreement dated as of September 9, 1999
among CLARCOR Inc., the Banks party thereto, Firstar Bank Milwaukee, National
Association, as Agent, and Bank One, Illinois, N.A. and Amcore Bank, N.A., as
Co-Agents.
<PAGE> 93
501 Seventh Street
Rockford, IL 61110
Attn:
-------------
Eurocurrency Loans:
Address: THE NORTHERN TRUST COMPANY
50 South LaSalle Street
Chicago, Illinois 60675 BY
Attn: Ronald Mallicoat -------------------------------
Its
Telecopy: (312) 444-7028 --------------------------
Telephone (312) 444-3428
Revolving Credit Commitment
And Percentage: $25,000,000 13.5135135%
Lending Offices:
Domestic Rate Loans:
50 South LaSalle Street
Chicago, Illinois 60675
Attn:
Eurocurrency Loans:
50 South LaSalle Street
Chicago, Illinois 60675
Attn:
Address: U.S. BANK NATIONAL
ASSOCIATION
201 West Wisconsin Avenue
Milwaukee, Wisconsin 53259 BY
Attn: Alan Holman -----------------------------
Its
Telecopy: (414) 227-5881 --------------------------
Signature Page to Multicurrency Credit Agreement dated as of September 9, 1999
among CLARCOR Inc., the Banks party thereto, Firstar Bank Milwaukee, National
Association, as Agent, and Bank One, Illinois, N.A. and Amcore Bank, N.A., as
Co-Agents.
<PAGE> 94
Telephone: (414) 227-5505
Revolving Credit Commitment
And Percentage: $25,000,000 13.5135135%
Lending Offices:
Domestic Rate Loans:
201 West Wisconsin Avenue
Milwaukee, Wisconsin 53259
Attn:
Eurocurrency Loans:
Attn:
Address: SUNTRUST BANK
303 Peachtree Street, N.E.
Third Floor BY
Atlanta, Georgia 30308 -----------------------------
Attn: Charles C. Pick Its
--------------------------
Telecopy: (404) 658-4905
Telephone: (404) 588-7915
Revolving Credit Commitment
And Percentage: $20,000,000 10.8108108%
Lending Offices:
Domestic Rate Loans:
303 Peachtree Street, N.E.
Third Floor
Atlanta, Georgia 30308
Signature Page to Multicurrency Credit Agreement dated as of September 9, 1999
among CLARCOR Inc., the Banks party thereto, Firstar Bank Milwaukee, National
Association, as Agent, and Bank One, Illinois, N.A. and Amcore Bank, N.A., as
Co-Agents.
<PAGE> 95
Attn:
Eurocurrency Loans:
Attn:
Address: ASSOCIATED BANK, ILLINOIS, N.A.
612 North Main Street
Rockford, Illinois 61103 BY
Attn: William Zibbell ------------------------------
Its
--------------------------
Telecopy: (815) 987-3520
Telephone: (815) 987-3534
Revolving Credit Commitment
And Percentage: $20,000,000 10.8108108%
Lending Offices:
Domestic Rate Loans:
612 North Main Street
Rockford, Illinois 61103
Attn: William Zibbell
Eurocurrency Loans:
612 North Main Street
Rockford, Illinois 61103
Attn: William Zibbell
Signature Page to Multicurrency Credit Agreement dated as of September 9, 1999
among CLARCOR Inc., the Banks party thereto, Firstar Bank Milwaukee, National
Association, as Agent, and Bank One, Illinois, N.A. and Amcore Bank, N.A., as
Co-Agents.
<PAGE> 1
EXHIBIT 99
FOR FURTHER INFORMATION CONTACT:
Lawrence E. Gloyd
Chairman of the Board and Chief Executive Officer
Rockford, Illinois
815-962-8867
FOR IMMEDIATE RELEASE
MONDAY, SEPTEMBER 13, 1999
CLARCOR TO ACQUIRE THREE FILTRATION COMPANIES
ACQUISITIONS WILL INCREASE REVENUES BY 35%
ROCKFORD, IL, SEPTEMBER 13, 1999 - CLARCOR INC. (NYSE: CLC) today announced that
it has signed a definitive agreement to acquire, effective September 1, 1999,
three filtration businesses from Mark IV Industries. The companies are:
PUROLATOR PRODUCTS AIR FILTRATION COMPANY, FACET INTERNATIONAL and
PUROLATOR-FACET FILTER PRODUCTS.
The purchase price for the three companies is approximately $136 million. No
debt was assumed. The transaction is structured primarily as an acquisition of
assets and will provide CLARCOR with deductible goodwill having a net present
value tax benefit to CLARCOR of more than $11 million. In the most recently
completed fiscal year for the three companies, sales totaled $150 million and
will increase CLARCOR's sales by approximately 35%. For the year ended November
30, 1998, CLARCOR had net sales of $427 million.
"This is a significant opportunity for CLARCOR. By acquiring three quality
businesses, it will increase our total sales by approximately 35% in the first
year," said Larry Gloyd, CLARCOR's Chairman and CEO. "These are good businesses
with solid margins, and although we expect the acquisitions to be $0.01-$0.02
dilutive to diluted earnings per share in fiscal 2000, they should be accretive
thereafter. Looking ahead, we see the potential for further improvement in sales
and margins, plus attractive returns on invested capital."
Gloyd emphasized, "These acquisitions fit well with our strategy to provide our
customers with their complete filter requirements, including supply,
installation and service, for all types of manufacturing plants, distribution
centers, retail stores, office facilities and engine applications. These
companies will add new types of filtration products and systems to our product
lines with recognized brand names and give us access to new markets and
customers, particularly in the aviation and fluid processing industries. They
will also increase our manufacturing leverage, which will enable us to reduce
costs and improve margins. In conclusion, this acquisition will significantly
strengthen CLARCOR and our presence in the filtration marketplace."
Purolator Products Air Filtration Company (PPAFC) is a manufacturer of a wide
range of air filters used in heating, ventilation and air conditioning systems.
PPAFC is based in Henderson, North Carolina, with two manufacturing sites in
North Carolina, one in Iowa and one in California. PPAFC will add to CLARCOR's
Industrial/Environmental air filtration manufacturing capabilities and provide
opportunities for improved operating efficiencies.
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<PAGE> 2
CLARCOR Inc.
Add 1
Facet International (Facet) is a manufacturer of industrial process filters and
filtration systems used in aviation refueling and general industry. Facet is
based in Torino, Italy, with manufacturing plants and sales offices in Italy,
Spain, Wales, France, Holland, Germany and the United States. CLARCOR believes
Facet offers opportunities to improve sales and margins through further market
development and a focus on higher margin industrial process filters.
Purolator-Facet Filter Products is a manufacturer of specialty filtration
products for aerospace, fluid processing and hydraulic systems. It is based in
Greensboro, North Carolina. A high-end filter manufacturer, this company will
bring new manufacturing processes to CLARCOR and an entry into certain niche
filtration markets, such as sand control filters used in the oil drilling
industry and sintered metal filters for aerospace applications.
CLARCOR is based in Rockford, Illinois, and is a diversified marketer and
manufacturer of mobile and environmental filtration products and consumer and
industrial packaging products sold in domestic and international markets. In its
fiscal year ended November 30, 1998, CLARCOR had sales of $427 million with net
earnings of $32 million or $1.30 per diluted share. Common shares of the Company
are traded on the New York Stock Exchange under the symbol CLC.
The statements in this release concerning CLARCOR and its acquisition of PPAFC,
Facet and Purolator-Facet Filter Products are forward-looking statements that
involve risk and uncertainties, including changes in product demand, price and
product competition, raw material costs, distribution channels, the
effectiveness of plant conversions, productivity improvement programs, our
ability to manage continual growth, the cost and performance of the
acquisitions, general economic conditions, both domestic and foreign, and other
factors discussed in filings made with the Securities and Exchange Commission.
